The US and UK financial and legal landscapes have undergone quite considerable changes this past decade, asking that law firms adapt if they are to adequately serve an ever-evolving and increasingly demanding client base. Gregory Joseph, Managing Partner in New York at Joseph Hage Aaronson and one of the US’ most-respected litigators, points to market changes dating back to the early 21st century, which he believes transformed the face of litigation and sparked a decade-long shift in the practice of law.
New York and London-based Joseph Hage Aaronson was established as recently as September this year, though despite its age the firm boasts an eclectic range of experienced legal professionals and a proven capacity to handle the gamut of complex financial and commercial litigation. Composed of New York-based disputes firm Gregory Joseph and London-based litigation boutique Hage Aaronson, the newly formed practice looks to settle disputes on an international basis and capitalise on exciting new legal opportunities wherever possible.
[T]he newly formed practice looks to settle disputes on an international basis and capitalise on exciting new legal opportunities wherever possible
Speaking on the ways in which his own practice has evolved since 2001, Joseph is pragmatic about developments. “We’ve been asked to represent more law firms and that has become a significant part of the practice, whereas around 2000 or so, that was a much smaller custom. That, I think, is a function of the market for plaintiff lawyers in particular – focusing on law firms as targets. The irony is that a law firm as acting as a litigant – as opposed to an advocate – sits uncomfortably, whereas accounting firms are litigation machines.”
Two heavyweights collide
Joseph told World Finance that one of the biggest changes of recent years is that the number of securities class actions has diminished significantly from where it was at the turn of the century. Believing this to be the beginning of what later emerged as a fundamental change in the practice of law, Joseph recognises the processes that have brought this about. “The practice has been largely decimated by the US Supreme Court in a series of rulings, which are very favourable to the defendant and make it very difficult for a plaintiff to prevail – so they bring fewer suits.” While a shift in the practice of law stems as far back as the beginning of the century, it was in the wake of the credit crunch and the subsequent financial crisis that practitioners such as Joseph were forced to change their services almost beyond recognition.
“Things started changing when the credit crunch hit – in particular in 2007 – and a large number of financial cases started arising that were not securities, but complicated contractual and derivatives based transactions,” says Joseph. “Originally, that had to do with a series of multi-billion dollar leveraged loans that were outstanding at the time the credit crisis hit, consummating in what would later be extremely costly to major financial institutions and give rise to a series of cases.
“When 2008 hit and CDOs [collateralised debt obligations] collapsed, that gave rise to a lot of litigations. One of which we’ve started on just this year, which is a dispute that arises out of the financial meltdown of 2008 between Citibank and Barclays.”
Joseph is no stranger to disputes involving leading financial institutions, having, in 2011, represented Citigroup in a $268m case against Morgan Stanley relating to the contentious issue of credit default swaps.
A company reborn
The new firm has focus and stability. “The practice we have here is primarily concerned with complicated financial litigations and representing major law firms when they are under attack. The latter often – and perhaps almost always – ties to the former; it is the connection with work and financial transactions or representations that gives rise to the claim against the law firm.”
The merger enables both Hage Aaronson and Gregory Joseph access to new markets in the US and European continents, which is especially important when seeking high-value dispute cases of the highest pedigree. When asked if the firm has any intentions to enter any other marketplace, Joseph states that this may well be premature given the age of the firm, adding that the intention for now is to focus on London and New York in particular. “I think having the interaction with the US and UK is crucial. We have top quality people in the UK that we can consult, one example being that we have a dispute between two major financial institutions, which is currently being litigated in New York under English Law.”
The merger enables both Hage Aaronson and Gregory Joseph access to new markets in the US and European continents, which is especially important when seeking high-value dispute cases of the highest pedigree
The establishment of Joseph Hage Aaronson is one rooted to the relationships shared between a select few individuals, with Joseph having worked with litigation advisor Joe Hage and former head of Chambers Tom Beasley on a number of occasions. “These are good friends, on a personal level, apart from working together. When Joe decided to start the firm and Tom decided to take the significant step of leaving Chambers and moving to a law firm, the time to form a firm of our own felt right,” says Joseph.
“We want to work together on international projects. The truth is that we’re very busy in our domestic practices but we’d like to work together and we’d like to work on international litigations and arbitrations, and that’s what we’re looking to focus on. All we care about are interesting cases, the new firm won’t really be changing the US and UK firms and the whole point of the merger is just to come up with some additional kinds of interesting cases, because we both have plenty to do right now. On the most basic of levels, international arbitration and transnational litigations sound compelling and are something we’d like to work on together.”
Arbitration issues
Speaking to World Finance on the business of arbitration, Joseph says that it is flawed in a number of ways, and suggests solutions to what he feels are components of a broken system. “There is a need to have arbitrators act like judges and not like mediators. I think that one tends to find that in the US it is hit or miss and I do think it is a flaw of the arbitration process to the extent that parties that want to have issues decided on merit end up having them resolved in a Solomonic fashion, which is not really what they want.
“You can pick out first-rate arbitrators, you can agree on rules, you can try your case the way you would a regular lawsuit, and yet you harbour a lingering uncertainty about whether the ultimate result will resemble a courtroom determination – an up-or-down, win or lose, on the merits of determination. There are many reasons for that, I suppose, but one that hovers over all the rest is that there is no meaningful judicial review of arbitral decisions. The arbitrators don’t have to look over their shoulders at what a reviewing court will have to say about what they do. With rare exception, whatever the arbitrator decides, whether sound or peculiar or noxious, must be judicially confirmed.”
The solution proposed by Gregory is that parties are allowed to secure a judicial review of an arbitration award if they elect to do so, a measure that is currently precluded in the US. While Joseph acknowledges that the need for this provision may well be unnecessary on an international basis, he says that it is certainly necessary for cases in the US. “This largely removes the sobering virtue of self-consciousness from the arbitral decision-making process,” he says.
A further issue highlighted by Joseph is that those who draft contractual arbitration agreements are generally not litigators and are not really capable of the task at hand. “While they’re extraordinarily sophisticated draftsmen, they don’t know the complicated legal issues that arise in the business of arbitration.”
On reflection, however, the changes to the legal system of late can be considered relatively minor, provided that those participating in legal proceedings are learned in the developments of this past decade and show an understanding of the ways in which current processes can be improved upon. The creation of Joseph Hage Aaronson is testament to the demand for high quality service, and it is firms such as these that will no doubt pave the way for future improvements to the legal system.
