Litigation Strategy for In-House Counsel - Stewart McKelvey

Determining whether to hire externalcounsel to conduct the litigation• nature of the case• complexity of the issue(s)• workload/capacity of in-house departmentHIRING EXTERNALCOUNSEL• external counsel may provide enhanced objectivity at allstages of the litigation32013 NB IN-HOUSE COUNSELPROFESSIONAL DEVELOPMENT DAY© 2013 Stewart McKelvey all rights reserved

RELATIONSHIP WITHEXTERNAL COUNSELSetting up the relationship with external counsel• reporting requirements• communication protocols• coordination of in-house and external resources• budgeting• scheduling42013 NB IN-HOUSE COUNSELPROFESSIONAL DEVELOPMENT DAY© 2013 Stewart McKelvey all rights reserved

RELATIONSHIP WITHEXTERNAL COUNSELReporting Requirements• Consider the frequency, form and level of detail of thereporting you will require from external counsel.• The frequency and level of detail of reporting will alsoaffect the litigation budget.52013 NB IN-HOUSE COUNSELPROFESSIONAL DEVELOPMENT DAY© 2013 Stewart McKelvey all rights reserved

RELATIONSHIP WITHEXTERNAL COUNSELCommunication Protocols• Contact between external counsel and businessemployees – will in-house counsel be the conduit, or willthere be direct communication between external counseland employees involved in the litigation?• Public communications.62013 NB IN-HOUSE COUNSELPROFESSIONAL DEVELOPMENT DAY© 2013 Stewart McKelvey all rights reserved

RELATIONSHIP WITHEXTERNAL COUNSELCoordination of Resources• junior counsel• paralegals/staff• printing• technical resources• E-Discovery resources72013 NB IN-HOUSE COUNSELPROFESSIONAL DEVELOPMENT DAY© 2013 Stewart McKelvey all rights reserved

BUDGETING ANDSCHEDULINGBudgeting• Litigation is notoriously unpredictable and difficult toaccurately budget.• In-house and external counsel should work together todevelop the budget.• Cannot control the other parties involved in the action,yet their activities can have a significant impact on thebudget.82013 NB IN-HOUSE COUNSELPROFESSIONAL DEVELOPMENT DAY© 2013 Stewart McKelvey all rights reserved

BUDGETING ANDSCHEDULINGBudgeting• Consider the amount of documentation involved, e-discovery requirements, etc.• May want to build a contingency into the budget to tryand avoid surprises on the bottom line.• In-house counsel also may need to consider the “soft”costs of key employee time away from work to preparefor discovery, mediation, trial, etc.92013 NB IN-HOUSE COUNSELPROFESSIONAL DEVELOPMENT DAY© 2013 Stewart McKelvey all rights reserved

BUDGETING ANDSCHEDULINGScheduling• Like the budget, the timing of various steps in thelitigation can be difficult to predict and/or control.• It will depend greatly on the nature and complexity of thecase, the number of parties, and the amount ofdocumentation involved.102013 NB IN-HOUSE COUNSELPROFESSIONAL DEVELOPMENT DAY© 2013 Stewart McKelvey all rights reserved

STAGES OF LITIGATIONStages of the Litigation Process• theory of the case• initial opinion• records management/identification of key witnesses• pleadings• discovery (e-discovery)• mediation/arbitration• trial112013 NB IN-HOUSE COUNSELPROFESSIONAL DEVELOPMENT DAY© 2013 Stewart McKelvey all rights reserved

THEORY OF THE CASE/INITIAL OPINIONImportance of the Theory of the Case andInitial Opinion• It is important that in-house and external counsel worktogether to develop a theory of the case from the outset.• It is also critical to obtain an initial informed opinion onliability and damages from external counsel at an earlystage including an objective assessment of keywitnesses.122013 NB IN-HOUSE COUNSELPROFESSIONAL DEVELOPMENT DAY© 2013 Stewart McKelvey all rights reserved

THEORY OF THE CASE/INITIAL OPINIONImportance of the Theory of the Case andInitial Opinion• Part of the reporting to in-house counsel will include anassessment of when the theory of the case may have tochange as the litigation proceeds.• Also will want to retain any technical experts early on, asthey can significantly impact the liability assessment.132013 NB IN-HOUSE COUNSELPROFESSIONAL DEVELOPMENT DAY© 2013 Stewart McKelvey all rights reserved

KEY WITNESSESIdentification of Key Witnesses• It will be important to identify the key business personnelwho will play a part in the litigation – i.e., who are the keywitnesses and document custodians whoseelectronically stored information must be preserved.• These key witnesses should be interviewed by externalcounsel as soon as possible.• The litigation may play out over a number of years andyou do not want to lose access to these individuals.142013 NB IN-HOUSE COUNSELPROFESSIONAL DEVELOPMENT DAY© 2013 Stewart McKelvey all rights reserved

RECORDSMANAGEMENTRecords Management• Electronically stored information (email, attachments,outlook calendars, etc.) has become a huge componentof the documentary disclosure process.• A “Litigation Hold” is a notice sent to employees advisingthem of their obligation to preserve any potentiallyrelevant electronically stored information in their control,even if this preservation would be in violation of thecompany’s normal data retention policy…152013 NB IN-HOUSE COUNSELPROFESSIONAL DEVELOPMENT DAY© 2013 Stewart McKelvey all rights reserved

E-DISCOVERYE-Discovery• In litigation, there is no such thing as confidentiality –only privilege.• It should be made clear to all employees that email is forbusiness use only. Write every email as if either a judgeor your CEO will someday read it.• Email is almost never truly gone – multiple copies,backups, etc.162013 NB IN-HOUSE COUNSELPROFESSIONAL DEVELOPMENT DAY© 2013 Stewart McKelvey all rights reserved

E-DISCOVERYRealities of E-Discovery• Key variables in large-scale cases:• The litigation strategy and pace of the parties.• The level of cooperation of the other side.• The volume of data to be disclosed by the parties.172013 NB IN-HOUSE COUNSELPROFESSIONAL DEVELOPMENT DAY© 2013 Stewart McKelvey all rights reserved

THE SEDONAPRINCIPLESThe Sedona PrinciplesDefensibilityRelevanceAgreement182013 NB IN-HOUSE COUNSELPROFESSIONAL DEVELOPMENT DAY© 2013 Stewart McKelvey all rights reserved

THE SEDONAPRINCIPLESThe Sedona Principles:• 12 general principles to guide the e-discovery process.• The underlying themes are relevance, defensibility andagreement:• Only relevant document are discoverable.• The procedures and processes used must bedefensible.• Agreement between the parties as to processes andprocedures is encouraged wherever possible.192013 NB IN-HOUSE COUNSELPROFESSIONAL DEVELOPMENT DAY© 2013 Stewart McKelvey all rights reserved

E-DISCOVERYTechnical Aspects of E-Discovery• 1 GB of data = approx. 10,000 mixed e-documents.• 1 GB = approx. 65 hours review time.• 5 GB is considered a “small” e-discovery project.• 50 GB is considered a “moderate” e-discovery project.• 100 GB is considered a “large” e-discovery project.• Third party service providers (IT, Project Management)are often used in moderate to large e-discovery projectsas it is simply more cost-effective.202013 NB IN-HOUSE COUNSELPROFESSIONAL DEVELOPMENT DAY© 2013 Stewart McKelvey all rights reserved

E-DISCOVERYTechnical Aspects of E-Discovery• An “eyes-on” review of every single document maysimply not be possible when dealing with tens orhundreds of thousands of documents.• Keyword searching has been shown to be only 20 percent effective. (see Paul, George L. and J. R. Baron, “Information Inflation: Canthe Legal System Adapt?” (2007) 13 Richmond Journal of Law and Technology 10 atpages 22-24)• Most effective method now seems to be predictivecoding – essentially a lawyer driven, computer assistedreview.212013 NB IN-HOUSE COUNSELPROFESSIONAL DEVELOPMENT DAY© 2013 Stewart McKelvey all rights reserved

SPOILIATIONArthur Andersen – a cautionary tale…• AA was an accounting firm that had done work for Enron;there was evidence of accounting irregularities.• AA became aware of the potential investigation intoEnron but issued no “hold” on documents in itspossession relating to work done for Enron. Instead, AAmanagement “reminded” employees of the existingdocument retention policy and a number of relevantdocuments were destroyed.• Led to the company’s criminal conviction for obstructionof justice!222013 NB IN-HOUSE COUNSELPROFESSIONAL DEVELOPMENT DAY© 2013 Stewart McKelvey all rights reserved

SPOILIATIONSpoiliation – no joking matter!232013 NB IN-HOUSE COUNSELPROFESSIONAL DEVELOPMENT DAY© 2013 Stewart McKelvey all rights reserved

ALTERNATIVE DISPUTERESOLUTIONAlternative Dispute Resolution• Mediation vs. Arbitration vs. Settlement Conference• When is the best time to attempt alternative disputeresolution?242013 NB IN-HOUSE COUNSELPROFESSIONAL DEVELOPMENT DAY© 2013 Stewart McKelvey all rights reserved

QUESTIONS252013 NB IN-HOUSE COUNSELPROFESSIONAL DEVELOPMENT DAY© 2013 Stewart McKelvey all rights reserved

These materials are intended to provide brief informationalsummaries only of legal developments and topics of generalinterest. The materials should not be relied upon as asubstitute for consultation with a lawyer with respect to thereader’s specific circumstances. Each legal or regulatorysituation is different and requires review of the relevant factsand applicable law. If you have specific questions related tothese materials or their application to you, you areencouraged to consult a member of our firm to discuss yourneeds for specific legal advice relating to the particularcircumstances of your situation. Due to the rapidly changingnature of the law, Stewart McKelvey is not responsible forinforming you of future legal developments.262013 NB IN-HOUSE COUNSELPROFESSIONAL DEVELOPMENT DAY© 2013 Stewart McKelvey all rights reserved

Kenneth McCullogh, Q.C.Your top gunA veteran trial lawyer, Ken has established a reputation as one of New Brunswick’s leadinglawyers. In recent years, his efforts have been focused on major commercial litigation/arbitration matters concerning complex factual and legal issues regarding:• Contract law• Tort law• Corporate law• Intellectual property• Environmental law• Insurance lawRepresentative mattersAs a leading lawyer with more than 35 years of experience, Ken is sought out for assistanceon multiple fronts, including:• Acting on behalf of engineering/construction clients in matters concerning professionalnegligence, extras, delay and impact claims, faulty design and unanticipated soilsconditions.• Preparation and prosecution of major CAR, DSU and ALOP insurance claims.• Insurance coverage disputes.• Serving as a mediator in commercial disputes arising out of construction, business andshareholder disputes.• Acting as an advisor to many national and international firms on matters concerningprofessional liability, insurance, commercial contracts, directors’ and officers’ liability,intellectual property, taxation, environmental law and corporate trust.Contact informationSuite 1000, Brunswick House44 Chipman HillSaint John, NB, CanadaE2L 2A9Direct Dial: 506.632.2781Direct Cell: 506.639.1785Email: kmccullogh@stewartmckelvey.com

Areas of practiceCommercial and Corporate LitigationInsuranceConstructionMarineEducationUniversity of New Brunswick, LL.B., 1975Saint Thomas University, B.A., 1972Bar admission(s)New Brunswick, 1975Queen’s Counsel1995LanguagesEnglishRatingsGuide to the Leading US/Canada Cross-Border Litigation Lawyers in Canada, 2012Best Lawyers’ 2013 Saint John Construction Law Lawyer of the YearBest Lawyers: Construction Law, 2006, 2008-2013Best Lawyers: Corporate and Commercial Litigation, 2006, 2008-2013Best Lawyers: Insurance Law, 2006, 2008-2013Benchmark Canada, local litigation star (General Commercial, Insurance and Environmental),2013Lexpert (Construction Law)Lexpert (Directors and Officers Liability)Lexpert (Litigation - Commercial Insurance)Lexpert (Litigation - Litigation - Corporate Commercial)Law society membershipsLaw Society of New BrunswickSaint John Law Society

Activities• Member, Canadian Bar Association• Fellow, Canadian College of Construction Lawyers• Fellow, American College of Trial Lawyers• Secretary Treasurer, American College of Trial Lawyers Canadian Foundation,2010-present

Stephen Hutchison“The surest way not to fail is to determine to succeed.” – Richard Brinsley SheridanDiligent and tenaciousWith over 25 years experience as a civil litigation specialist, Steve follows a consistent andsuccessful approach to every case: be totally prepared and deliver results. Known for intensepreparation and exceptional courtroom skills, Steve has built his reputation on consistentwins in difficult and complex cases. Aside from his impressive advocacy skills, Steve provideswise counsel to clients, assisting them in avoiding costly litigation where possible.Representative mattersAs a leading lawyer with more than 25 years experience as a civil litigator and insolvencyspecialist, Steve has worked with a diverse group of clients in finding solutions to challengingsituations and when required, delivering successful results in Court. Some examples of theservices Steve has performed for his clients include:• Acting as legal counsel to various stakeholders in numerous insolvency proceedingsunder both the Companies’ Creditors Arrangement Act and the Bankruptcy andinsolvency Act.• Acting as legal counsel to Canada’s leading life and disability insurers and a regularcontributor and speaker at events organizes by the Canada Life and Health InsuranceAssociation.• Acting as legal counsel to government and industry on a multi-million dollar lawsuitrelating to a bid-rigging and price fixing conspiracy.• Acting as lead counsel on the successful defence of product liability claims, includingclaims against a global leader in fibreglass-based products and claims against a majorinternational supplier of fish feed.• Successfully challenging an exparte order obtained by the Commission of Competitionagainst leading members of the Canadian Brewing Industry.• Acting as counsel to a major Atlantic Canadian Industry leader in the defence ofexecutive level wrongful dismissal litigation.• Acting as lead counsel in the defence of wrongful dealer termination claims againsta global leader in the supply and distribution of equipment for the forestry and agricultureindustries.

Contact informationSuite 1000, Brunswick House44 Chipman HillSaint John, NB, CanadaE2L 2A9Direct Dial: 506.632.2784Direct Fax: 506.634.3579Email: shutchison@stewartmckelvey.comAreas of practiceCivil LitigationCorporate and Commercial LitigationLife and Disability InsuranceCorporate Restructuring and InsolvencyProduct LiabilityWrongful Dismissal LitigationCompetition ActLandlord and TenantEducationUniversity of New Brunswick, LL.B., 1983University of New Brunswick, B.A., 1980Bar admission(s)New Brunswick, 1984LanguagesEnglishRatingsMartindale-Hubbell (CV)Law society membershipsLaw Society of New BrunswickSaint John Law Society

Activities• Member, Canadian Bar Association• Practice group leader, Commercial Litigation and Insolvency, Stewart McKelvey, 2012 topresent• Practice group leader, Life & Disability Insurance, Stewart McKelvey, 2008-2012• Member, Atlantic Salmon Federation• Member, Miramichi Salmon Association• Director, Maritime Quarter Horse AssociationPublications• “New Brunswick Court of Appeal Narrows the Test of Intention in Inducement of Breachof Contract Cases”, Atlantic Business Counsel, December 2010Presentations• “Duty to Make Full and Frank Disclosure on Initial CCAA Applications” – Canadian BarAssociation, 2012• “International Insolvency – Reflections on the Landdrill CCAA Proceedings” – CanadianBar Association, 2013• “Essential Legal and Legislative Update” – CLHIA Claims Section Annual Conference,2013• “Litigation Strategy for In-House Counsel” – Stewart McKelvey Professional DevelopmentDay, 2013• “Duty to Make Full and Frank Disclosure on Initial CCAA Applications” – Canadian BarAssociation, 2012• “CCAA and BIA Proposal Procedures -Overview and Recent Developments” StewartMcKelvey Canadian Corporate Counsel Association, New Brunswick Chapter, 2012 LawFirm Series Seminar, 2012• “A Legal Review of Social Media for Surveillance”, CLHIA Claims Section Annualconference, 2011• “Civil Search Warrants to Preserve Evidence – Anton Piller/Norwich Orders”, StewartMcKelvey Business Disputes Breakfast Seminar, 2011• “Recent Decisions on Facebook & “Recent Decisions on PIPEDA”, The Canadianinstitute Conference, 2010• “Recent Decisions on Facebook” and “Social Networking Sites”, Stewart McKelveyinsurance Law Seminar, 2010

Sarah Dever Letson“The leading rule for the lawyer, as for the man of every other calling, is diligence.Leave nothing for tomorrow which can be done today.” – Abraham LincolnDown-to-earthSarah communicates openly with her clients, taking the time to listen to what her clientsreally need. By fully understanding their business and the results they are looking for, Sarahcan help them achieve their goals with cost-effective, practical solutions.Representative mattersSarah applies her specialized expertise when representing insurance companies, as well asmedium and large businesses. Her work has included:• Appearing in the New Brunswick Court of Appeal, the New Brunswick Court of Queen’sBench, and the New Brunswick Small Claims Court.• Managing and coordinating a massive document review and production project as part ofa large commercial litigation matter.Contact informationSuite 1000, Brunswick House44 Chipman HillP.O. Box 7289, Postal Station ASaint John, NB E2L 4S6Direct Dial: 506.632.2764Direct Fax: 506.634.3579Email: sletson@stewartmckelvey.comAreas of practiceLitigationInsurancePrivacy LawHealth LawEducationUniversity of New Brunswick, LL.B., 2005University of New Brunswick, B.Sc. (honours), 2001

Bar admission(s)New Brunswick, 2006LanguagesEnglishLaw society membershipsLaw Society of New BrunswickActivities• Member, Canadian Bar Association• Contributor and/or speaker at annual Insurance Day, Stewart McKelvey• Vice-president and director, Saint John Theatre Company• Director, Saint John Diocesan Cemetery Company