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Litigation Trends Annual Survey from Norton Rose Fulbright Released

May 18, 2015

You can download the 11th Ligation Trends Annual Survey from Norton Rose Fulbright here. The survey polled more than 800 corporate counsel representing companies across 26 countries and many industries.

If you'd rather read a few highlights, here you go.

• Class action lawsuits were listed as the top litigation issue by respondents in the US, Canada and Australia. The UK ranked an overall increase in litigation – including frivolous lawsuits – as the top issue.
• A quarter of all respondents reported at least one class or group action against their companies in the preceding 12 months, with survey participants from the US comprising 80 percent of that number. And 71 percent of those who reported a class action had more than one filed against their companies in the previous 12 months.
• US-based respondents also reported a more litigious business environment than their peers, with 55 percent facing more than five lawsuits filed against their companies in the previous 12 months, compared with 23 percent in the UK and 22 percent in Australia. Just 18 percent of US companies reported no lawsuits.
• Regulatory and investigations matters are a focus for in-house counsel, with 39 percent of respondents citing those issues as their top concern. Among companies with revenues of US$1 billion or more, 51 percent indicate they have one or more regulatory proceeding pending against them. Half of respondents indicate their company has retained outside counsel for assistance in a government or regulatory investigation. Across the entire sample, 44 percent of respondents indicate they have had at least one internal investigation requiring assistance of outside counsel in the previous 12 months.
• In general, respondents expect the legal environment to continue to grow in complexity. Overall, 25 percent of respondents anticipate litigation against their companies increasing in the next 12 months, compared with just 14 percent who predict it will decrease. Twenty-two (22) percent increased the number of outside firms on their rosters in the past year. And half of all respondents have spent more time during the last three years addressing regulatory requests or enforcement proceedings.
• Respondents were given a list of more than 20 categories of pending litigation their companies faced over the past 12 months, and asked to select the top three to five. Contracts, labor/employment and regulatory/investigations received the most selections from respondents, followed by personal injury and IP/patents.
• Just over 50 percent of the survey’s respondents are from companies with headquarters in the United States. The average US company polled has 20 in-house lawyers to handle disputes.
• The number of US companies with an annual litigation spend of US$1 million or more rose significantly between 2012 and 2014. The share of companies with legal budgets of more than US$1 million increased to 69 percent from 52 percent in 2012. A total of 34 percent reported budgets of US$1 million to US$5 million, up from 26 percent two years ago.
• Respondents also reported an increase in the percentage of US companies with litigation budgets of US$10 million or more (25 percent, compared with 17 percent in 2012). Respondents with budgets of less than US$500,000 fell to 21 percent of the total, down from 31 percent in 2012.
• Respondents identified a number of significant differences in the types of litigation that US companies face compared with their peers worldwide. For example, personal injury litigation is significantly more prevalent in the US than in other countries, with 21 percent of respondents selecting it as one of the most numerous types of cases they faced in the previous 12 months. That compares to just 15 percent in the survey overall.
• The US reported the greatest incidence of one or more regulatory proceedings commenced against respondent companies (43 percent). This proportion has remained steady during the past three years.
• Sixty-two (62) percent of US companies used alternative fee arrangements (AFAs) in the previous 12 months, consistent with 2013 findings and slightly higher than the 56 percent worldwide using AFAs.
• Overall, the most common type of AFA used was fixed fee (66 percent). In the US, use of performance/rewards-based fees (25 percent) fell compared with last year (35 percent). And capped fees were less common in the US (51 percent) compared with the total sample (59 percent).

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