Litigation Risk Rises Amid Sagging Economy

The upward trend in litigation against U.S. companies that began with the economic downturn continued in 2010 and will likely increase again in the coming year, according to the Seventh Annual Litigation Trends Survey from international law firm Fulbright & Jaworski.

Some 93 percent of corporate counsel at U.S. firms polled by Fulbright & Jaworski expect legal disputes to increase or remain the same in the next 12 months, while 87 percent said their companies faced new litigation in the past year, up from 83 percent the previous year.

Fulbright reports that more large-cap companies than mid- and small-caps expect litigation increases over the next 12 months, while by industry sector a sizeable 42 percent of energy companies are bracing for a jump in disputes.

As well as the lagging economy, nearly one-third of U.S. in-house counsel cited stricter regulation as a major concern.

Fulbright noted that more regulators have been investigating a greater variety of companies, from small to large and across sectors – particularly banking, healthcare and energy.

Looking ahead, one-quarter of all respondents – and one-third of respondents from energy, healthcare and insurance – expect the number of regulatory proceedings their companies face to increase in the coming year.

From the insurance perspective, large increases in tort costs lead to higher insurance costs and can harm businesses trying to grow. Check out the latest Insurance Information Institute (I.I.I.) report that examines the state of tort inflation in the U.S.

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