Key Findings in the Fulbright U.S. Corporate Litigation Trends Survey

Top Five Litigation Concerns
In-house counsel were asked to rank their top five areas of litigation exposure. The number one concern was labor and employment, with 62 percent identifying it as the chief cause of action. Retailers especially fear employment suits — 76 percent said it was their top concern. The number two concern was contract disputes (58 percent), followed by intellectual property, product liability and class action lawsuits.

Skewed by Industry
The rankings were definitely skewed by industry. For instance, 77 percent of counsel at technology companies fingered intellectual property disputes a top concern, whereas only 19 percent of financial services counsel viewed IP the same way. Health care providers expressed the single biggest litigation fear — 87 percent identified professional liability as their top concern, even more than employment or contract dispute. No other industry even came close to that level. Environmental/toxic tort litigation was cited by energy companies far more than any other industry. Similarly, product liability litigation was mentioned most by manufacturers. Bankruptcy was cited most by financial companies; class actions singled out most by retailers; and antitrust litigation was mentioned most by manufacturers.

Size Matters
A company’s size also affected its view of litigation. For companies below $100 million in revenues, IP litigation was a top concern by 40 percent of counsel; for companies above $1 billion in sales, the number fell to 32 percent. Counsel at the largest companies expressed greater concern over class action filings (41 percent), than did companies below $100 million in revenues (19 percent). Likewise, environmental cases and government investigations were perceived as far more serious a threat for billion-dollar enterprises. In a small surprise, more billion-dollar companies feared bankruptcy litigation than smaller companies — a sure sign of the times.

Insurance Docket Rules
In terms of active cases, the sector facing the greatest onslaught of current litigation appears to be the insurance industry, by a large margin. The median number of cases in the U.S. reported by insurance company respondents was 152. A very distant second was health care, with 37 average cases. Counsel at real estate and tech companies reported the lowest litigation rates, at 4.6 and 4.5 cases respectively.

“Despite all the recent headlines about government investigations, securities enforcement, tax shelter schemes, and antitrust battles, most companies are more focused on litigation that arises directly from doing business or from operations, such as employment and contract disputes,” said Robert Owen, a Fulbright litigation partner in New York who helped conceptualize the survey.

Domestic Arbitration Widely Used
The Fulbright survey asked corporate counsel about their use of domestic alternative dispute resolution, including binding arbitration clauses, a regular component of business agreements in the U.S. Overall, 43 percent of in-house counsel expressed some favor toward arbitration, while 36 percent gave it thumbs down, and 21 percent were neutral. However, an overwhelming 91 percent of respondents said they foresee arbitration usage as staying the same or increasing over the next several years — suggesting that even those who disliked the practice expected to continue using it. Companies based in Texas and California, along with those in the Atlantic states, strongly favored the use of arbitration, while most areas of New England, the Midwest, and the South held less favorable views towards its use.

Topics Lawsuits Trends USA