How to Handle a Legal Dispute

Practical Steps When a Dispute or Incident Occurs

Inform the Legal Department and Your Manager Immediately

Inform the legal department and your manager even if you do not think the incident (including threats to breach an agreement, bring a lawsuit, or file a report with a regulator) is a major one. When in doubt, raise the issue. Always promptly notify the legal department (or your outside counsel) if you receive a formal document (whether legal or not) or a document that requires a response within a specified time. Try not to leave anything for the last minute, especially if there are time limits within which you must react. A rushed application or response will do you no favors.

Do Not Communicate with Opposing Parties Without a Lawyer Present or a Full Briefing

Do not have discussions with the adversary before first speaking with the legal department or company attorney, even if you think what you have to say will deter a lawsuit. Do not engage in any communications with any lawyers representing the opposition without a member of the legal department or company attorney present. Talk to the legal department before putting anything in writing. You do not want to say something that may be used against you or the company later.

Do Not Admit Anything or Agree to Settle Without Legal Advice

If you are forced into a discussion about a dispute without first having the opportunity to consult the company’s legal department or company attorney, do not admit anything, agree to settle, or apologize, and be certain to inform the legal department immediately after any conversations with the other side.

Limit Internal and External Discussions to Those with a Real Need to Know

Check with the company’s legal department before talking to other employees or individuals outside of the company (for example, vendors, clients, suppliers, distributors, family, and friends) about a potential or active lawsuit.

Do not communicate about the dispute in writing (including emails, instant messages, and text messages) with other employees or individuals outside the company, including family and friends. Ensure that anyone in the company who has day-to-day contact with the other party is aware of the dispute and does not discuss it with the other party.

And, do not mention the lawsuit on social media, including Facebook, LinkedIn, Twitter, or blogs.

Do Not Talk to the Press or any External Party Without Legal Advice and Relevant Internal Approval

If you have a media relations department, brief them early so they can manage any publicity. If you receive any media inquiries directly, refer them to the media relations department.

Do not send documents relevant to the case to external parties or ask them to send any to you without first getting approval from the legal department. If you are approached by law enforcement, only say that the company is represented by counsel and that you were advised to refer all questions to the legal department.

How to Handle Documents

Do Not Destroy, Delete, or Amend

Do not destroy, delete, or amend any documents or any media on which information relevant to the case is recorded. For example, emails, notes of conversations, notebooks, diaries, tapes, photographs, computer records, and designs, and even annotations or comments on documents, must not be destroyed.

Suspend any routine document destruction process the company may have in place for which you control and do not rearrange your files. Ensure that, if there is a potential or active dispute, everyone who has access to information that may be relevant to the case is immediately notified not to destroy or alter it, and have them notify the legal department before creating new documents that may be relevant to the dispute. If you are unsure about what documents and other information may be relevant to a particular dispute, check with the company’s legal department or attorney.

For employees with relevant information that leave the company while the dispute is pending, before their departure, ensure that all of their documents have been properly preserved and that any information that the individual has outside of company property (for example, documents in their home files or saved electronically on their personal computer or mobile device) is returned to the company. Also make sure that you have their contact information and anticipate that they may be contacted.

Take Great Care when Preparing a Report on the Incident

Documents and electronic files that you create or modify, or information you gather after you are on notice of the dispute, are also subject to disclosure to adverse parties in a case. Because you may have to show this information to the other side or the investigating body as part of legal proceedings, regardless of whether it is embarrassing, damaging, or confidential (although you may be able to protect confidentiality to some extent), take great care in what you write. Before creating a new document about the dispute:

• Talk to the legal department.
• Consider whether preparing a written document is appropriate and warranted.
• Beware of emails; like letters, they are documents.
• Think about what you are writing and how it may sound if it was read out loud in court.
• Never speculate, offer opinions, or make critical comments; stick to the facts.
• Only send the document to those who must see it.
• Do not create, edit, or send the document on a personal computer or using a personal email address.

The company may have to implement improvements or changes in practices following an incident which implicitly show that a previous practice was flawed. Talk to the legal department about the best way to do this without prejudicing the company’s litigation position.

Correspondence Protected from Disclosure

Communications between the company and its lawyers (both in-house and external counsel) may be legally withheld from the other side or a regulatory body if they are covered by the attorney-client privilege, work product doctrine, or some other recognized privilege or protection.

Do not assume something is privileged or confidential. Call the legal department before communicating with counsel or other company employees because some communications are not protected. Only mark documents “privileged” or “confidential” on the advice of the legal department. Marking a document privileged or confidential or copying it to a lawyer does not in itself make it privileged or confidential.

Privilege and confidentiality can be lost if the privileged or confidential information is revealed to anyone outside of counsel and client. Only circulate information on a real need-to-know basis and never copy externally (including sending a copy to a personal email account or saving it on a personal computer) without legal advice.

Your Role in Legal Proceedings

Helping the Case

Evidence: If asked by the legal department, you can help gather evidence by:

(1) Locating and preserving all relevant materials (for example, contracts and emails), whether favorable or not, as soon as possible;

(2) Making a list of all individuals (current and former employees and third parties) that may have relevant documents;

(3) Contacting all current employees about preserving their documents; and

(4) Discussing with the legal department how to contact former employees.

Witnesses: You can help identify favorable and unfavorable potential witnesses by:

(1) Advising the legal department of anyone (including current and former employees and non-employees) who may be relevant to the case and therefore may have to testify at a deposition or at trial;

(2) Telling the legal department immediately if you know of any reason why any potential witnesses may not be able or willing to give a statement (for example, their employment may have been terminated or they have become ill).

Do not reach out to potential witnesses without authorization from the legal department or a member of the legal department present.

Consider other parties: Tell the legal department if there is any other party who may be liable or should be involved in the case (for example, if the disputed work was handled by a subcontractor).

Opposing Party’s assets: Tell the legal department immediately if you think that the other side may try to get rid of its assets so it cannot pay up if the company wins. The company may be able to get a court order to stop them.

Press coverage: Avoid reading any press coverage about the dispute and encourage others to do the same. It may impact your recollection of the relevant facts.

Be aware: Ask the legal department regularly how the case is going.

Insurance Coverage

The legal department is responsible for checking the company’s insurance policy to see if the claims that form the basis of the lawsuit might be covered by the policy. If the claims are covered by the company’s insurance policy, the legal department must notify the company’s insurers immediately and follow their claims procedure. Otherwise, the insurer may decline coverage.

It is important to report any potential claim immediately so that the insurer does not deny coverage, and to fully cooperate with the legal department and the insurer.

If the claims are covered by the company’s insurance policy, the company may need to seek the insurance company’s consent before taking any action.

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