America vs. The Rest of the World?

A recent study by Indiana University, reported in yesterday’s Financial Times, concluded that in litigation between US and non-US companies, the non-US companies are more likely to lose, and likely to suffer bigger damages awards, than their American counterparts.

These findings are hardly surprising. Given that native companies will be more familiar with the legal system and have better access to high quality legal resources, we would expect them to come out better in a challenge from an overseas company. What is surprising is the degree of advantage that US companies seem to have, given that theirs is a Western legal system supposedly free of bias.

Some of our clients deal with companies in the Middle East, Asia and Eastern Europe, where they have concerns about the effectiveness and enforceability of contracts.

Now it seems as though the largest economy in the Western world must be added to the list of countries where a fair hearing for overseas companies cannot be guaranteed.