The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Investors and commercial litigants have effectively been warned that it will take at least two years, and possibly as many as four, to obtain trial dates in the Bahamas for complex and keenly-contested disputes.

The “significant backlog” in the Bahamian commercial/civil judicial system has been exposed to the world by attorneys acting for hedge fund billionaire, Louis Bacon, in his ongoing New York legal battle with Lyford Cay neighbour, Peter Nygard.

Robert Adams, the Graham Thompson & Co attorney and partner, warned that “substantial delays” in processing cases to trial were “regrettably not uncommon” in the Bahamian judicial system - even for seemingly simple matters.

Mr Adams, who represents Mr Bacon’s interests locally, explained in a May 9 affidavit why these delays meant that New York, rather than the Bahamas, was the better jurisdiction for hearing his client’s $50 million defamation claim against Mr Nygard.

He predicted that if Mr Bacon was forced to refile that action in the Bahamas, he would not obtain a trial date until the 2018 first quarter “at the very earliest” - some two years out.

And, given the numerous preliminary actions that will likely spin off from such an action, based on its history, Mr Adams forecast that it was “highly likely” any trial would be delayed for a further year or two beyond 2018.

That would put any trial date back to 2020 or beyond, some four years after any action would have been refiled in the Bahamas.

Mr Adams’ affidavit, filed with the New York State Supreme Court, sends a potentially chilling message to international investors eyeing the Bahamas.

The swift, impartial resolution of commercial disputes is among the key attributes they will look for when assessing where to invest their capital, and a possible two to four-year wait for trial of complex matters is not what they are looking for.

With the Bahamas facing ever-increasing competition for foreign direct investment (FDI) dollars, resolving the backlog/delays in the civil and commercial courts is another aspect critical to improving the ‘ease of doing business’ in this nation.

Mr Adams’ affidavit also backs efforts to develop alternative dispute resolution (ADR) mechanisms, which would enable cases involving Bahamian and foreign investors to be resolved without having to go through the already-clogged legal system.

There is little reason to doubt Mr Adams’ estimates, given his experience as an attorney, and position as chairman of Graham, Thompson & Co’s litigation and dispute resolution practice.

He illustrated his estimates by pointing to the lengthy delays incurred in the numerous defamation actions he has launched in the Bahamas on Mr Bacon’s behalf.

Arguing that the Bahamian cases “raise no novel issues of law”, Mr Adams said only one had been given a “tentative trial start date”. That date was January 23, 2017, some “four-and-a-half years” after the action was first filed.

As for the remainder, three cases had yet to be scheduled for trial, despite having been waiting date for between one to two-and-a-half years.

And an application for default judgment in Mr Bacon’s final Bahamas-based defamation case had been waiting eight months for a hearing.

“Substantial delays in the resolution of civil claims litigated in the Bahamas are regrettably not uncommon,” Mr Adams alleged in his affidavit.

“Indeed, such delays are a foreseeable product of the significant backlog that currently exists in the Bahamian civil judicial system.”

Given that Mr Bacon’s New York action was far more wide-ranging and complex than those filed in the Bahamas, Mr Adams warned that “delays are even more likely to occur in this case if is refiled [here]”.

“Based on my extensive experience as a counsel and attorney frequently appearing as an advocate before the Bahamas Supreme Court, it is my opinion that if he were forced to refile his claims against the Nygard defendants in the Bahamas today, Mr Bacon would likely not receive a trial date until the last quarter of 2016,” Mr Adams predicted, “and would likely not proceed to trial until the first quarter of 2018, at the very earliest.

“Further, given the multitude of interlocutory applications and appeals that are likely to be associated with the conduct of these hotly contested proceedings, in reality, it is highly likely that trial of Mr Bacon’s claims would be delayed for another year or two beyond the first quarter of 2018.

“Moreover, such further delay would only be exacerbated if strategic delay tactics are employed by the Nygard defendants.”

Mr Nygard and his attorneys are arguing that the New York defamation action against him should be dismissed, on the grounds that the Bahamas is the proper venue to hear such a complaint.

They allege that the events complained of all took place in the Bahamas, with the “vast majority” of witnesses and documentary evidence all located in this nation.

To rebut this contention, Mr Bacon’s legal team has also enlisted help from retired Bahamian Supreme Court Justice, Hugh Small.

Justice Small, in a May 7, 2016, affidavit said he had “identified several key procedural obstacles, requirements and limitations that bear directly on the question of whether the Bahamian judicial system is an adequate alternative forum for this particular litigation”.

His affidavit, filed with the New York State Supreme Court, said these issues had not been addressed by Mr Nygard and his companies in filing for the $50 million claim’s dismissal.

Justice Small said there were “ramifications that these [Bahamian] limitations would impose on Mr Bacon if he were compelled” to re-domicile the case to this nation.

In particular, he alleged that the Bahamian judicial system “offers Mr Bacon substantially less robust discovery than he currently enjoys in New York”.

Justice Small said there were no mechanisms in Bahamian statute or common law for obtaining pre-trial witness statements from the parties involved in the case, or even non-parties or expert witnesses.

This applied even to Bahamian citizens and residents, with the ex-Supreme Court justice acknowledging that depositions “can be a fruitful avenue of discovery” - especially in cases where parties were seeking to conceal evidence.

“It is therefore my expert opinion that in a Bahamian civil lawsuit, Mr Bacon’s ability to obtain important pre-trial oral deposition testimony and/or to challenge trial testimony that might be provided by the Nygård defendants or percipient or expert witnesses, would be severely compromised, as compared to his ability to achieve these ends in a New York civil lawsuit,” Justice Small alleged.

“This opinion also comports with my own personal experiences serving on the Bahamian bench, and practicing as an attorney before Bahamian courts.”

Justice Small also warned that Bahamian courts were unable to compel witnesses and parties outside this nation to provide written or documentary discovery evidence.

He suggested this would be significant in the context of the Bacon/Nygard dispute, given that key witnesses were residing in North America.

“It is therefore my expert opinion that in a Bahamian civil lawsuit, Mr Bacon’s ability to obtain crucial written and/or documentary discovery from non-Bahamian witnesses would be non-existent unless those witnesses chose to co-operate and voluntarily provided the written or documentary evidence in their possession,” Justice Small alleged.

“This opinion also comports with my own personal experiences serving on the Bahamian bench, and practicing as an attorney before Bahamian courts.”

Unlike the US, Justice Small said there was no constitutional right to a jury trial in the Bahamas. He added that no Bahamian judge had ordered a jury trial in a civil defamation case within the past decade.

And Mr Bacon would also be unable to recover “punitive damages” in the Bahamas, as opposed to New York, even if he were to prevail.

“ Based on my review of governing Bahamian case law, it is my expert opinion that Bahamian law does not presently permit a prevailing defamation claimant to recover punitive damages,” Justice Small alleged.

“Bahamian courts are guided by the principle that libel damages are only intended to compensate the victim, rather than punish the perpetrator.

“Accordingly, damages awards in Bahamian defamation suits are always calculated on a strictly compensatory basis.”

The Nygard motion challenging New York as the best forum to hear the case was filed some 15 months after the two sides began litigating.

As a result, Mr Bacon’s US attorneys are arguing that the motion’s timing is “no coincidence”.

“Recognising that a trial on the merits is inevitable, defendants are doing everything possible to postpone judgment day,” the alleged.

“Defendants’ months-long effort to delay document production was put to an end when this court ordered them to produce documents no later than May 30, 2016.

“Now, with their feet held to the fire, defendants raise for the first time the ‘inconvenience’ of this New York forum - in which they have been actively litigating for 15 months— - in support of their wildly belated, and accordingly, waived, motion to dismiss under the doctrine of forum non conveniens.”