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1 – 10 of over 4000Drawing on “Strategic Alliance” literature and qualitative research methods, the purpose of this study is to examine the initiation and operations phases of the relationship…
Abstract
Purpose
Drawing on “Strategic Alliance” literature and qualitative research methods, the purpose of this study is to examine the initiation and operations phases of the relationship between Australian litigation funders and class law firms. The initiation phase examines factors such as complementarity between needs and assets compatibility between the funder and the class law firm goals of the alliance trust and alliance structure. The operations phase considers factors such as governance, communication and risk management and accountability. Because of its focus on the fairness of settlement, case law provides limited understanding of the drivers of the class law firm and funder relationship. An “inside look” of how the funder-law firm is initiated and made operational provides a more accurate picture and has important implications for the management of the ethical issues that arise during the course of that relationship.
Design/methodology/approach
This paper is a content analysis and contains qualitative interviews.
Findings
The strategic alliance between class law firms and litigation funders has evolved within an institutional climate that has acknowledged the benefits that the alliance can bring to the conduct of class actions. That same institutional environment has led to an alliance which is informal and transactionally oriented, where each of the parties maintains a demarcation in function. Although they share aspects of the strategic management of class actions, funders continue to be diligent monitors of class law firms, and class law firms continue to advance the legal rights of class members.
Research limitations/implications
It is observed that the size of the sample is small driven by a number of market participants.
Practical implications
The paper confirms that the litigation funder–law firm strategic alliance works well as a result of institutional constraints.
Social implications
Each of the alliance partners was keen to ensure that neither they nor their partner acted in a way which might attract judicial disapproval. Each also believed that they played a positive role in promoting class member interests, albeit that their primary motivation was to earn fees or a commission. The success of the alliance between class law firms and litigation funders has substantially improved access to justice in Australia for small claims holders.
Originality/value
The paper provides insight into a strategic alliance which is formed primarily for the benefit of third parties. This is one of the first papers to consider the litigation funder–law firm relationship through the lens of strategic alliance literature.
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Peiyuan Huang, Junguang Gao, Wenyuan Cai and Fuzhen Gu
This study aims to use institutional and upper echelons theories to comprehensively investigate the intricate interplay between TMT legal expertise and firms' adaptive strategies…
Abstract
Purpose
This study aims to use institutional and upper echelons theories to comprehensively investigate the intricate interplay between TMT legal expertise and firms' adaptive strategies in legal contexts, notably within emerging economies. It explores how upper echelons experiences shape opportunistic compliance strategies, impacting value and risk perceptions. Drawing on upper echelons theory, the research probes how TMT legal expertise molds firms’ involvement in significant lawsuits, accounting for influential roles. It scrutinizes TMT’s impact on legal strategies, positing that managerial discretion emerges from environmental factors, organizational attributes and executive traits. The study underscores TMT’s internal incentives and external factors’ interplay, molding strategic legal engagement.
Design/methodology/approach
To validate this framework, statistical analysis is performed on data from 2,584 Chinese-listed firms. The data set spans 2010–2015, with 5,713 material lawsuits. Chosen due to reliable institutional-level incentives data from the China Market Index Database, years 2016–2019 are excluded for methodological disparities. Moreover, 2007–2009 is omitted to mitigate the potential financial crisis impact. This study’s 11,272 observations ensure robust empirical exploration, offering insights into the interplay of TMT legal expertise, institutional factors and firms’ legal strategies.
Findings
The study reveals that firms led by executives with legal expertise are more prone to engage in significant lawsuits, indicating strategic use of legal skills. TMT age moderates this, with older teams less likely to engage. TMT tenure’s effect remains unclear due to tenure-risk preference complexity. Institutional factors matter; less legally mature regions reduce managers’ legal risk intention. Results confirm hypotheses and highlight executive human capital’s impact on firms’ legal strategies.
Research limitations/implications
This study acknowledges contributions while highlighting limitations, including the need for detailed distinctions in lawsuit roles and exploration of heterogeneous TMT power dynamics. Further research is proposed for nuanced power dynamics and comprehensive TMT legal background data. The study advances upper echelons theory by introducing TMT legal expertise as a factor influencing strategic lawsuit behavior. It challenges institutional theory by showing the adaptable legal context, beyond fixed constraints. Moderating factors – group risk attitude and external knowledge – deepen understanding of upper echelons’ impact. Enhanced data collection is encouraged to address limitations and refine findings.
Practical implications
This study’s implications extend to managerial practices. Firms should acknowledge the dynamic legal system, using TMT legal expertise for strategic legal challenges. Executives should pragmatically approach regulations. While legal professionals enhance compliance, caution is needed in selecting TMT members with legal expertise due to the risk of misusing it for unnecessary litigation, potentially misaligned with financial performance goals.
Originality/value
This study combines institutional and upper echelons theories to explore TMT legal expertise’s impact on firms’ adaptive strategies in emerging economies. It challenges the idea of a universally constraining legal environment and highlights how TMT legal expertise enhances firms’ management of complex legal risks. The research introduces TMT legal expertise as an influencing factor in strategic lawsuits, revealing nuanced relationships between legal contexts and strategic decisions. The findings enrich upper echelons theory, challenge conventional institutional views and identify moderating factors that deepen the understanding of upper echelons’ influence in legal landscapes.
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Patent litigation consists of non-market actions that firms undertake to access intellectual property rights defined by prior legislation and enforced by the courts. Thus, patent…
Abstract
Patent litigation consists of non-market actions that firms undertake to access intellectual property rights defined by prior legislation and enforced by the courts. Thus, patent litigation provides an interesting context in which to explore aspects of firm’s non-market strategies. In contrast with prior non-market strategy research that has largely focused on how political institutions define the rules of the game for market competition, non-market actions within patent litigation primarily seek to access and apply these broad policies to specific situations, products, or assets that matter to the firm. Furthermore, because such non-market actions are directly influenced by the firms’ market strategies, they represent a promising area for research on integrated (market and non-market) strategies as well.
The goal of this paper is to explain how generic patent strategies that firms use to support their competitive advantage in the product-market influence non-market outcomes related to the timing of patent litigation resolution. In contrast with prior research that has studied settlement in patent litigation essentially as a one-shot bargaining game, this paper seeks to explain litigation resolution as an outcome of the competing mechanisms of settlement and adjudication that operate continually during litigation. Using a large sample of patent litigations in research medicines and computers, I model the timing of patent litigation resolution in a proportional hazards framework, wherein settlement and adjudication are competing risks. The evidence found is consistent with the proposition that the speed with which patent litigation is resolved by either settlement or adjudication reflects the use of proprietary, defensive, and leveraging patent strategies by firms. These findings also help to explain unexpected and anomalous findings regarding the settlement of patent litigation reported in prior research.
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In a country where judicial institutions are known to be inefficient and where activists have traditionally not engaged in legal mobilization, what explains the emergence of NGO…
Abstract
In a country where judicial institutions are known to be inefficient and where activists have traditionally not engaged in legal mobilization, what explains the emergence of NGO strategic litigation? The author argues that a change in the legal opportunity structure impacts how activists interact with the legal system. Comparing two states in Mexico, the author demonstrates that the introduction of private prosecution rights opened the door for activists to litigate femicide cases. The emergence of strategic litigation has helped improve compliance with international human rights law and has had a demonstration effect on how to use the law to press for accountability.
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Ünsal Sığrı and Hakan Karabacak
This paper aims to manage better the conflicts in labor disputes by improving the understanding of mediation dynamics from a game-theoretical perspective.
Abstract
Purpose
This paper aims to manage better the conflicts in labor disputes by improving the understanding of mediation dynamics from a game-theoretical perspective.
Design/methodology/approach
Signaling game model is adapted to a hypothetical labor dispute based on the legislative regulations on the mandatory mediation system in Turkey.
Findings
The paper determines mediation equilibria in which both players get positive payoffs. Analysis of the mediation equilibria helps to improve the understanding about the litigation and mediation dynamics depending on the variables. The variables are clearly separated from each other due to their reverse effects on strategy choices of the parties. Mediation payoff and litigation cost are characterized by their incentive effects on mediation preferences, whereas mediation fee and litigation payoff are characterized by their disincentive effect. While increasing amounts of incentive variables strengthen the mediation tendency of the employee, increasing amounts of disincentive variables reveal the opposite effect. Furthermore, the analysis also indicates that if the litigation payoff is too small to recover litigation costs, accepting the mediation becomes the optimal strategy. This prediction is contrary to that of traditional game-theoretic litigation/settlement models, in which small-claim disputes typically cannot be settled.
Practical implications
The assumption that the mediation fee is not a part of the litigation cost eliminates the disincentive effect of mediation fee and makes it neutral on the strategy choice of employee.
Originality/value
This paper first analyzes the strategic role of mediation in labor disputes by using a signaling game. Despite its mediation focus, the paper also provides practical insights for litigation.
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Atul Nerkar, Srikanth Paruchuri and Mukti Khaire
This paper proposes that patents are real options that allow holders of patents the right but not the obligation to sue others. We suggest that the likelihood of a patent being…
Abstract
This paper proposes that patents are real options that allow holders of patents the right but not the obligation to sue others. We suggest that the likelihood of a patent being litigated is positively associated with value of the patent and the extent of disclosure (prior art cited) in the patent. However, under conditions of greater value, increases in disclosure reduce the likelihood of litigation of the focal patent. Similarly, under conditions of greater disclosure, increases in value reduce the likelihood of litigation of the focal patent. Rare events logit analyses of business method patents that were litigated, compared to patents that were not litigated, offer empirical evidence supporting the hypotheses.
Abdul Waheed, Hamid Mahmood and Jun Wen
The purpose of this research is to investigate how the negative effect of litigation risk on firm performance could be controlled through the channel of voluntary disclosure and…
Abstract
Purpose
The purpose of this research is to investigate how the negative effect of litigation risk on firm performance could be controlled through the channel of voluntary disclosure and under the condition of institutional ownership.
Design/methodology/approach
To get the objectives, the study analyzed an unbalanced panel of 918 non-financial listed Chinese firms from 2010 to 18. To capture any expected unobserved heteroscedasticity and autocorrelation in the unbalanced sample, the authors have applied fixed effect regression with robust standard errors clustered at the firms' levels as suggested by Newey and West (1987).
Findings
The research provides that the good disclosure practices and presence of institutional ownership in corporations raise the trust of the investors by making the corporate operation clear in the eyes of the stakeholders. This increases the corporate credibility and as consequence corporations are protected against litigation risk. Thus, in the light of the information asymmetry and signaling theories, voluntary disclosure practices, and financial institutions' ownership, bridges the information gap and transmit a positive signal in the market regarding the better financial performance of the corporations.
Research limitations/implications
These findings are helpful for the corporate managers for effective strategic decisions, regulatory authorities for policy formulation, and individual investors for developing a diversified investment portfolio.
Originality/value
By applying the mediation and moderation effects, the research enhances the understanding of the underlying causes of the association between a firm's litigation risk and its performance. The current research contributes to the literature, that agency issues which create litigation risk could be settled internally with voluntary disclosure practices and externally with institutional ownership.
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Olivia Giles and Daniel Murphy
This paper aims to explore any potential link between the corporate issue of a Strategic Lawsuit Against Public Participation (SLAPP) with a changed environmental, social and…
Abstract
Purpose
This paper aims to explore any potential link between the corporate issue of a Strategic Lawsuit Against Public Participation (SLAPP) with a changed environmental, social and governance (ESG) reporting focus as part of a complementary communicative legitimation strategy.
Design/methodology/approach
A longitudinal content analysis of the annual reports of three sample Australian corporations was undertaken, measuring changes in ESG disclosure levels and disclosure focus around the time a SLAPP was issued by each sample firm.
Findings
This paper provides support for the contention that both the number of ESG disclosures and the type of ESG disclosures changed after the sample firms issued SLAPPs.
Research limitations/implications
A number of limitations are identified within the paper, including difficulties identifying when SLAPPs are initiated.
Originality/value
To the authors’ knowledge, this is the first investigation of the relationship between SLAPPs and ESG reporting, and this study helps open up a new area of research into how ESG reporting is used by corporations in a strategic manner.
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Introducing the concept of intra-social movement backlash this chapter explores the “legacy phase” of legal action focusing on conflicts and debates within a social movement that…
Abstract
Introducing the concept of intra-social movement backlash this chapter explores the “legacy phase” of legal action focusing on conflicts and debates within a social movement that has mobilized. Using a legal mobilization framework attuned to the recursive relationship between rights, rights-claiming activities, and collective identity, the chapter analyzes the mixed legacies of movement strategic litigation. Empirically, the chapter offers two illustrative case studies of intra-movement backlash in the women's and the disability rights movements in Canada. The findings suggest that while this form of backlash can have negative, disempowering effects, it also offers opportunities to challenge hegemonic structures within a social movement and re-imagine collective identities.
Marcelo J. Alvarado-Vargas and Qi Zou
The purpose of this paper is to examine the effects of the number of lawsuits on firm performance and in-house legal department size. More importantly, this paper also aims to…
Abstract
Purpose
The purpose of this paper is to examine the effects of the number of lawsuits on firm performance and in-house legal department size. More importantly, this paper also aims to explore the interaction effect of in-house legal department size on the aforementioned lawsuit-performance relationship.
Design/methodology/approach
The empirical analyses are performed by using secondary data. Structural equation modeling is employed in order to examine multiple structural relationships between the number of lawsuits, size of in-house legal department, and firm performance.
Findings
Three key findings were generated: number of lawsuits has a significant detrimental effect on firm performance; number of lawsuits is positively associated with size of in-house legal departments; and size of in-house legal departments negatively moderates the relationship between number of lawsuits and firm performance.
Practical implications
The results corroborate the harmfulness of lawsuits. On the one hand, a large number of lawsuits damage the firm’s financial performance directly; on the other hand, more lawsuits lead to enlarged in-house legal departments which further aggravate the negative effects of lawsuits on firm performance. These results suggest that firms should spend more effort in properly managing legal departments.
Originality/value
This paper contributes to the literature by empirically examining the economic impacts of lawsuits on firm performance. Moreover, it also explored the notion that having a large size of in-house legal department does not mitigate, but aggravates the harmfulness of lawsuits on firm performance.
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