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Washing dirty laundry in public courts disaster

Washing dirty laundry in public courts disaster

Passing through the headlines in the last few weeks has been the story of Paul McCartney and Heather Mills’s finally-resolved divorce case. Lawyers must be cynics because the first thing that came to my head was the Beatles’ classic chorus: “We can work it out. We can work it ou-out!”

My opinion? Boring! I cannot get excited about another divorce. No matter how well the husband sang, or how stellar the wife’s pre-marriage career was, or how many millions of pounds are in dispute, I still skip past those stories to the sports pages.

But many people did care, all over the world. As well as pages of background stories, The Times copied the entire court judgment onto its website. Local news websites featured quite a number of stories on the case. An English divorce case became the entertainment news headlines for millions of readers from Park Lane, London, to Parnell, Auckland.

McCartney and Mills’s case captured media attention because the judgment set out intimate details about the parties’ personal lives, their properties, their relationships and their aspirations in life. This case is a clear example of one of the major downsides of taking a dispute to court: you have to air your dirty laundry in public.

A court is an open forum. The public has a right to hear what is said unless there is a really good reason to suppress information, such as domestic violence protection. In most court hearings, anyone can walk into your dispute and be a spectator for his or her own amusement. It’s the best free show in town. Also, a written judgment is a public document. Our legal system uses past case law to help decide current cases, so each judgment forms a part of our laws. Decades after the dust has settled on the court-room floor, vital facts about the parties’ lives still sit on the public record. Many cases are available free on the internet for the foreseeable future.

Looking at commercial disputes, it is not hard to see how airing dirty laundry in litigation can be a big issue. Imagine an extreme case, an intellectual property dispute between a software developer and a webpage host over a sensational new, but unpatented, web application. The dispute means they can’t deploy the software in the market. If the dispute results in going to court, the parties will have to tell the court what this fantastic web application is capable of. A third party could listen in to this, develop software that is equivalent (using parallel engineering to avoid copyright issues) and exploit the commercial opportunity before the court case is over. Both the litigants lose out because they can’t use the development until the court’s decision is available.

Meanwhile… I’m sure you could all think of information about your business that you wouldn’t want to disclose publicly: key clients, pricing data or areas where your firm is vulnerable to competition in the market. Think to yourself: “What if all of this goes horribly wrong, and it ends up in court?” A good technique to avoid such a situation is to consider different methods for resolving disputes. For example, the parties can agree to use a mediator to try and resolve disputes behind closed doors. The best time to deal with this important issue is during negotiation of a contract: before you sign on the dotted line, you have an opportunity to agree on the best methods for working through problems before they arise. Think “We can work it out” before a crisis emerges and you might avoid the need to sing “Help” later on.

Richard Anstice is a staff solicitor in Rae Nield’s office. This article is intended for general information and should not be relied on as specific legal advice. You should consult a lawyer for advice relating to your own specific legal problems. They can be contacted at raenield@marketinglaw.co.nz.


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