The Impact of COVID-19 on Legal Reform and Global Litigation

Like nearly every other industry, the legal system has met its fair share of challenges during the COVID-19 pandemic. One particularly difficult obstacle has been the path to legal reform around the globe.

The U.S. Chamber of Commerce’s Institute for Legal Reform (ILR) has been navigating the changes brought upon the litigation landscape by COVID-19. ILR recently gathered a panel of legal experts and leaders to illuminate some of the most pressing issues for the justice system, highlight some major legislative victories during the pandemic, and share what’s on the horizon for global litigation and legal reform.

The Pandemic Altered the Local and Global Litigation Process

Safety restrictions and lockdowns may have paused most of the world, but it did not end legal litigation. Trials persisted, whether it was in-person with safety precautions or conducted virtually.

“We've had very successful, very smooth, entirely virtual trials now … [and] we've had experiences in court where everyone's had to wear masks,” said Andrew Clubok, partner at Latham & Watkins. “Or, there's been lots of plexiglass shields and a very limited number of people that you could bring into the courtroom, which changes things a little bit.”

Despite some of the eased restrictions following COVID-19 vaccine distribution, Clubok said the current litigation process is still a mixed bag.

“It's going to continue to [be a] mix and probably vary across the country, as there are variations in how different areas are handling the pandemic,” he said.

“We had a case recently at our firm where there were just six jurors [and] one of them had a positive COVID test, [which] led to a mistrial in the middle of the case,” Clubok added. “You really have to be ready to roll with the punches, and be prepared for anything and expect the unexpected.”

There’s Been an Upsurge in Class-Action Litigation in Europe and the U.K.

The United States isn't the only region in the world that has seen changes in the legal system. Both the United Kingdom and the European Union have seen a steep increase in the number of class-action lawsuits that have been filed.

According to Kenny Henderson, a partner at CMS Cameron McKenna Nabarro Olswang, there has also been a greater U.S. presence in the global justice system.

“We are seeing a very large increase in the level of attention from U.S. plaintiff law firms enlarging their prices in London, and also further plaintiff firms in the U.S. opening new practices in London,” said Henderson.

“We're also seeing more and more capital coming in from the litigation funders,” he added. “We don't see the foundation so much. Our procedural rules do not require a foundation to be set up to bring group litigation, so we don't have an external non-financial interested party involved. The main drivers [of increased class-action lawsuits] are ... plaintiff law firms and … the funders.”

The Major Mass Arbitration Increase Can Have Negative Effects

Over the last two years, there has been a major increase in mass arbitration. This is when a plaintiff's firm aggregates tens of thousands of claimants for individual arbitration. It's a strategy used to create pressure on the target company; however, it creates many legal resource issues.

“[Law firms are] using the sheer volume of these arbitration demands to essentially break the system,” said Steve Lehotsky, a partner at Lehotsky Keller. “That’s similar to what you would see with social inflation as well.”

“Unless there [are] some more resources put into it on the defense side to keep up with this sort of rising demand on the plaintiff's side, it might be that that's where we end up, which I think would be a particularly bad outcome,” Lehotsky added.