Employers faced greater litigation — and higher related expenses — last year than the previous year and are likely to face similar issues this year, due to increased regulations, class action suits concerning bank and financial fraud, and cyber attacks, according to corporate counsel at Norton Rose Fulbright.
“Environmental, social and governance issues pose a growing concern for both class actions and litigation more generally,” the global law firm noted in its 2024 Litigation Trends Survey.
The law firm surveyed more than 400 general counsel and in-house litigation leaders based in the United States and Canada in September; respondents represented a range of industries.
“Increased regulatory scrutiny and the proliferation of national, supranational and local regulatory frameworks means that incidents occurring in one jurisdiction can quickly impact operations in others,” according to the report, adding that companies should have “robust” preventive measures and compliance tools in place to minimize risk and manage litigation.
Respondents, on average, spent $2.3 million on litigation last year, compared with $2 million in 2021. Companies with more than $1 billion or more in revenue spent an average of $3.9 million on litigation in 2023.
“The share of the budget spent on outside counsel remained relatively flat in 2023 from the previous year, to 65% from 63%, while the share allocated to personnel and other in-house expenses shrank slightly, down to 19% in 2023 versus 22% in 2022,” the report noted. “Spending on other vendors — such as eDiscovery firms, alternative legal service providers and expert witnesses — also changed little, at 10% of [the[ litigation budget from 8% in the previous year’s survey.”
“Alongside more perennial dispute risks such as class actions and regulatory investigations, 2023 brought rapid-fire developments in artificial intelligence,” according to Jamila Mensah, head of litigation disputes at Norton Rose Fulbright.
The report findings mesh with those of a separate report from law firm Duane Morris.
The number of class action settlements in 2023 outpaced predictions for the second year in a row, which likely will incentivize the plaintiffs bar to be even more aggressive in seeking class standing, according to the annual Duane Morris Class Action Review.
“We have entered a new era of heightened risks and higher stakes in the valuation of class actions,” said Gerald L. Maatman Jr., chair of the firm’s workplace class action group.
