The greentech industry is recognized as one of the key subsectors of the ESG investment world. Energy transition to renewables is the new industrial revolution. It is a global win-win-win for bolstered economic strength, new business opportunities, and improved quality of life for people all around the world. The $369 billion Inflation Reduction Act pushed the US into a new era of climate and energy policy for public – private cooperation into renewables transition.
The burgeoning growth of the greentech industry, has resulted in increased civil litigation cases. This article provides advice on how to reduce risk and increase the odds of success in dispute matters.
Tip # 1: Hire experienced expert witnesses
Importance of Expert Witnesses
Expert financial opinions in ESG litigation is growing due to the complex nature of assessing damages, compliance costs, and long-term financial projections related to environmental issues. Financial experts provide critical insights into the economic implications of various litigation cases. This assists courts and juries in determining damage awards. It is also very helpful in parties coming to a settlement instead of going through long protracted litigation with uncertain outcomes.
Civil Litigation Economic Damages
Economic damages can be in several forms, including but not limited, to the following:
- Lost profits to plaintiffs – the foregone income that would have been earned but-for the actions of the defendants
- Disgorged profits from defendants – the income the defendant unlawfully made as a result of its damaging actions to the plaintiff
- Lost business value – the reduction in the company's equity value caused by plaintiff's actions
- Reasonable royalties on misappropriated intellectual property ("IP"). The value of plaintiff's IP and loss thereon due to improper use by defendant.
- Cost to create IP – an alternative measure of damages in misappropriation of IP litigation
- Forensic economic and accounting analyses – includes the measurement of costs to mitigate and cure damages
Types of Litigation
In the greentech industry, several types of civil litigation claims can occur, highlighting the growing importance of expert financial opinions in environmental litigation:
- Greenwashing Claims: Companies face lawsuits for allegedly making false or misleading statements about their environmental impact or product sustainability. These cases often require financial expertise to quantify damages and assess the economic benefits gained through misleading claims. Typically, these benefits are measured by disgorged profits of defendants.
- IP Misappropriation Litigation: Lawsuits between competitors wherein plaintiff claims unauthorized use of IP by defendant. Damages come in several forms including plaintiff's lost profits, defendant's disgorged profits and reasonable royalties on plaintiff's IP.
- Regulatory Compliance Litigation: As new ESG regulations are implemented, companies may face lawsuits for alleged non-compliance. Financial experts are essential in evaluating the economic impact of these regulations and potential penalties.
- Investor Litigation: Shareholders may file lawsuits alleging that a company's ESG-related fraudulent disclosures or negligent practices have led to financial losses. Financial expertise is crucial in quantifying these damages typically in the form of lost profits and lost business value.
- Fiduciary Duty Claims: Lawsuits alleging breach of fiduciary duty related to ESG considerations, such as pension fund management decisions. Financial expertise is needed to evaluate the financial implications of ESG-related decisions.
- Product Liability Claims: In the greentech industry, these claims may relate to the safety or efficacy of new green technologies or products. Financial experts can help assess damages and potential market impacts.
Tip # 2: Consider mediation to settle the dispute out of court and save significant time and money
Mediation is the process in which parties to a dispute meet with a mediator to attempt to settle the matter out of court. The mediator is usually a retired judge with decades of courtroom experience. The length of mediation is usually one day however it can span several days and occur in numerous meetings for several months.
Depending on the intensity of litigation and emotional state of the parties, the mediator may meet with the parties individually or meet with all parties simultaneously as well as individually. The mediator will flush the goals of each of the parties and inform them of their risks should they go to trial. The process, if it is successful, usually consists of several rounds of back and forth meetings with each of the parties in which the mediator gets each party to back off from their initial position and eventually come to settlement terms.
A successful mediation settlement allows the parties to save significant time and money by avoiding trial preparation and court proceedings. It also removes the risk that either party may face from a trial verdict.
Tip # 3: Retain trial consultants who can assess probable outcomes of trial verdicts
There are many types of trial consultants who are very helpful in navigating disputes. The following are a few of the more commonly retained consultants.
- Trial verdict consultants. These consultants will conduct mock juries and assess the past rulings of the judge on other cases. This provides their client with a profile of probable outcomes of trial verdicts. This informs the client's decision to go to trial or attempt to settle the matter out of court.
- Shadow experts. These are expert witness professionals hired as consultants but not designated as the expert witness in the case. The shadow experts can assist the designated experts with their work, analyses, and report. They can also independently come up with their opinions to compare with those of the designated experts. Shadow experts can also provide support to attorneys with the cross examination of opposing designated experts.
- Trial chart and exhibit specialists. These specialists create charts combining headlines and visuals to provide persuasive information to juries. The charts simplify complex evidence and analyses for jurors to more easily understand relevant information on which to base their verdict
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
