Trial lawyers can feel a bit strange within a bankruptcy court due to all the terms, procedures, practices and timings that differ widely from the traditional civil litigation. In order to get a hold of these types of courts lawyers must first truly understand the Bankruptcy Code and Federal Rules of Bankruptcy Procedure, and it doesn’t end there. Reading and knowing the written rules is not enough and to be a successful court lawyer within bankruptcy courts is a whole different game and he or she must know all the differences between bankruptcy litigation and traditional civil litigation. Let’s take a look at some of those differences.
Don’t miss the big picture.
Within Traditional civil litigation, the lawyer can relate the case to the client´s needs and personal goals for a better understanding, and there is only one court proceeding to handle. But it is totally the opposite in bankruptcy litigation. It doesn’t matter who your client is (the debtor, a creditor or another interested party) the lawyer must juggle two separate cases: the litigation and the underlying bankruptcy case, and in turn understand both and how they perfectly relate. If the lawyers fail to do this, the consequences could be a decision that hurts the client’s interests and the litigation.
Take this example; a lawyer represents a defendant in a fraudulent transfer case who is also a creditor of the debtor. Does the lawyer want a quick trial to receive a favorable ruling? Or does the lawyer want negotiate a settlement? Either way, the lawyer needs to be informed of both cases before reaching a conclusion.
Bankruptcy litigation generally proceeds to trial more quickly than traditional civil litigation which takes from filing to trial in average 25.3 months. The statistics are not clear for bankruptcy courts, but experience tells us that it is a lot faster.
For example, in the case that Baker Botts filed in the Bankruptcy Court for the Southern District of Texas, the case was tried 16 months later. Speed is important for the lawyer as they can plan for the pace that bankruptcy litigation has and be prepared when the stages of discovery and trial come.
Understand the Audience
In a civil court, a lawyer knows the difference between handling the trial in front of a judge or a jury. Jury trials and bench trials have benefits of their own, but there is one big difference in bench trials when it comes to bankruptcy litigation: The judge that presides over the adversary proceeding or contested matter is the same that presides over the bankruptcy case. What is the overall consequence of this? Well, the bankruptcy judge will analyze the litigation as part of a bigger game, as a piece of a larger puzzle, and the judge´s decisions will directly affect the bankruptcy case because he or she will be managing a litigation that is with adversaries by nature and will also be managing the bankruptcy case with all its negotiations and consensual resolution of disputes.
Application of the Rules of Evidence
The Federal Rules of Evidence apply for all the cases, including bankruptcy. The thing is that bankruptcy judges are not very strict to apply these rules because they do not worry about inadmissible evidence. These rules of evidence affect the trial and the lawyer should know whether and how to object to evidence offered by the other party.
The Proffer Process
A proffer is an offer of evidence in support of an argument, it is an offer made before any negotiation starts. A lot of bankruptcy judges want the witnesses to present a written proffer rather than a live one in order to save time and effort to the court and the lawyers. This changes everything in big ways. For example, the judge may read the witnesses´ proffers very quickly so they can advance to the real trial or the judge may be looking for just the context and not the whole explanation.
On the other hand, the proffer can be very useful as there is no time to prepare the witness for cross-examination so the witness can refer to his or her proffer.
Lawyers should keep in mind that in bankruptcy courts judges do not pay attention to redirect examination. Here is where they lawyer has to be very professional and clever in order to write every little detail and fact in the proffer so it can be used to prove the case and to have a very successful appeal. On the other hand, proffers make it easy for lawyers when it comes to cross-examining the other side’s witnesses because they already know what the direct testimony will be.
There are many other differences that lawyers should be aware of, but here are just a few so they are not caught out of the base.
Be sure to also read this post about the chapters in bankruptcy litigation
* Featured Image courtesy of George Self at Flickr.com