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Employers expect legal disputes to soar next year


Companies are bracing themselves for a big year of litigation in 2010 with almost half of UK employers anticipating an increase in the number of legal disputes over the next 12 months.

According to the Litigation Trends Survey 2009 published today by global law firm Fulbright & Jaworski International, 48% of employers in the UK are expecting more legal action next year. The global figure of 40% is up 9% compared with last year.

The larger the organisation the more concerned it is about the possibility of facing more litigation in the year ahead, with more than half (52%) of global companies with revenues of more than US$1 billion expecting to see a rise in disputes this year, compared with just 6% who expected to see fewer disputes during the next 12 months.

The financial services and insurance sectors topped the list of industries expecting an increase in litigation with 50% and 56% of respondents, respectively, saying they anticipated more disputes.  

Two-thirds of respondents (68%) said the economic crisis had affected their organisation and management of litigation. In terms of the types of litigation seen by companies, a net increase was seen in matters concerning bankruptcy/insolvency (32%), contracts (27%) and regulatory matters (13%).

Chris Warren-Smith, partner and co-chair of Fulbright's Global Litigation Practice Group, said: "An economic downturn of the type we are experiencing normally leads to an increase in litigation as regulators become more active, company accounts are scrutinised more carefully, laid-off employees head to court and businesses start proceedings to collect money owed.

"Most telling about this year's results is that very few companies across the board expect any decreases in any area of litigation."

Fulbright's 2009 survey indicates litigation exposure remains high, with almost three-quarters (73%) of businesses saying they had at least one lawsuit commenced against them during the past year. The most frequent type of litigation seen by businesses surveyed during the past year concerned contracts (41%), followed by labour/employment (36%) and personal injury (23%).