When traveling overseas, it is sometimes easy to forget that one has left the United States. You fly in an American airline, are greeted by familiar automobiles and get stuck in similar traffic, your hotel often bears the name of a U.S. chain and everyone speaks English! You can even eat the same food and listen to the same music that you do at home.
As Thomas Friedman described in his book The World is Flat, American brand names can be found in all corners of the world. One thing the United States has not successfully exported, however, is its legal system. Our system of law and our attempts to impose our values in business transactions are often unwelcome and unwanted.
There are several reasons for the frosty welcome extended to the U.S. legal system. In some parts of the world, we are simply disliked for who we are. In places like Japan, the business culture favors and values those seeking to resolve disputes, not those looking for relief in judicial forums. Other countries have cultural and ethical values that are contradictory to, or at least different from those held in the U.S.; they are naturally reluctant to give up these values and accept ours.
Finally, our system is perceived as smug because U.S. courts are perceived as willing to discount or ignore foreign judgments. No doubt, the recent events on Wall Street will also help to undermine the credibility of the U.S. and U.S.-based businesses in the next few years, as has the Bush doctrine and similar policies.
On a more practical level, there are four aspects of the U.S. American legal system that cause our foreign business partners to become anxious and reserved when dealing with us.
Our Contracts Are Intimidating
Because our contracts tend to be lengthy and complex, they are perceived as intimidating and confusing. Long agreements are seen as a sign of distrust, an attempt to overcomplicate the deal, or even trick the other side a view often held by many U.S. American business people!
Many systems of law, especially those in European countries, have codes that regulate the basics of contract and tort law, obviating the need to spell out all relevant points in a contract. As a result, European agreements tend to be shorter and are therefore perceived as less complex and burdensome. For example, in European agreements, limitations on damages provisions and warranty provisions are often not present because local civil law controls these issues. Usually, the only time these issues are addressed is when an exception is made to the rule.
Our System Of Discovery Is Perceived As Invasive
Our style of litigation and, in particular, discovery, is viewed as unduly burdensome and invasive another perception many American business people share! In most countries, each party has the duty and right to bring forth evidence in support of its position, but the finder of fact is (only) the judge: the parties do not have the right to demand information from the other party.
Damages Are Seen As Excessive
U.S. American damage awards are seen as not simply excessive but ridiculous. In many parts of the world, these awards are not recognized or enforced because they violate common sense and propriety. In Germany, for example, it is unlawful to compensate for the death of an individual or loss of consortium.
Attorney Fees Seem Out Of Control
U.S. attorney’s fees are viewed as excessive. These high rates, coupled with the need to draft lengthy contracts and/or the need to conduct lengthy discovery, often create the impression that attorneys are at best a burden and at worst a barrier to trade. Finally, the fact that the party that prevails in litigation must pay its own legal costs (which is usually not the case in many European jurisdictions) does not help to endear the U.S. American attorney to foreign clients.
Be Mindful Of Local Traditions And Customs
Given these perceptions, what is the U.S. attorney to do? First, we must always show respect for the local language, culture and traditions as much as we can without sacrificing our position. Learning a few phrases of the local language, which is often seen as a sign of respect, will help reduce initial tensions.
Also, when negotiating a deal, be mindful of the local traditions and customs regarding the exchange of gifts and try to adhere to them. Russia and Japan, for instance, have a long tradition of exchanging of gifts. A small, token gift is often exchanged during introductions and will go a long way towards breaking the ice (but keep the Foreign Corrupt Practices Act in mind at all times).
Finally, don’t be the “ugly Americans” crass, demanding individuals who put their shoes on the chair, talk loudly on their cell phones and come to a business meeting dressed in business casual attire when everyone else is wearing a suit! Try to adjust to and fit into your surroundings as best as possible.
The most important thing to remember when dealing with our foreign colleagues, especially when overseas, is that we are in their country and they view themselves as guardians and representatives of a legal tradition that is valuable to them. They believe in their system as much as we believe in ours. If we do not respect them, their values and traditions, we will make business more difficult for our clients and eventually for us.
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