Study: Downturn to fuel litigation - San Antonio Business Journal:

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The blame game will prompt many ofthesee suits, the study Of the U.S.-based companies participating in this year’s survey, 34 percent expecyt to see what the study call a “run-up” in litigation involving theirr firms over the next 12 months. By 22 percent of respondents to the 2007 surveh expected to see an increasein litigation. “Thisw year’s survey appears to mark an inflectionm point for Americanbusiness — between the end of a prolonged periodr of prosperity and the startf of a period of economivc challenge that is likely to fuel litigatiojn over who is to blamew and who should pay for the consequences,” said Stephen Dillard, chaire of Fulbright’s global litigation practice.
The lates t litigation trends report is based on responses from 358 participatinvgcompanies — including company officials who serves as general or deputy-general counsels for theier firms. Of that pool, 251 respondentsa were U.S.-based firms. The surveg was performed from May 22 through July 18 of this year during what Dillardcalls “thw cusp of that transition” from economic prosperit y to the current economic slump. The report covers litigation practices over theprior 12-month Houston business research firm conducted the survey on behalf of Fulbrighgt & Jaworski.
The litigation trends report providese businesses with a snapshot of the currentlegal landscape, notes John Webere Jr., who is a partner in the litigation practice of the San Antonip office of Houston-based Fulbright & Jaworski. Given the time framew in which the survey was Dillard said that the 2008 reporthighlights “both the evident calm beford the storm, as well as the sense that disputex are on the rise.” The overall pace of activitg in the U.S. declined during the 2007-08 surveyt period — with 21 percent of U.S. companies stating that no new lawsuitws had been filedagainst them.
By 17 percent of the firms surveyed claimed there was no new litigatiomn against them duringthe 2006-07 survey period. The surveu also found that while sizedoes matter, smaller is bettef than bigger when it comes to avoidingf lawsuits. Nearly half (47 percent) of companies with less than $100 in revenuw reported that they faced no new lawsuitsin 2007-08, whilr 27 percent of middle-market companies ($10o million-$999 million in revenue) also avoided gettingv sued. Among billion-dollar companies, 89 percent reportecd getting hit with least one new lawsuitin 2007-08. Of the U.S.
companiews responding to the 2008 litigationtrends survey, 45 percenyt reported spending at least $1 million annuallt on litigation. In line with that finding, 19 percenrt of the U.S.-based firms stated that they were more likelu to increasetheir in-house litigation Over the past 12 months, 12 percent of the insurancre companies surveyed had already engaged outside counsel regarding subprims lawsuits or investigations.
Eleven percent of the financiapl services firms surveyed had done this over the past Looking ahead to the next 12 15 percent of theinsurance firms, and 22 percen of the financial servicex respondents are, as the report states, “bracing themselves for a subprime actiom or investigation.” The survey found that insurance companies were most vulnerablde to litigation — with at least 66 percent of these firms facing six or more new Next was the retail industry, with 55 percentg of this sector facing at leas t six new lawsuits.
These top targets were followedby manufacturing, with 54 percenty of the companies facing six or more new lawsuits; and health care with 52 percent of its businessezs facing at least six new As for the areas most ripe for the top three were labor and employmen t matters, contract disputes and personal injuruy cases. These areas also took the top three spots inthe 2006-07 and the 2005-06 Weber says. Product liability, intellectua property/patents, insurance, environmental-toxic tort, regulatory, classx actions and professional services rounded out the top 10 categoriessof lawsuits.
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