Labor lawsuits and debt maturity

Purpose This paper aims to investigate how firms’ relationships with employees define their debt maturity. The authors empirically test the role of employee litigations in influencing firms’ choice of short-term versus long-term debt. The authors study employee relations by analyzing the importance of the workplace environment on capital structure. Design/methodology/approach The author’s test hypotheses using a sample of US publicly traded firms between 2000 and 2017, including 3,056 unique firms with 4,256 unique chief executive officer, adopting the fixed effect panel model. Findings The authors document that employee litigations have a significant negative effect on the use of short-term debt and a significant positive affect on long-term debt. Employee litigations, along with legal fees, outcomes and charging parties, matter the most in explaining debt maturity. In addition, frequently sued firms abandon the short-term debt market and use less shareholders’ equity to finance their operations while relying more on the longer debt market. Originality/value To the best of the authors’ knowledge, this is the first study to examine the role of employee mistreatment in debt maturity choice. The study extends the lawsuit and finance literature by examining unique, hand-collected data sets of employee lawsuits, allegations, violations, settlements, charging parties, case outcomes and case durations.

The effect of firm-specific litigation risk on independent director conservatism

PurposeThe purpose of this study is to examine whether firm-specific litigation risk affects independent director conservatism in the oversight of financial reporting.Design/methodology/approachThis study considers the enactment of Sarbanes–Oxley Act and the main US stock exchanges' corresponding corporate governance regulations in 2002–2003 as an exogenous shock event to increase board independence. OLS regressions with fixed effects are conducted to test the hypothesis.FindingsChanges in discretionary accruals from the pre-event year (2001) to the post-event year (2004) are more negatively associated with an exogenous increase in board independence for firms with high litigation risk than for firms with low litigation risk.Originality/valueThe results suggest that independent directors are more conservative in overseeing financial reporting when they face higher litigation risk, consistent with the notion that they are still concerned about liability risk although they seldom have to pay damages or legal fees out of their own pockets.

The Speed of Justice

Can procedural reforms improve judicial efficiency? And do improvements in judicial efficiency benefit firms? We combine the staggered roll-out of a reform that required judges in Senegal to complete pre-trials within four months with high-frequency caseload data and firm tax filings. The reform improved judicial efficiency, with no e.ect on quality. Firm monthly revenues drop by 8-11 percent upon entering pre-trial, and decline by on average 3.2-5.0 percent for every 100 days a case spends in pre-trial. Survey results show firms are willing to pay higher legal fees to achieve post-reform speed, suggesting positive benefits of the reform on firms.

Lawyer Expertise and Contract Design – Evidence from M&A Negotiations

We argue that the relative expertise of contracting parties strongly affects contractual outcomes. Using unique data on company acquisition contracts, we document that lawyers with higher expertise relative to their counterparties negotiate better risk allocation for their clients and more favourable target prices. The benefits of high expertise outweigh its costs, largely because high-expertise lawyers economize on transaction costs by shortening negotiation times. Our findings suggest a need for explicit modelling of contracting skills, and they help explain heterogeneity in legal fees across law firms and the role of league tables of law firms.

Power in Civil Litigation

Blindfolded Lady Justice represents the ideal of justice – a system that has no regard for the parties’ power and is attentive only to the justice of a case. The reality, however, is that power does influence the course of civil litigation in Aotearoa. This article considers the dynamics of power in civil litigation, including the types of parties involved in disputes. It then surveys and evaluates potential areas for reform, including suppressing lawyers’ fees, equalising the legal spend between opponents, removing lawyers from disputes, increasing judicial control, conglomerating claims, and involving the public in procedure reform. It concludes that the most promising areas for reform to be pursued in concert are: regulation of legal fees, increasing judicial control and involving the public in civil justice reform.

How Some Lawyers Prioritise Earnings and Not Necessarily the Best Interests of Their Clients

This case deals with an employee seeking justice in a labour dispute and who ends up paying a small fortune in legal fees and still fails to find satisfaction. The case provides food for thought for human resource practitioners and particularly lawyers regarding under the circumstances when they should be ethically bound to advise disgruntled employees to cease pursuing a grievance that has little prospect of success. How and when should the human resource practitioner provide professional and independent advice, and when should the ethical (sic) lawyer refuse to approach the courts with a case containing insufficient merit?

Cost Anatomy of A Vessel Spill Response

The focus of this paper is to highlight cost issues that have arisen during actual spill responses in the United States including issues related to a Responsible Party's (RP) named Spill Management Team (SMT), its named Oil Spill Response Organization (OSRO), the USCG, the National Pollution Fund Center (NPFC), and state/local government agencies. In addition, there will be a brief discussion related to third party claim costs and management. The author's sincere hope is that this paper will generate meaningful discussion concerning the issues raised that, in turn, will lead to reasoned changes resulting in lower, and more palatable response costs. The purpose of this paper is to highlight issues, not to criticize or embarrass individuals or entities. Accordingly, no company or individuals will be identified. This paper is not all inclusive and does not include costs related to Natural Resource Damage Assessment (NRDA), fines, or legal fees. In addition, while recognizing that entities other than vessels are covered under OPA 90, this paper, as noted in the title, concerns only spills from vessels. All opinions expressed in this paper are solely those of the author.

Fakes v. Republic of Turkey

279Jurisdiction — Foreign investor — Nationality — ICSID Convention, Article 25 — Dual nationality — Effective nationality — Whether an effective nationality test must be read into Article 25 of the ICSID Convention — Whether the explicit exclusion from jurisdiction of dual nationals who held the nationality of the host State was the only jurisdictional bar related to a natural person’s nationality under the ICSID ConventionApplicable law — Customary international law — Diplomatic protection — Effective nationality — ICSID Convention, Article 27(1) — Whether the rules of customary international law applicable in the context of diplomatic protection applied to determine nationality in investor–State arbitrationJurisdiction — Investment — ICSID Convention, Article 25 — Salini test — Legality — Whether the four elements of the Salini test must necessarily be met to determine the existence of an investment — Whether the three objective criteria of contribution, duration and risk were both necessary and sufficient to define an investment within the framework of the ICSID Convention — Whether the applicable BIT imposed further limits on protected investments — Whether the investment fell within the scope of the requirement of legality under municipal lawJurisdiction — Investment — Shares — Evidence — Burden of proof — Whether the share certificates were valid under the law of the host State — Whether the heavy burden of proof of alleged impropriety was met — Whether the claimant held legal title over the share certificates said to constitute the investmentEvidence — Burden of proof — Impropriety — Whether the burden of proof of any allegations of impropriety was particularly heavyCosts — Frivolous proceedings — ICSID Convention, Article 61(2) — ICSID Arbitration Rule 28 — Whether an arbitral tribunal had discretion in frivolous proceedings to allocate the arbitration costs and the legal fees and expenses between the parties by ordering the losing party to bear in full the costs of the arbitration and the entirety of the legal fees and expenses incurred by both parties