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Around The Firms
17 October, 2007  
Clutz's new document retention policy

Document retention and cost containment receive special treatment in Clayton Utz partners’ chin-wag on how to survive litigation … Then there’s the exciting new province of managing “reputational risk” ... News from Clayton World


Clutz’s latest online vodcast offers sterling advice to those wanting to avoid litigation or, if unavoidable, “at least get out of it alive”.

imageAfter all, the last thing Clutz wants is for clients to be caught in protracted and expensive litigation.

Two of the firm’s litigation boys, Peter Keel and Norm Lucas (pic), chew the fat in a most engaging way. In particular, the importance they place on document retention strategies could not have been more striking.

Norm’s first tip for clients is: “Document, document, document”. That is, make sure you spend money on getting your documents right and having got them right, then …

“Make great efforts to actually retain the document in a safe place where you can locate it easily when litigation is required.”

Peter Keel was concerned at how frequently clients are faced with the problem of vanishing documents:

“The number of times we’ve run pieces of litigation and a client hasn’t been able to track down the original document, the original agreement, surprises.”

Amazing. How come Justice Eames and others got the nutty impression in McCabe v BATAS that Clutz had a hands-on role in “subverting” the process of discovery and rebranding the concept of “document retention”?

imageIndeed, subverting discovery was one of the grounds the firm used to hang former partner Richard Travers out to dry – grounds that did not alter after the Court of Appeal overturned Eames’ findings.

Still, Norm Lucas (pic) in the vodcast seemed pretty insistent:

“Costs tend to spike and also often can expose a party if they don’t give adequate discovery… Have a person within the organization who has central responsibility for actually giving instructions in relation to discovery. Try to make sure it is done properly. You’ll always find there are people in the organization who don’t understand their obligations and you’ll always find there are going to be documents in places that no one ever thinks about…

If you don’t get those and discover them it’s going to cause you problems later on.

Don’t forget, a party’s case can be immeasurably put on the back foot by giving discovery in a cavalier fashion or not giving adequate discovery. It can often distract you from running the substantive matter in the case on which you might have a very strong argument.”

Keel: “Exactly.”

Sound advice like that coming out of the firm seems at odds with the seasoned practice of Clutz’s former cancer stick client, which survived numerous rounds of litigation by systematically denying proper discovery and “retaining” documents in the shredder.

We’ve recounted some instances right here.

* * *

In view of the misunderstandings that can be generated about lawyers’ bills it was only natural that Keel & Lucas should stress the importance of cost containment.

Keel: What we would prefer is to see you either avoid litigation or, if you are unlucky enough to be caught in it, to minimise the cost, to minimise the collateral damage…”

Lucas: Hopefully if you follow some of these tips when litigation can’t be avoided you might survive the litigation and it will be less costly than might otherwise be the case.”

Groper had cause to report on one of Clutz’s cost outings in the WA Supreme Court when Chief Justice Wayne Martin cut the firm’s bill over a dispute about a statement of claim against the Dampier Port Authority from $117,000 to $14,000 – a discount of $103,000.

Wayne thought a rate of $350 an hour would have been reasonable, which worked out at 40 hours work. On the basis of that calculation at $117,000 Clutz was charging at the rate of $2,925 an hour.

Someone also totted up that it would be equivalent to the cost of one person working full time for 10-weeks on objecting to the pleadings.

* * *

The important litigation strategy of “delay” was not canvassed in the Keel-Lucas seminar.

Yet, it was raised by Clutz partner Guy Riley in Darwin when litigation involving negligent advice to a client, George Milatos, loomed into view. Riley even put it in a memo to fellow partner Nicholas Mitaros:

“The longer we muck around arguing about it, the more likely the Limitations Act is going to prevent George from taking any action against us in any event.”

Again, you’ll find the same strategy in the McCabe case where Clutz “misused the litigation process” to take advantage of the fact that Mrs McCabe only had months to live.

* * *

imagePeter Keel (pic) is among those who received the Clutz board memoranda explaining the reasons why Richard Travers and another partner Glenn Eggleton should be sacked from the law shop.

Litigation is dragging-on in Melbourne to overturn the Court of Appeal’s decision in the McCabe case because of an “iniquity” uncovered by the internal Clutz inquiry that effects the legitimacy of the Court of Appeal decision.

No doubt the recipients of the memoranda have kept copies of it. And safely.

* * *

Bravo. Keel and Lucas have co-authored a handy tome, Reputation Matters ($75 from CCH), which should be in every Christmas stocking.

It’s all about managing “reputational risk”, which involves a range of strategies from schmoozing reptiles of the press in order to “get your message across” to suing the pants off them when you fail to get your message across.

As CCH puts it:

Reputation Matters will help lawyers in practice, in-house counsel, communications managers and C-class executives protect and enhance their company’s reputation and ensure their company’s communications are appropriate.”

* * *

Were “reputation management” techniques applied when it came to the 1988 High Court decision in Hawkins v Clayton & Ors?

Claude Hawkins, an executor of a will, sued Clutz because the firm forgot to tell him that he was also a beneficiary.

The High Court upheld Hawkins’ appeal.

In the NSW Court of Appeal the case is referred to as Hawkins v Clayton & Ors trading as Clayton Utz. Yet when it gets to the High Court “Clayton Utz” is kept out of the case title and the citation.

It’s puzzling, because our researches can discover no one called “Clayton” in the Clutz partnership at this time – yet the case is called Clayton & Ors.

How’s that for reputation management?

 
 

Reader Comments

Posted by: Anonymous
Date: October 21, 2007, 8:42 pm

I have found the missing "Clayton" lawyer that may have been responsible for the CLR change of case name in Hawkins v Clayton and Ors - "Michael Clayton" (the movie). It is about a lawyer called Michael Clayton who is "fixer" at a US law firm that destroys key documents and withholds evidence in discovery to ensure that its large multinational client responsible for the deaths of 100s of victims can avoid paying compensation in a mass tort class proceeding. Is it mere coincidence that the fixer is "Clayton" or just the will of God that this should be so?