GamePolitics reports that the Australian Federal Court "has ordered RSJ IT Solutions, operators of the website GadgetGear, to stop selling R4 mod chips for the Nintendo DS and to pay Nintendo $520,000 AU in damages".

You might fairly assume from that headline that modchips are illegal in Australia.  Not so.  When we previously discussed the legality of modchips previously at Gamer/Law, we saw that in the last-reported Australia case on modchips, the Australian High Court ruled that modchips for the Playstation 2 were not illegal.  As I understood it, the Court's reasoning was that, since the Playstation 2 technology had only ever sought to stop players playing unauthorised games but had not sought to stop them copying those games, a modchip which assisted players to play but not copy unauthorised games was not an attempt to circumvent "technological protection measures" under Australian law. 

Does this Nintendo case overrule that law?  Apparently not.  According to Australia's ITNews, the Nintendo case was actually settled out of court, meaning that all the Court was doing in the order which GamePolitics referred to was setting out what RJS IT Solutions had agreed to pay to Nintendo in the settlement.  It would not therefore mean the court has changed Australian law.  If that's right, then it seems to me that modchips are presumably still legal in Australia (although, of course, Nintendo may well have had powerful arguments in the litigation that the law should actually be changed - modchips are illegal in the UK and USA after all).  Glad to hear from anyone with greater Australian legal experience who knows different...

A UK High Court judge has found games publisher SouthPeak liable for inducing copyright infringement in a long-running legal battle between CDV, a German distributor of games including Velvet Assassin and Pirates vs Ninjas, and Gamecock, a SouthPeak subsidiary. The judgment follows a November 2009 Court ruling which saw CDV win a breach of contract claim against Gamecock and SouthPeak.

The root of the battle lies in a 2008 distribution agreement between CDV and Gamecock, under which Gamecock agreed to license exclusively to CDV seven games ("Dementium", "Insecticide", "Mushroom Men", "Velvet Assassin", "Hail to the Chimp", "Pirates vs Ninjas" and "Stronghold Crusader Extreme").

CDV claimed that it had paid Gamecock advances of over $7 million but that, contrary to their agreement, four of the games were not delivered in time for a pre-Christmas 2008 release.  CDV therefore gave a notice to part-terminate its agreement with Gamecock and subsequently sued Gamecock for damages for breach of contract, as well as arguing that SouthPeak was liable for inducing copyright infringement and breach of contract.  Gamecock and SouthPeak defended the lawsuit, arguing that CDV had no right to terminate the contract.

In November 2009, Mrs Justice Gloster published her judgment which found in favour of CDV on the breach of contract claims for three of the four games.  However, she reserved her judgment regarding CDV's claim against SouthPeak for (i) inducing copyright infringement; (ii) inducing breach of contract; and (iii) legal costs.

In her second judgment published on Friday, Mrs Justice Gloster ruled as follows:

Mrs Justice Gloster ruled that she was:

"Satisfied, on the basis of the evidence before [her] at trial, that CDV has established on the balance of probabilities that SouthPeak US has both participated in, and authorised, the infringing activities in relation to the making, distribution, and sale" of the four CDV games in question.

In a nutshell, the legal reasoning went like this: Gamecock had licensed games to CDV, but when Gamecock breached its agreement with CDV it forfeited those rights to CDV and therefore the copyright in the games became CDV's.  However, Gamecock refused to admit this and tried to sell the games itself, which constituted copyright infringement.  SouthPeak, as Gamecock's parent, was found liable for inducing that copyright infringement.

CDV had claimed that SouthPeak, as Gamecock's parent, had induced Gamecock to breach its contract with CDV and should be liable for damages.  Mrs Justice Gloster ruled that CDV failed in this argument.

Legal nutshell: if Alan has a contract with Bob and Chris persuades Bob to breach that contract, then Alan can sue Bob for breach of contract but can also potentially sue Chris for inducing the breach of contract.  However, case-law states that Chris has to intend to induce a breach of contract.  There is no liability if Chris didn't realise he was inducing Bob to breach the contract with Alan.

Here, Mrs Justice Gloster held that SouthPeak did not realise it was acting wrongly, in fact its witnesses gave evidence "to the effect that they believed that they were entitled to act as they did" and there was nothing "which suggested that they did not genuinely believe that Gamecock and the other defendants were entitled to act in the way which they did".  Therefore, CDV lost its claim for inducement of breach of contract.

Mrs Justice Gloster ruled that "SouthPeak US must, jointly and severally with the other Defendants, pay the Claimant's costs of the claim and of the counterclaim, including any reserved costs".  We do not know exactly how much those costs were (yet), but they are likely to be substantial.

 Confused?  Want to discuss further?  You know where to find us...

The UK Digital Economy Bill has real implications for all UK creative industries, including games, meaning gamers and the UK games industry should be paying attention to the Bill's progress through Parliament.  This post summarises what the Bill is and why it matters.

The Digital Britain Bill ("DEB" for short) is essentially the UK Government's attempt to bring UK technology/IP law up to speed with the challenges of modern technology, particularly online piracy.  The Government's Explanatory Notes give further helpful background here.

DEB actually covers a whole range of reforms, from IP to digital infrastructure to digital radio switchover.  But the aspects of DEB which are most relevant to games, and which also happen to be the most controversial generally, are these:

DEB also proposes a new games classification system – more on that here.

The old deal...

Under the existing law right now, if a dev/publisher (i.e. the rights holder(s) for a game) wants to take legal action against a illegal downloader of that game (call him/her 'X'), very basically the dev/publisher needs to:

This can be expensive, difficult and lengthy because: (i) ISPs have historically refused to help rights holders to sue their own customers (hence the need for a court order); and (ii) actually finding the illegal download requires the rights holder to expend IT resources.  (It is mainly for this reason that the music industry in particular has tried to use these kinds of lawsuits to make examples of high profile pirates, rather than trying to sue everyone who downloads copyright materials illegally).

The new deal...

DEB now proposes a new legal regime which would go something like this:

This proposed new regime is meant to be easier and cheaper because: (i) rights holders and ISPs work together; and (ii) a lot more action can be taken against pirates, potentially even suspending their net access altogether.  However, there is no suggestion that the Government is proposing a 'three warnings and then we cut you off' scheme.  So DEB does not = Three Strikes; it's more complicated/nuanced/vague than that.

Anyway, the proposed new regime has caused a great deal of controversy in both mainstream media and teh internets, to say the least…(that much is clear from a quick Google of "Digital Economy Bill" if nothing else).  Here's why…

How is the customers' side of the story to be heard when 'technical measures' are taken against him/her?  The right to a fair hearing is a fundamental human right and is given legal force in the UK by the Human Rights Act 1998 and European Convention on Human Rights, but - so far - DEB has little to say about this.  This report from Parliament's Joint Select Committee on Human Rights explains the issue succinctly:

"We do not believe that such a skeletal approach to powers which engage human rights is appropriate. There is potential for these powers to be applied in a disproportionate manner which could lead to a breach of internet users' rights to respect for correspondence and freedom of expression. We set out a list of points that the Government should clarify in order to reduce the risk that these proposals could operate in a manner which may be incompatible with the [European Convention on Human Rights..."

And:

"There is little detail about the right to appeal in the case of copyright infringement reports or decisions about the inclusion of certain individuals' information on copyright infringement lists. We consider that statutory provision for a right to appeal to an independent body against inclusion on any infringement list would be a human rights enhancing measure."

In fairness, we should point out that attempts have been made to address these issues so far; it is not at all as if DEB has sailed through Parliament so far.  For example, Lord Lucas in the House of Lords has been active in trying to reform DEB generally, and particularly regarding this new 'technical measures' regime (more here).

UPDATE:

In a nutshell, not a great deal has happened to address these concerns.  DEB provides that a consumer has a right to appeal to court if "technical measures" are made against him, but there is a great amount of detail about how this is meant to actually work that just isn't clear yet.

DEB also proposes to give the Government the power to amend copyright law through a shortcut procedure that bypasses Parliamentary scrutiny (this proposal is known popularly as 'clause 17').  The Government's reasoning seems to be that it needs to be able to act fast in order to meet the increasing technological challenges to copyright protection. Example off the top of my head: the Government changes the law to make it easier to sue and heavily punish people who attempt to circumvent DRM protection.

This proposal has also come under heavy fire, so much so that the Government has had to back down and water down its original proposals.  Even so, it is not enough for some.  Again, the Joint Select Committee summarises the issue:

"The broad nature of this power has been the subject of much criticism. In correspondence with us, the Secretary of State explained that the Government intended to introduce amendments to limit the power in Clause 17 and to introduce a 'super-affirmative' procedure. The Government amendments would limit the circumstances in which the Government could use their powers to amend the Act by secondary legislation and would provide a system for enhanced parliamentary scrutiny."

Despite the proposed amendments we are concerned that Clause 17 remains overly broad and that parliamentary scrutiny may remain inadequate. We call for a series of clarifications to address these concerns."

UPDATE:

Under heavy criticism, the Government appears now to have effectively shelved clause 17.  However, at around the same time, the Lib Dems proposed a new section which would give a court the power to take actio against web sites which host "substantial" amount of copyright-infringing material, potentially forcing the entire site offline.  Critics pointed out that this could mean sites such as YouTube being shut down.  Then, further controversy was caused when it emerged the amendment had in fact been drafted by the BPI.  You couldn't make it up, eh?

The Current status of the Digital Economy Bill

UPDATE:

On 15 March 2010, the Bill passed the House of Lords and has now gone to the House of Commons.  In theory, a bill is first introduced to the Commons (the first reading, which is really a formality), then properly discussed for the first time in the second reading, then it goes to a committee/report stage for a fine tooth-comb analysis, before finally it has a third reading (essentially a closing debate).  Then, if the bill came from the House of Lords in the first place (which DEB did), it goes back to the Lords so they can review what the Commons have done for the bill, and then finally there is a vote.

BUT, there are several reports that the Government intends to ram DEB through before the general election, by having an extremely short second reading and dispensing with the committee/report stage altogether.  You can make up your mind as to whether having DEB brought into law before it has gone through the normal parliamentary process is a good or bad thing.  So far, the games industry and gamers seem pretty divided on the issue.

Of course, even if for some reason DEB doesn't become law this term, then a new Labour or Conservative government would just have to deal with it after the general election.

Why is all this important for the UK games industry?

The games industry will be at the forefront of these developments. If the UK Government adopts via DEB a legal regime that permits technical action to be taken against the net access of suspected online pirates/copyright infringers, it would give the UK games industry a powerful weapon to deploy against games piracy/copyright infringement - which is of course often said to be the single greatest threat that the industry faces. So, in principle it would be possible to deploy 'technical measures' against individuals who repeatedly download and distribute illegal copies of games – which could for example prevent a repeat of Spore, said to be one of the most pirated games in history.

In fact, it may cover rather more than that - in principle, it may in the future be possible to take technical measures against all forms of online copyright infringement relating to a game, including individuals who distribute unauthorised game modifications (eg additional game levels or a total conversion mod) and/or who create user-generated content relating to games (eg unauthorised in-game footage posted on YouTube).

So the person who distributes a brilliant but unauthorised mod of a defunct but well-loved game, or the person who repeatedly posts unauthorised footage of upcoming or released games online, could potentially face technical measures against his/her internet access in the future. Obviously, the devil would be in the (legal) detail but, clearly, if this kind of action was possible it could transform the games industry.

BUT, and it's a big but, time and again gamers have shown themselves to be hostile to what can be seen as attempts by the games industry to impose limitations on the way in which they can play and interact with games (as seen recently for example the continuing DRM saga).  The games industry would likely have to tread a fine line between relying on technical measures to protect their games but, at the same time, not alienating their customers or stifling the enjoyment and innovation derived from the creation and use of mods and other post-release user generated content.  It's worth noting on that front that many games industry figures have already spoken out in favour of market-driven solutions to games piracy for example, rather than just relying on a legal regime.  But, one way or the other, in an industry which depends heavily on the loyalty and enthusiasm of its customers, this is likely to become an issue of great importance in the future. 

Ultimately, the question for the games industry may not be whether they can legally deploy these strategies to defend their games, but whether commercially they can risk it.

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[image author: Andrew Dunn, obtained via Wikipedia]

Gamesindustry.biz reports that US developer Cheyenne Mountain Entertainment has filed for Chapter 11 bankruptcy protection.  The developer group is known chiefly for its Stargate licence (it has already made Stargate Resistance and is apparently continuing work on the forthcoming MMO Stargate Worlds).

This news itself comes from a statement made on CME's Stargate forum, which is here.  Contrary to what Gamesindustry says, it is not actually clear from the statement whether CME has entered Chapter 11, or just its subsidiary Firesky, the actual developer of Stargate Resistance (if it turns out just Firesky is in Chapter 11, we'll update this post).  Leaving that to one side, the statement is a useful summary explaining what Chapter 11 bankruptcy protection actually is and why a company would need it:

"Cheyenne Mountain's corporate structure has undergone some dramatic changes in the last few weeks, and that has resulted in various actions such as the filing for Chapter 11.

"Certain parties believed that was the right thing to do, other parties do not and this is still being evaluated and may be rescinded. Even if the bankruptcy should go through, however, Chapter 11 simply allows a company to restructure its debt to a manageable plan approved by the courts. It does not absolve a company of debt, and it does not shut it down or otherwise affect its daily operations. 

"This will all be sorted out in the legal and proper manner, and all of us on the development side of things hope it's done as quickly as possible. That said, our entire staff is in-house working on upgrades and expansions for Stargate Resistance, and we continue to be motivated and excited by the response we've received from our customers."

So:

The closest UK insolvency procedure to Chapter 11 is called administration (more info at Wikipedia, with the usual Wikipedia caveat), another statutory scheme intended to help a company in financial difficulties to trade through its problems and come out the other side.  Example: last year UK developer Oxygen Games went into administration.

As always, happy to discuss furth if anyone is so foolish as to want more information, do let us know...

In the meantime, here's hoping Cheyenne can indeed trade through and keep up work on Stargate Worlds (they'd probably get my subscription if they did, plus plenty of folks too I imagine...)

CME has also decided to sue its former Chairman & CEO, Gary Whiting, according to a statement on its web site:

"Mr. Whiting and Garvick [a company controlled by Whiting] purchased various securities from the Company and its subsidiaries and has failed to honor the terms of these purchases and has failed to pay the payments when due; therefore, the Company and its subsidiaries have foreclosed on the collateral securing Mr. Whiting’s and Garvick’s obligations including all shares and units owned by Garvick and Garrick Enterprises, LLC.

The shareholders and board of the Company have removed Mr. Whiting as a board member and as an officer and terminated his employment with the Company and any of its subsidiaries. The Company has joined the litigation against Mr. Whiting for alleged wrongdoing."

Oh dear.  So the allegation seems to be that Whiting used his position to purchase company assets either personally or through his company Garvick, or in somehow made Cheyenne responsible for his/Garvick's liabilities, which somehow Cheyenne has now found out about.  This of course raises the question as to why Whiting would have been removing company assets, which hopefully the litigation will explain in due course.

One final point: the press statement also says "It is uncertain at this time what the affect of Mr. Whiting’s actions and the pending litigation will have on the Company’s operations and financial condition."  But the press statement we talked about about said "the company" was going to enter Chapter 11.  So is Cheyenne in Chapter 11 or not?

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GAMER/LAW WEEKLY FEATURE: 

Games, Disability and Anti-Discrimination Laws: http://www.gamerlaw.co.uk/2010/02/games-disability-and-anti.html

We're talking R-Type. We're talking Super Ghouls and Ghosts. We're talking 2D, side-scrolling games with screen-height enemies. Boss fights with opponents who literally take up 30 or 40% of the available playing area, and are ugly as sin to boot.

(Jas: We want games developers to be more ambitious with the technology now available: why not bosses who are 500% your screen size? Of course, that would mean you could only attack his/her/its knee, but so what?)

Guybrush Threepwood, Roger Wilco, Larry Laffer. Time was, the lead characters in games were heroic losers, rather than the barrel-chested, cigar-chomping death machines popular today.
It's to the detriment of modern titles that this nerd factor seems to have slipped from fashion. We’re not saying that Gears of War would be a better game if Guybrush were the lead, but let's just consider it for a moment. He could trade insults with a brumak. He can spit further than Marcus Fenix. And he doesn't wear a bandana (as much). We rest our case.

Now, we know what you're thinking here: what about Gordon Freeman? Let's get one thing straight – anyone who beats aliens to death with a crowbar and slices zombies in half with buzz saw blades is not a nerd. He may have glasses. He may have a science background. But don't be fooled - he's not a nerd. He doesn't even speak.

(Jas: And that's another thing about Gordon Freeman: how comes he manages to lead a rebellion against the Combine/save the world/make friends for life/get jiggy with Alyx (nearly), right, when he doesn't even speak?)

Okay, so this term lives on in relation to beat-em ups, but we're not talking about your mate who can't dragon punch here. Oh no – we're talking Track and Field.
Somewhere back in the mists of time a developer asked themselves the question – how can we most closely recreate the sense of competing in sports at the highest level? And the answer they came up with was button bashing.

The premise was simple: whatever sport you're competing in, whatever Olympic event, the control method is the same. There are two buttons, and you must batter them. Not in any sequence, not with any finesse. Just batter them. For several minutes. Until you or they break.

And you know what? For the first 10 seconds it's great fun – your sprite comes racing out of the blocks in the 400 metres and takes what looks like an unassailable lead. It's only at about the 20th second of continuous button bashing, shortly after carpal tunnel syndrome sets in and with at least another minute of similar agony to go, that you realise what you've let yourself in for. And by then it's too late.

There are echoes of this unique experience in certain modern games – Through The Fire and Flames on expert on Guitar Hero, the swimming relay on Mario and Sonic at the Olympic Games, but these are just pale imitations of the real thing. If you want to know what running a marathon feels like, you need to play Track and Field. With your mates. And pride at stake.

(Jas: once long ago my best friend and me were playing 1v1 Counterstrike and he kept on using a wallhack to kill me even though I told him to stop being such a noob, but he didn't stop, which got me so irate that I rage-quit, took my keyboard over to his house, and hit him with it. Does that count as 'button bashing'? Maybe not)

8) The Gaming Press

Not that we don't love Edge, Games TM, Penny Arcade and the myriad websites and blogs we spend our lives perusing, but the golden age of gaming was accompanied by a golden age of games journalism.
Your Sinclair, Ace, Zero…. these weren't just magazines. They were a window into an alternative way of life, populated by strange men with ridiculous barnets and an epic willingness to spend every waking hour playing the games they loved (and many they didn't).

With no PR machine and comparatively little hype surrounding the games releases of the day, these heroes were free to do as they pleased, dispensing their views pure and untainted to anyone who would listen in an environment which called to mind the classroom left unattended.

Younger readers, meanwhile, were left to wonder at it all. Were these guys really getting paid actual money to write about games?

9) Side-scrolling beat 'em ups


Many happy hours used to be spent with mates battling through gangs of street thugs on games like Teenage Mutant Ninja Turtles and Streets of Rage (what a great name for a game: "Streets of Rage").
The premise was simple – you started at one end of a long stretch of road/lab corridor and you strolled forward cracking skulls until you reached the other end, usually with a second player along for the ride. Gaming in its purest form.

Who can forget the shock and horror of being forced to face down your own brother at the end of Double Dragon? Or the incredulity we all felt at being told that Final Fight's Haggar really was the elected mayor of Metro City? (Jas: you know way too much about side-scrolling beat 'em ups, Dan).
Not Gamer/Law, that's for sure. And yet, astonishingly, these games are now deeply, deeply unfashionable.
Was it 3D graphics that put paid to the side-scrolling beat 'em up? Or maybe the arrival of Street Fighter II? We'll never know for sure, but what we can say with absolute certainty is that we miss them.

10) Code Meddling

Back in the day, before developers decided to just offer you up the whole candy store from day dot, gamers would often invent sneaky backdoor tricks to enable themselves to get beyond the first level.

The attractions on offer were vast: infinite lives, infinite health, infinite time. The mind boggled. And it boggled even further when you discovered what you would need to do to get the cheat to work.

We Gamer/Law folks cannot be the only people who recall the heady days of cheats for the ZX Spectrum – 2 or 3 pages of computer code which had to be laboriously inputted so that Robocop would have infinite ammo. Space shuttles have been launched with less prep time (and certainly with less tears of rage).  Things improved somewhat in the 90s with the arrival of stalwarts like Game Shark and Action Replay. Cheating was still not a simple affair – it now involved the purchase of additional kit and still required code
inputs - but the range of available options was far broader. Suddenly we were walking through walls,
jumping tall buildings in a single stride and accessing hidden levels.

These were real, honest to goodness cheats. Gamers messing with the game's very coding to get what they wanted. It went up about as far as Quake, which had at least one secret comedy-themed room you could only access via a no-clip cheat, but since then it seems to have died out. You might see something a bit similar nowadays, maybe a Team Fortress 2 server or two with the gravity turned off, but it doesn't have quite the same air of renegade cool.

Even if it's something as simple as accessing the code on your mate's copy of Champ Manager and rewriting the match commentary to deliver frank home truths about his personal hygiene, we miss the good old days when you could get under the hood and mess about.   These days it's all hardware based, with some gamers messing around with modchips (which are very illegal of course)

Gamer/Law's detailed, reasoned conclusion:

It's just not the same anymore, innit?


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So, we hear that Erik Estavillo, the serial plaintiff against games companies, has dropped all of his lawsuits against companies including Microsoft, Sony and Activision-Blizzard.   He became known late last year for these rather creative lawsuits, which involved some pretty odd actions like suing Blizzard for his character moving too slowly and his claims that he would subpoena celebrities including Bill Gates and Winona Ryder.  Now it seems that his claims will never go before a judge.

Victory of course for the games companies, who we would guess have been able to ignore Estavillo entirely (standard practice with these kinds of lawsuits) to date anyway.   Of course, it would have been perfectly possible for their lawyers to go straight off to court and seek to swat Estavillo's lawsuits out of the sky with 'strike out' applications (i.e. to argue to the judge that Estavillo's claims are completely hopeless and should not proceed any further), but that would (i) have cost money; and (ii) would have given Estavillo more publicity.

The difficulty for Estavillo now is this: if the companies which he sued HAVE incurred legal costs in defending his lawsuits, then in principle they would be entitled to sue him for payment of those costs.  This is the 'loser pays costs' principle, a key aspect of litigation in England and most other common law jurisdictions.  Its main objective is to deter claimants from bringing hopeless claims by making them face the risk of later having to  pull the claim and pay both their and the other guy's legal costs. 

Of course, whether or not anyone actually goes after Estavillo for legal costs will depend on three things:

(i) Whether the civil procedure in the appropriate US state permits it (and it's worth bearing in mind that generally the USA is less in favour of the 'loser pays costs' principle)

(ii) Whether Estavillo could pay up anyway

(iii) The publicity that going after Estavillo would generate.

On balance, we think it's unlikely any of these companies would actually sue for their costs, but it is always possible.  Anyway, the point of this post is that Mr Estavillo's case is a great example of the golden rule in litigation: choose your legal battles carefully.

Source: GamePolitics

This is a post for games developers and publishers about lawsuits and what you can do when you face one.

Lawsuits are a fact of life in all businesses, the games business included.  Lawsuits can come out of virtually anywhere: a disgruntled consumer, a rival looking to get ahead, a business partner who thinks you've breached your contract with them, the list goes on.  If you are very lucky, you might avoid having to have anything to do with a lawsuit, but it's more likely than not that at some point you will have to get involved.  If so, then you might find useful the following summary about what to do and what to think about.  It's primarily aimed at what to do if you are faced with a lawsuit, but it applies just as well if you are thinking of bringing a lawsuit against someone else.

There's no way around it: the only sure way to know if you are facing a strong or weak lawsuit is to talk to a lawyer about it (preferably a disputes specialist).

Yes, that involves some money, but experience shows that a little legal advice early on could save you a lot of money later on.  Besides which, some lawsuits can be a serious threat to a business and so they should be treated as such.

Of course, maybe the lawsuit is obviously without merit or has a small monetary value, meaning that throwing a lot of money at the lawsuit may not be worth it financially.  If so, then perhaps it can be handled by a lawyer on a reduced-rate or possibly even pro bono basis (if yours is a sufficiently worthy case) or, failing that, perhaps it could be dealt with by someone on the business side who has some legal experience (though that's not ideal, given how high-stakes and complicated litigation can be). 

Your lawyer will be able to advise you on:

(i) the legal strength of the lawsuit against you and what it could mean for your game/product/business.

(ii) the jurisdiciton for the lawsuit (i.e. in which country will the lawsuit take place and under what country's laws - this is pretty important, given today's globalised games industry and playerbase).

(ii) the prospects of success and your best/worst case scenario in terms of the possible outcomes.

(iv) how best to respond to the other side and what to say.

Your lawyers will be able to work with you to figure out whether you should fight the lawsuit, stonewall it or settle it.  Some key issues to discuss with them when formulating your strategy:

Litigation goes through broadly three stages:

(i) initial phase/setting out the legal case;

(ii) second phase/evidence gathering, including document review, witness evidence and possibly the use of experts; and

(iii) third stage/preparing for and going to trial.

If and when it comes to the legal fight, your lawyers will be able to advise you what legal weapons are available to you.  For example, if the lawsuit against you clearly has no merits at all, then you may try to have the case thrown out of court (known as 'strike out').  Or, if the lawsuit clearly has some muscle, then you might want to take steps to try to settle the claim early.

More generally, a lawsuit can go through many twists and turns during the litigation process (hence why litigation is often compared to a rollercoaster).  Experienced litigators will tell you about unlikely cases that were ultimately won and of sure-fire lawsuits that somehow never made the grade.  All of this means that litigation can be RISKY, so you can never take the result absolutely for granted (for this reason, many cases settle using ADR - more on that below).  On the other hand, a judgment from a court is the best way of settling a dispute, particularly if it is a real threat to your business.

ADR is the title given to different methods of settling disputes without having to go court.  The classic example is mediation, where both sides sit down in a room with an independent mediator to try to  settle their differences.  Another example is expert determination, where both sides put their cases to an independent expert who decides which one has the better case (this can work well in intellectual property disputes).  ADR is popular for good reasons: it is cheaper than full litigation, can be kept confidential and has a good success rate at settling disputes.

So, if you do end with a lawsuit on your hands, it's worth thinking carefully about trying to settle the dispute using ADR, rather than going to court.

Control of legal costs is key for any business involved in litigation, because litigation tends to be expensive.  In fact, in drawn out litigation you can even see the legal costs exceed the money being argued over!

Points to think about:

Drop us a line here if you have a disputes problem, or would like to talk over any of the above. 

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