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Otway Denny Jr.
Buckle up, general counsel, because your colleagues expect a bumpy litigation ride in 2013. In fact, according to the "9th Annual Litigation Trends Survey" by the law offices of Fulbright & Jaworski, it’s already started.
Companies in the United States and United Kingdom dealt with more litigation last year while regulatory investigations reached a five-year high, according to the survey results released Tuesday.
“And almost everybody thinks the trend is going to stay the same or increase in 2013,” global litigation chief Otway Denny Jr. told CorpCounsel.com. Denny has been a partner in the firm’s Houston office since 1981.
The Fulbright survey polled 392 in-house attorneys. Of the respondents, most are general counsel and 14 percent are head of litigation. Seventy percent of respondents are based in the U.S., 26 percent in the U.K., and 4 percent in other countries.
The companies represented in the survey are roughly 50 percent public and 50 percent private. Their sizes varied: 49 percent were large companies, with gross revenues of $1 billion or more; 31 percent were mid-size, over $100 million; and 20 percent were small, less than $100 million.
The number of companies that retained outside counsel for assistance in regulatory investigations in 2011 jumped considerably in the U.S. (from 43 percent to 55 percent). In 2012, the number rose again, hitting 60 percent in the U.S, the report said.
About one-third of respondents in last year’s survey reported having spent more time addressing regulatory investigative requests. This year’s survey found that overall rate continuing to increase to 42 percent.
And Denny said many respondents expect an increase in regulatory investigations in the coming year. “Those are here to stay,” he remarked. Probes by the U.S. Department of Justice, the Securities and Exchange Commission, and attorneys general led the list. The report said nearly three-quarters of respondents from the energy, health care, and manufacturing sectors have been the target of a regulatory investigation.
Denny said the response on increased regulatory litigation “was not surprising.” But on the brighter side, in-house counsel noted decreased activity in class action lawsuits, he added.
Among other findings from the report:
- Whistleblower allegations remain high and could climb higher. More than one-fifth of the respondents reported being subject to accusations by a whistleblower. Larger companies were more likely to be hit. Only 3 percent of respondents predict a decline in whistleblowers over the next 12 months.
- As the U.S. unemployment rate declines, labor and employment litigation eases. Suits fell off across all areas, with the most pronounced drop in wage and hour disputes. But employment litigation rose in the U.K., with sex discrimination cases leading the way.
- For the fifth year in a row, class actions remained flat, with only a quarter of respondents having faced one or more class or group action in the past 12 months in U.S. courts. Employment and consumer cases led the way; while retail, financial services, and engineering saw slightly higher levels of class actions than other industries.
- About one-third of companies said they used cloud-computing services. Of those respondents, a third have had to preserve or collect data from the cloud in connection with actual or threatened disputes or investigations. And about one-fifth of all companies have had to preserve or collect data from an employee’s personal social media account.
- Some 13 percent of respondents expect the number of in-house lawyers who manage or conduct litigation to increase in the coming year. Among industries, prospects for increases in in-house litigation management teams stood highest among tech, health care, energy, retail/wholesale, insurance, and manufacturing companies.
