Business Litigation to Increase in 2009

Thursday/October/23 09:59 Filed in: litigation
by Derek G. Rowley (c) 2008, All Rights Reserved

The fifth annual survey of litigation attorneys on corporate litigation issues conducted by the law firm of Fulbright & Jaworski was released last month, showing an increase in the expectations that litigation disputes will increase in 2009. According to the study, an astonishing 17% of all privately-held companies, and 9% of all small companies have “at least one lawsuit with more than $20 million at issue” - accounting for one in approximately every 5.5 privately-held companies, and one in approximately every 10 small companies. The issue showing the largest expected increases in litigation in the U.S. are employee wage & hour disputes, privacy and discrimination issues.

Increasingly, arbitration is being used by small business as a method to reduce the cost of resolving employment disputes. However the study reveals that almost one-third of all small companies have spent between $50,000 and $100,000 per dispute, with 25% spending more than $100,000.

Other reasons given in the study for the anticipated increase in 2009 lawsuits include:
  • Exposure to sub-prime and other real estate securities
  • Credit market turmoil
  • Non-payment of bills by consumers in a down market
  • Increasingly aggressive trademark protection
  • Employee termination or disciplinary actions
  • Manufacturing defects and manufacturing counterfeits
Over the past year, the most numerous pending litigation cases involved labor/employment, contracts and personal injury. These litigation issues have consistently been top performers for trial lawyers in recent years. According to the survey, Texas and California led all states as the most active jurisdictions for business litigation, with the U.S. accounting for 80% of all business litigation in the world.

The survey was not limited to civil litigation, however. The survey also found that almost 30% of all companies in the U.S. have received a grand jury or government subpoena or administrative summons in the past year, with 7% of smaller companies receiving three or more.

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