Multi-jurisdictions challenge in-house teams

Companies operating in multiple jurisdictions face a multitude of legal challenges, which in-house counsel teams both in Canada and abroad must be able to address properly, say general counsel who attended an international conference in Toronto last week.

A global economy has made litigation in another jurisdiction, either directly or through a foreign subsidiary, more likely. But it is a challenge that can be met by finding the right local partners, say speakers at the Corporate Counsel World Summit, organized last week by the Canadian Corporate Counsel Association. But operating outside North America and western Europe might make things even more difficult.

One problem is general counsel often find themselves stepping into a jurisdiction in which they have no experience and no local contacts. Calling a large international accounting firm can be a quick and easy way to get in touch with the right local counsel, says Stéphanie Couture, the legal department director at Tarkett S.A., a multinational based in France.

“It all depends whether you already have counsel who happens to be in the area of litigation that you are addressing,” she says.

In-house counsel also need to interview several local lawyers if they feel it is necessary, because choosing the right people is key in international litigation, says Ildiko Mehes, general counsel at Teva Canada Ltd.

“My guiding principle is picking the best [local] counsel there is,” says Mehes.

However, calculating spending can be a challenge too, she adds. “We have jurisdictions in Europe and South America that have cost regimes that are really foreign to a North American lawyer.”

There also needs to be careful evaluation of the local firms chosen to represent a company overseas when it comes to applicable professional standards, says Frank S. Ryan, general counsel and secretary of Nexans USA Inc.

“The professional standards of lawyers are not the same everywhere,” says Ryan. “The idea of conflicts is not the same we would consider under our professional ethics. And sometimes a firm will have a conflict, and it doesn’t give the best advice, so we have to be careful with that. That’s what I advise people.”

Another big challenge is deciding whether to go through the country’s court system or set arbitration clauses when coming up with new contracts.

“When you are dealing with international business, particularly when you go outside North America and western Europe, you have to strongly consider an arbitration clause,” says Wolf von Kumberg, European legal director and assistant general counsel at Northrop Grumman Corp.

He says the problem companies face in many countries is the fear that corruption and political interference might taint the judicial process.

John Tobia, vice president and general counsel at Aastra Technologies Ltd., says the biggest issue in many countries outside North America and western Europe is a lack of predictability of the how the rules will be applied.

“Ability to enforce the judgments may be worthless . . . and you have to evaluate the risks,” he says. “If you don’t know the answers, you better find someone who knows the answers.”