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Companies braced for wave of litigation in 2010

UK companies are already seeing a wave of litigation in 2009 and expect it to swell further in 2010. 40% of businesses are anticipating an increase in the number of legal disputes in the next 12 months, 9% up on last year’s survey figure.

The annual report: Fulbright’s 6th Annual Litigation Trends Survey Report by global law firm, Fulbright & Jaworski, reported the highest expectation of litigation, with 52 percent forecasting an increase in legal disputes, while 47 percent of public company respondents foreseeing an increase. The economy was cited as the primary reason for these expectations by 34 percent of U.K. respondents.

Key Findings:

• The larger the organisation, the more concerned it is about the possibility of facing more litigation in the next 12 months, with more than half (52%) of companies with revenues of more than US$1bn expecting to see a rise in disputes this year, compared with just 6% who expected to see fewer disputes during the next 12 months.
• All but 4 in 10 respondents have seen an increase in employment cases over 2009.
• Technology companies have doubled their expectation of litigious disputes from 24% to 47% 
• The most numerous litigations cases pending in 2009 were related to contracts (31%), followed by employment (18%), and personal injury (13%).
• In the UK, employment cases to do with wages and hours were the greatest areas of growth in claims brought by multiple claimants, doubled from 18% in 2008 to 35% in 2009.
• In 51% of cases of domestic (UK-based) litigation, arbitration was chosen as the preference of litigation (29%). Lower cost was by far the most frequent reason chosen for this choice.
• The financial services and insurance sectors topped the list of industries expecting an increase in litigation with 50% and 56% of respondents, respectively, saying they anticipated facing more disputes. 
• Two-thirds of respondents (68%) said that the economic crisis had affected their organisation and management of litigation. 
• In terms of the types of litigation seen by companies, a net increase was seen in matters concerning bankruptcy / insolvency (32%), contracts (27%) and regulatory matters (13%). 
• Almost three-quarters (73%) of businesses said that they had at least one lawsuit commenced against them during the past year. The most frequent type of litigation seen by businesses surveyed concerned contracts (41%), followed by labour / employment (36%) and personal injury (23%).

Download the full Fulbright’s 6th Annual Litigation Trends Survey Report.

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