Is nasty litigation par for the course?
Wed 28 Jan 2015
As the trial of the court action between Rory McIlroy and Horizon Sports Management looms, the golfer talks about the process of litigation and the toll it has taken on him.
Reflecting on a dispute that has lasted almost two years, the trial of which will start in Dublin’s Commercial Court next week, McIlroy shares thoughts that are common amongst litigants and the directors, officers and witnesses in litigation: He says it is “not something that I would want anyone to go through”. “It’s a very sort of tedious and nasty process at times”.
I have to acknowledge that litigation has a bad press. As do litigators. Frank McKinney Hubbard, an American cartoonist, described litigation as “a form of hell whereby money is transferred from the pockets of the proletariat to that of lawyers”. It is expensive (and destined to become more so if the current government’s ill-informed proposals to increase court fees continue unabated). I always advise clients that the litigation they are about to embark upon will be expensive, but where there are important principles at stake, the imperfect system usually achieves a just outcome for the wronged party.
The dispute between McIlroy and Horizon is the kind of dispute that often ends in litigation. The basic facts are that in 2011, McIlroy signed a representation agreement with Horizon, under which Horizon would be entitled to 20% of McIlroy’s off-the-course income (endorsement deals) and 5% of his tournament winnings. It would add up to multi-million pound sums for Horizon.
McIlroy then established his own management company and sued Horizon entities, seeking rescission of the agreement or a declaration that it was void for breach of fiduciary duty. He claims that the agreement is ‘unconscionable’, he was subjected to undue influence and the commission fees due to Horizon are much greater than the industry standard. He claims repayment of sums which Horizon received under the agreement. Horizon counter-claims, alleging breach of contract by McIlroy, and seeks substantial damages.
So far, so usual in the course of litigation.
What potentially makes this litigation unusual is that Rory McIlroy is attempting to prepare for a trial of some weeks whilst playing at the Omega Dubai Desert Classic.
However, even that is not as unusual as it might appear at first blush. No-one is in the business of litigation, except the litigators. Litigators conduct the business of litigation, day in, day out. Their clients, however – the companies and individuals who pay the bills – have other businesses. They are running manufacturing facilities, employing hundreds of people, receiving orders and getting products ready for delivery to their customers. They are turning over millions of pounds per annum and paying taxes. To give just one example. Yet, when their business is embroiled in a dispute, they have to juggle the running of their business (the playing golf bit of McIlroy’s life) while giving instructions, receiving advice, ensuring the preservation of documents (an issue McIlroy knows only too well, now), providing witness evidence, understanding the often complex legal issues surrounding the events that have given rise to the claim and preparing for trial. The distraction that this represents from running a business can be significant and should not be under-estimated.
However, minimising that distraction is something which is very much at the forefront of my mind, as a litigator. McIlroy suggests that he has been able to get on with his business of golf despite the litigation. He says, “I am lucky. I have a great team around me now who filter a lot of it for me. They are taking a lot of the burden away from me so I only have to look at the bare minimum...”. The importance of having a team that understands that their client has competing demands cannot be understated.
Having an client who engages in the detail, and understands the issues, factual and legal, is a bonus for any litigator. Getting the balance right can be difficult to achieve. As McIlroy prepares to start his “homework” on the court case after Dubai, he will be hoping that his engagement in the case in the last couple of years stands him in good stead.
As he looks forward to putting the “nasty” litigation behind him, regardless of its outcome, I pause to wonder if it is inevitable that litigation will be nasty. In my experience, it is far from inevitable. Having strongly divergent positions on the facts and the law may result in hotly contested claims, but most litigators understand that being nasty doesn’t win a case.
Marie-Louise King, Partner at Winckworth Sherwood Solicitors
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