Trials & Litigation

Tort reform stabilizing litigation, but survey sees dramatic increase in government probes

General counsels at nine of 10 U.S. businesses say they expect litigation at their corporations to remain at the same or increase in 2013, according to Fulbright & Jaworski’s 9th Annual Litigation Trends Survey.

Companies are facing more litigation over governmental regulatory investigations and proceedings, but are seeing fewer class action lawsuits and fewer labor and employment disputes, the survey of 278 U.S. businesses showed.

The Houston-based law firm found that litigation is increasing in the energy, environmental and white-collar criminal practices.

More than 27 percent of U.S. companies say they spent $5 million or more on legal fees related to litigation, while 53 percent of those surveyed said they forked over $1 million or more.

Three of five businesses say they sued other businesses or individuals in 2012 and 86 percent said they were sued at least once during the past year.

“Litigation is stabilizing,” says Fulbright litigation partner Layne Kruse in Houston. “The decline in class action litigation is the direct result of tort reform. By contrast, governmental investigations were very small when we started these surveys a decade ago but have dramatically increased over recent years.”

The Fulbright survey found that 55 percent of U.S. companies hired outside counsel to advise on government inquiries and regulatory matters in 2012, which is up from 43 percent in 2011.

Kruse points out that whistleblowers are playing increasing roles in litigation.

“Dodd Frank, the Foreign Corrupt Practices Act and federal and state False Claims acts have spurred a tremendous growth in whistleblower-related claims,” he says. “I think that is only going to continue.”

Kruse says the survey helps Fulbright and other firms better understand the needs of their clients.

“It allows us to know what areas of litigation are picking up and that helps us be more responsive to our clients and the market,” he says.

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