Companies in the United States and United Kingdom dealt with more litigation last year, while regulatory investigations reached a five-year high, according to a report.
Litigation rebounded to 2010 levels in 2012, after a one-year decline, with labor and employment disputes and contract litigation leading the lawsuit filings in the United States, reported iInternational law firm Fulbright & Jaworski in its 9th Annual Litigation Trends Survey.
The report, based on a survey of 392 in-house attorneys, including 275 U.S. respondents, also found many more companies retaining outside counsel for assistance in a regulatory investigation last year. Sixty percent of U.S. respondents reported that they had done so, up from 55 percent in 2011. In the U.K., the jump was more striking—rising from 27 percent in 2011 to 72 percent in 2012.
“Ever since the financial crisis, our litigation trends survey has found respondents confronting increased regulatory scrutiny,” said Otway B. Denny, the head of Fulbright’s global disputes practice. “As litigation rebounded in 2012, more companies, particularly in energy, health care, and manufacturing, experienced an increase in government and regulatory investigations. All three of these industries, along with technology, were involved in investigations that concerned at least six different U.S. regulators.”
According to a summary of the survey:
• Nearly three-quarters of respondents from the energy, health care, and manufacturing sectors have been the target of a regulatory investigation.
• As in 2011, in the United States, the Department of Justice and the state attorneys general have been active in investigations. While the DOJ’s focus has been on technology, health care, engineering, and energy companies, the state attorneys general tended to focus more on insurance companies. In addition, the SEC has stepped up its efforts with investigations targeted at financial services and insurance companies.
• In the U.K., respondents are mostly concerned with investigations by the Financial Services Authority (38 percent).
As for litigation prospects for 2013, most companies responding to the Fulbright survey—92 percent said they expect the number of legal disputes their companies will face to rise or stay the same in the next 12 months.
In addition to breaking down litigation trends by industry and type of action, the survey also addresses litigation management (questions about budgets, fees and in-house hiring).
Source: Fulbright & Jaworski L.L.P.