Corporate lawyers are projecting a big year of litigation next year, reports the law firm of Fulbright & Jaworski, LLP.
According to Fulbright’s 6th Annual Litigation Trends Survey of corporate law departments in the U.S. and U.K., 42 percent of U.S. respondents anticipate an increase in legal disputes their companies will face in the next 12 months, up from 34 percent of last year’s respondents. According to the survey, 83 percent of U.S. respondents reported that new litigation has been commenced against their companies in the past year, up from 79 percent last year.
“Generally, litigation rises in an economic downturn as regulators tend to step up enforcement, laid-off workers head to court and companies need to file more suits in order to collect on money owed,” says Stephen C. Dillard, head of Fulbright’s global litigation practice. “Perhaps most telling about this year’s results is that companies across the spectrum expect no substantial decreases in any area of litigation.”
Litigation costs are on the rise, according to the survey: 53 percent of all respondents say their annual litigation cost (excluding cost of settlement) exceeds $1 million, an increase from last year, in which 43 percent of companies said their annual litigation cost exceeded the $1 million mark. Nearly one-third of healthcare companies in the survey broke the $10 million mark, the law firm reports. The survey respondents say that increases in the litigation budget will go primarily toward bankruptcy litigation, e-discovery, labor/employment, regulatory and contracts cases.
The law firm says a “surprisingly large portion” of respondents (21 percent) say their companies have been subjected to whistleblower allegations in the past three years, with whistleblowers “particularly prominent in healthcare.”
The firm observes that employment litigation rises with the jobless rate: “As the economy dips and unemployment spikes, the jobless sue their former employers in greater numbers. For the second straight year, survey respondents report sizeable increases in multi-plaintiff cases in the area of wage and hour disputes (FLSA) (up 15 percent), age discrimination cases (up 11 percent) and disability discrimination (up 8 percent). Corporate counsel also report increases, during the past 12 months, in race discrimination cases (up 10 percent), sex discrimination cases (up 11 percent), religious discrimination cases (up 4 percent) and ERISA cases (up 4 percent).”
Wage and hour disputes remain the primary concern when it comes to multi-plaintiff cases, the law firm says. The area of labor/employment law seeing the biggest jump: “Nearly 40 percent of respondents point to wage and hour, with misclassification, overtime and meal and rest break claims accounting collectively for the vast majority of wage and hour cases, and with minimum wage cases accounting for the remaining 6 percent. The wage and hour case trend started several years ago when plaintiffs lawyers discovered that state and federal law in this area provided the basis for recovery of small amounts per employee for events or practices covering hundreds of workers, but in addition to attorneys’ fees, and in some cases double damages. In the past year, discrimination cases have seen the greatest jump as employees lose job security or the jobs themselves,” according to Fulbright.
