Downturn spurs more litigation

Corporate law departments in the US and UK expect a big year for litigation with most anticipating an increase in legal disputes over the next 12 months, according to Fulbright’s Litigation Trends survey.

Unsurprisingly, bankruptcy, class actions and regulatory actions were all up this year, according to the survey. Further, the number of reported cases of corruption or bribery investigations over the past 12 months nearly doubled over the previous year’s survey.

Regulatory investigations and whistleblower allegations are both expected to eat up litigation resources in the year ahead, according to the survey.

Sixteen percent of respondents expected the number of internal investigations involving their company to increase. Twenty four percent expected the number of claims brought by whistleblowers in their industries to go up.

“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,” said Stephen 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.”

Most of the lawyers polled thought that in light of the downturn, companies faced big increases in bankruptcy, contracts and employment litigation. More modest increases in litigation were cited in intellectual property, insurance and regulatory actions.

Over the past year, 19% of respondents retained counsel for investigations by the US Securities and Exchange Commission (SEC).