Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Both for-profit businesses (multinational or a family business) and not for profit organizations (charitable, universities, NGO's) are increasingly confronted with ethical and soft law issues

Both for-profit businesses (multinational or a family business) and not for profit organizations (charitable, universities, NGO's) are increasingly confronted with ethical and "soft law" issues ("soft law" being not clearly legally binding obligations whichnonetheless may become "hard" legally binding on organizations -such as company "Codes of Conduct"). Dealing with these issues may be difficult as the organizations may be "caught in the middle" between legitimate objectives (growth, profit, employee and shareholder welfare, NGO's publicity...) and the risk of legal liability, loss of commercial reputation, demoralization of employees. The issues are wide-ranging and include environmental protection, corruption, humanitarian and human rights and privacy.

Using examples (for instance, Alstom and Alstom/Veolia, Texaco-Chevron)the subject of assigned readings and class discussion and other sources if you desire (eg. Volkswagen, Siemens, Google, Total (Myammar, Mozambique, Holcim-Lafarge in Syria...) discuss the legal and managerial context of the need to deal with the interplay of ethics, soft and hard law in international business.

Attached is a small brief of LAW of the Jungle (CHEVRON CASE) that you could use in your writing.

Thank you for providing the most authentic possible responses, not copy pastes from the internet please. Thank you!

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed
Intro : Recently, there has been much debate on third-party nancing of litigation and its potential for improving access to justice for victims in class action suits, This goal, however, remains the reserve of individual investors who choose what cases they invest in, which determines which parties get access to justice. As litigation is a costly and time-consuming affair, third-party nancing of litigation eliminates the cost factor, thereby facilitating access to justice to plaintiffs with meagre means. Furthermore, third-party nancing of litigation mitigates the distortions that arise as a result of imbalances in risk preferences. It should be noted, however, that for nanciers of third-party lawsuits, the ultimate goal is maximizing return on investment as opposed to improving access to justice. It just so happens that access to justice is a positive side effect of the practice. Consequently, third-party nanciers often invest in cases that diverge from improving access to justice, There is limited information on thirdparty nancing in the United States. The most prominent case is that of the class action led against Chevron for environmean damage caused by its operations in Ecuador. In 1993, Ecuadorian residents residing in the Amazon led a putative class action suit in the New York Southern District federal court[ CITATION Aqu96 \\l 1033 ]. They were represented by Steven Donzinger, a lawyer who was out to prove himself having previously worked as a public defender. However, all his efforts yielded no results as the suit was dismissed after nine years of litigation for forum non convenient. Nonetheless, a new suit based on similar factual allegations was led in Ecuador two years later that included some representatives of the original suit. The proceedings included civil and criminal litigation as well as arbitration proceedings[ CITATION Agu02 \\l 1033 ]. The provincial Ecuadorian court made an award against Chevron for $18 billion, which was upheld and halved by the Ecuadorian appellate court. However, Chevron sought preemptive injunctions in American courts against enforcement of Ecuadorian litigation award alleging fraud. We will therefore proceed to provide an indepth analysis of the ethical issues of third- party nancing of US litigation based on the book 'Law of the Jungle\". Conclusion Legal scholars advise caution before wide spread adoption of thirdparty nancing of class action lawsuits by courts. It may facilitate access to justice but in so doing, further deprives claimants of class action lawsuits any real role to play in the case[ CITATION ApplO \\| 1033 ]. The second reason to be weary of third-party nancing in litigation is that it eats into the diminutive award obtained by plaintiffs in successful class action suits. Investors are paid off immediately the award is made leaving a small percentage for the claimants of the class action. In some cases, it might not be enough to remedy the harm the class action was meant to resolve. Thirdparty nancing also exacerbates ethical issues in class actions. Before a lawsuit nancing agreement is entered into by the representative plaintiff, it is impossible to receive the consent of all the potential members of the class action suit, thereby reducing the transparency involved[ CITATION Ste12 \\l 1033 ]. In the case of Ecuador and the Chevron corporation, it was only during discovery that the third-party nanciers were unmasked after the law rm spearheading the case removed itself as the risks became exceedingly high. Once the American courts ruled that the Ecuadorian proceedings had fraudulent aspects, the third party investors swooped in. In this case, the third-party investors had priority over the plaintiffs once the award was made, casting doubt on the ethical practices that went into formulating the nancing agreement. It is also unclear whether the plaintiffs knew the implications of the nancing agreement and is subject to arbitration at the Hague. It is therefore important for any jurisdiction to be aware of the risks associated with third-party nancing of litigation before they incentivize the practice. State legislatures should ensure strong consumer protection policies are in place like truthin-lending to prevent the proliferation of predatory lenders and the explosion of abusive lawsuits. Taking effective measures early on will ensure that the practice yields more benets to the American justice system. References Appelbaum, B. (2010). Investors put money on lawsuits to get payouts. The New York Times. Steinitz, M. (2012). The litigation finance contract. Wm. & Mary L. Rev., 54., 455

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Entrepreneurship

Authors: Andrew Zacharakis, William D Bygrave

5th Edition

1119563097, 9781119563099

More Books

Students also viewed these Law questions