Article on the discovery process in litigation in the Economist

November 15, 2012 |

Proper discovery is vital in most commercial litigation. It is also one of the most contentious areas in the interlocutory process.  The breadth of discovery is often a matter of significant dispute in big cases.  It can be used as a weapon on occasion, driving up costs and wasting time. A fascinating article in the Economist, Legal language, highlights the complexity generally but the complications that come when discovery has to deal with different cultural and legal norms not to mention translation issues.

It provides:

IN A high-heeled argument last year, Christian Louboutin, a shoemaker, sued Yves Saint-Laurent, a fashion house. Louboutin was irked that YSL made footwear that had a red sole, a distinctive feature of Louboutin shoes. The case was tried in America, but both companies are French. This presented a few problems.

Louboutin’s lawyer, Harley Lewin, describes four layers of difficulty in international litigation when in comes to “discovery”—the right to demand documents relevant to the case from the other party. The first, and most obvious, is language. The second is culture: how frank people are in e-mails varies widely from country to country. The third is local law. France, with little tradition of discovery, has strict privacy laws. These can, for example, prevent low-level employees’ names from appearing in documents in discovery. Finally, there is the sheer volume: electronic communication has made discovery a huge undertaking. Mr Lewin says the vast majority of those e-mails say nothing more than “yup”, “OK” and “sure” (in whatever language), but lawyers have to go through them all anyway.

American courts give litigants an expansive right to discovery. It is a process so long and expensive that it is commonly used to impoverish and exhaust legal opponents into settling cases. Many lawyers abuse it. And the cost and complexity are magnified in international cases, such as a recent patent-infringement trial in America involving Apple and South Korea’s Samsung, where language and culture have to be taken into account.

It is too much for one lawyer, or even a small firm. So specialists are filling the void. Mr Lewin hired TransPerfect, a language-services firm. It helped to arrange a “silo” system for protecting certain communications, to meet France’s privacy laws while obeying the American court’s discovery orders. TransPerfect also translated huge numbers of documents from French, Italian and Spanish. These documents, Mr Lewin said, were critical for Louboutin’s partial court victory over YSL: red soles could constitute a protectable trademark, but an all-red shoe with a red sole would not.

Common Sense Advisory, a research firm, estimates that the worldwide language-services business is worth $34 billion and it is growing fast, at about 12% a year. No firm is big enough to dominate and most are privately held. The biggest, Mission Essential Personnel, boasted revenues of $725m in 2011; TransPerfect raked in $300m. Fees from legal work can be juicy.

TransPerfect worked for both sides in the case involving Apple and Samsung. When Panasonic, a struggling Japanese electronics-maker, bought Sanyo, another one, in 2009, America’s antitrust authorities required so much documentation before approving the merger that TransPerfect hauled in $25m in fees for translating around 100m words.

Specialised “e-discovery” software helps lawyers cull the masses of electronic data. But in international deals and lawsuits, such software must be run by cultural and linguistic experts to make sure the correct search terms are used and the right information is ferreted out. Translation is still something that computers do badly much of the time, especially when the topic (a drug patent, say) is a difficult one full of technical details.

The many law students wondering if the rotten legal job market will ever improve should take note. The twin forces of globalisation and technology may put many mediocre lawyers out of business. But those who master languages and computers may find themselves in demand.


Leave a Reply