Norton Rose Fulbright Releases 2015 Litigation Trends Annual Survey

Findings show increase in disputes as a major concern for companies globally |

Global legal practice Norton Rose Fulbright  on May 14 released its 2015 Litigation Trends Annual Survey. This year’s survey is the 11th overall and the most extensive in its history, polling more than 800 corporate counsel representing companies across 26 countries on disputes-related issues and concerns. Survey respondents – primarily general counsel – indicated that the increasing number of class action lawsuits and a more litigious business environment were the most important issues impacting their companies.

Norton Rose Fulbright’s 2015 Litigation Trends Annual Survey was conducted by Acritas, a global legal services market business research firm. Introduced in 2004, this is the largest survey of corporate counsel on litigation issues and trends, with respondents across numerous jurisdictions (including the United States, United Kingdom, Canada, Australia, France, Germany, Singapore and Hong Kong) from a wide range of industry sectors (financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare).

Class action lawsuits were listed as the top litigation issue by respondents in the US, Canada and Australia. The UK ranked an overall increase in litigation – including frivolous lawsuits – as the top issue.

Gerry Pecht, Global Head of Dispute Resolution and Litigation, Norton Rose Fulbright, said:

“What we are seeing is a direct response to the ever-broadening array of legal and regulatory challenges that companies face today. As the business environment becomes more complex, companies are spending more out of necessity to protect their interests and ensure that they are represented properly.”

A quarter of all respondents reported at least one class or group action against their companies in the preceding 12 months, with survey participants from the US comprising 80 percent of that number. And 71 percent of those who reported a class action had more than one filed against their companies in the previous 12 months.

US-based respondents also reported a more litigious business environment than their peers, with 55 percent facing more than five lawsuits filed against their companies in the previous 12 months, compared with 23 percent in the UK and 22 percent in Australia. Just 18 percent of US companies reported no lawsuits, compared with 42 percent in the UK and 36 percent in Australia.

Regulatory and investigations matters are a focus for in-house counsel, with 39 percent of respondents citing those issues as their top concern. Among companies with revenues of US$1 billion or more, 51 percent indicate they have one or more regulatory proceeding pending against them. Half of respondents indicate their company has retained outside counsel for assistance in a government or regulatory investigation. Across the entire sample, 44 percent of respondents indicate they have had at least one internal investigation requiring assistance of outside counsel in the previous 12 months.

In general, respondents expect the legal environment to continue to grow in complexity. Overall, 25 percent of respondents anticipate litigation against their companies increasing in the next 12 months, compared with just 14 percent who predict it will decrease. Twenty-two (22) percent increased the number of outside firms on their rosters in the past year. And half of all respondents have spent more time during the last three years addressing regulatory requests or enforcement proceedings.

Respondents were given a list of more than 20 categories of pending litigation their companies faced over the past 12 months, and asked to select the top three to five. Contracts, labor/employment and regulatory/investigations received the most selections from respondents, followed by personal injury and IP/patents.

What follows are highlights from Norton Rose Fulbright’s Litigation Trends Annual Survey. For a link to the descriptive “white paper” go to:

Regional highlights

United States

Just over 50 percent of the survey’s respondents are from companies with headquarters in the United States. The average US company polled has 20 in-house lawyers to handle disputes.

The number of US companies with an annual litigation spend of US$1 million or more rose significantly between 2012 and 2014. The share of companies with legal budgets of more than US$1 million increased to 69 percent from 52 percent in 2012. A total of 34 percent reported budgets of US$1 million to US$5 million, up from 26 percent two years ago.

Respondents also reported an increase in the percentage of US companies with litigation budgets of US$10 million or more (25 percent, compared with 17 percent in 2012). Respondents with budgets of less than US$500,000 fell to 21 percent of the total, down from 31 percent in 2012.

Respondents identified a number of significant differences in the types of litigation that US companies face compared with their peers worldwide. For example, personal injury litigation is significantly more prevalent in the US than in other countries, with 21 percent of respondents selecting it as one of the most numerous types of cases they faced in the previous 12 months. That compares to just 15 percent in the survey overall.

In addition, intellectual property/patents (18 percent) and product liability (17 percent) cases were more common in the US than worldwide (13 percent and 11 percent, respectively).

Going forward, more US respondents say regulatory/investigations are a top concern compared with the broader sample (48 percent to 39 percent). The percentage of US respondents most concerned with contracts disputes declined to 29 percent, from 36 percent in the previous survey.

IP/patents disputes are of greater concern in the US (30 percent) compared with all respondents (21 percent). Only about one in 10 respondents in Australia, Canada and the UK listed IP/Patents among their top dispute concerns.

In addition, more US respondents list class actions (25 percent) and product liability (18 percent) as top concerns compared with the total sample (18 percent and 14 percent, respectively).

Forty-two (42) percent of US companies reported being a party in one or more arbitrations over the past 12 months, slightly more than the 35 percent reported among all respondents. Arbitrations commenced by US respondents have remained steady since 2011, with no statistically significant change.

The US reported the greatest incidence of one or more regulatory proceedings commenced against respondent companies (43 percent). This proportion has remained steady during the past three years.

Richard Krumholz, Head of Dispute Resolution and Litigation, United States, Norton Rose Fulbright, commented:

“Our survey clearly demonstrates that the litigation and regulatory environment in the United States continues to pose some of the greatest risks which businesses from around the world face. This is reflected in rising litigation budgets and the size of disputes-focused staff compared to peer companies around the globally.”

Sixty-two (62) percent of US companies used alternative fee arrangements (AFAs) in the previous 12 months, consistent with 2013 findings and slightly higher than the 56 percent worldwide using AFAs.

Overall, the most common type of AFA used was fixed fee (66 percent). In the US, use of performance/rewards-based fees (25 percent) fell compared with last year (35 percent). And capped fees were less common in the US (51 percent) compared with the total sample (59 percent).

Across the survey, more than 97 percent of respondents who have experience with AFAs are satisfied with the work performed.

United Kingdom

Respondents from the UK reported increased regulatory pressures and a rise in banking and financial litigation. At 67 percent, respondents from the UK are the most likely to have spent more time over the past three years compared with global counterparts (50 percent) addressing regulatory investigative requests or regulatory enforcement proceedings, either as a party or non-party. Forty-eight (48) percent of UK respondents have cited that cross-border regulatory enquiries or investigations have increased. Sixteen (16) percent of UK respondents faced one or more regulatory proceedings worth in excess of US$20 million over the past 12 months.

Banking and financial disputes were much more common in the UK (16 percent) than other regions globally (7 percent). The uptick in actual banking/finance disputes has led to an increase in concerns over future cases, with 21 percent of UK respondents citing them as a top issue, compared with the overall survey (9 percent).

The proportion of UK respondents reporting litigation budgets of less than US $500,000 has increased (41 percent versus 21 percent in 2012). The bulk of this increase comes from companies that previously reported budgets ranging from US$500,000 to US$1 million, which slipped to 10 percent from 21 percent in 2012.

It is therefore significant that UK companies continue to report a preference for alternative fee arrangements (AFAs), with 53 percent claiming to have used AFAs. UK respondents reported preferring capped fees (76 percent) and fixed fees (56 percent) followed by blended rates (34 percent). Interestingly, there has been a hike in conditional fee arrangements, with UK respondents (22 percent compared with 9 percent in 2012) preferring this method. Over a third (38 percent) of respondents agreed that the use of AFAs by their organization is likely to increase over the next 12 months.

Over a third (35 percent) of UK respondents listed contractual disputes as a top area of concern in the future, a significant drop from 2012 (53 percent).

When given a choice in disputes that are international in nature, 42 percent of UK respondents chose arbitration, compared with 34 percent choosing litigation. The number of international arbitrations involving UK companies has remained consistent over the past two years with 40 percent of UK companies not party to any international arbitrations (compared to 38 percent in 2012).

Cross-border disputes, particularly those of a regulatory nature, are on the upswing, according to 48 percent of UK respondents, the highest figure of any region.

Deirdre Walker, Head of Dispute Resolution and Litigation, Europe, Middle East and Asia, Norton Rose Fulbright, said:

“Regulatory matters and banking and financial litigation are primary concerns for UK in-house counsel. Respondents are spending more time on investigations and enforcement proceedings. However, this comes at a time when litigation budgets in the UK are being squeezed and companies are not dramatically increasing their outside counsel rosters. Companies are demanding innovation and expect real value for money with alternative fee arrangements identified as of prime importance.”


Canadian companies average about four disputes-focused lawyers, well below the total survey average of 16.3. Those small staff sizes are mirrored in Canada’s average litigation spend: 62 percent spend less than US$500,000 per year, among the smallest average budgets reported.

Respondents from Canada reported far more labor/employment matters in the previous 12 months than the survey as a whole (49 percent to 37 percent), as well as higher numbers of company/commercial construction litigation (15 percent to 5 percent for the overall survey). But the number of product liability cases was much lower than the average (4 percent to 11 percent).

Roger Smith, Head of Dispute Resolution and Litigation, Canada, Norton Rose Fulbright, said:

“Although the litigation climate is less aggressive in Canada than in some other regions we surveyed, there are still a number of issues that are important for general counsel. For example, labor and employment law is complex and wide-ranging in Canada, and that is clearly reflected in the responses we received. And contract disputes are still a major issue for companies in Canada, as they are in many regions.”

Canadian companies are also less concerned about regulatory/investigations and IP/patents than their peers in other countries (24 percent to 39 percent and 10 percent to 21 percent). A total of 33 percent of Canadian respondents said regulatory proceedings had been initiated against their companies in the previous 12 months, which is similar to the overall survey at 34 percent.

In Canada, 41 percent of companies used AFAs in the previous 12 months, below the survey average.


Australian companies highlighted increasing class actions and the growing threat of government or regulatory investigations as being among their biggest concerns. And while 73 percent of global respondents preferred to use one firm for cross-border disputes or investigations, in Australia that figure leapt to 90 percent.

Australian companies also rely more on outside counsel than in-house lawyers to advise on a government or regulatory investigation. In the last 12 months, 64 percent had used outside counsel for these matters, compared with the US (56 percent), Canada (53 percent) and all global respondents (50 percent). One reason for these responses was the relative size of Australian in-house legal teams, averaging 8.8 lawyers compared with 19.8 in the US, 14.0 in the UK and 16.3 globally.

Tom Jarvis, Head of Dispute Resolution and Litigation, Australia, Norton Rose Fulbright, said:

“One interesting trend emerging from the survey is that while companies across the world are dealing with more regulatory and investigation activity, Australian companies are more likely to rely on outside counsel for advice in these matters. Globally, companies cite consistency, single point of contact, logistics, efficiency of service and cost effectiveness as the major reasons why they prefer to retain one firm for cross-border disputes or investigations.”

On the serious concerns corporate leaders had about the impact of increasing numbers of class actions, Jarvis commented:

“Consistent with their global counterparts, Australian respondents cited an increase in class actions as their greatest future threat. Apart from class actions, Australian companies also fear the burden of dealing with a generally more litigious environment.”

Industry highlights

Financial institutions

Financial institutions respondents were far more likely to select regulatory/investigations as a common type of litigation faced in 2014, with 26 percent choosing it from a list of options, compared with just 16 percent of their peers in other industries. Financial institutions were also more likely to face insurance litigation than their peers (19 percent to 8 percent).

Regulatory/investigations also topped the list of future concerns among financial institutions respondents, at 46 percent, compared with 39 percent overall.

James Bateson, Global Head of Financial Institutions, Norton Rose Fulbright, stated:

“Financial institutions today face a myriad of regulations that are complex and often difficult to implement, especially across large organizations. At the same time, there is increased scrutiny from regulators who are watching closely to ensure compliance. So it is not surprising that counsel is concerned about their organizations’ ability to keep pace.”

Financial institutions averaged 18.9 in-house lawyers in 2014, compared with 16.3 lawyers overall. As with other industries, the majority of respondents believe their companies will not add lawyers to in-house staff in 2015.

Only 15 percent of financial institutions increased the number of outside firms working on their behalf in 2014, compared with 22 percent overall. Financial institutions were the least likely of all industries surveyed to have increased their outside counsel roster.

Among all sectors, financial institution respondents reported the lowest incidence of one or more pending lawsuits, at 66 percent.


Energy respondents ranked contracts disputes among the most numerous type of dispute they faced in 2014, with 47 percent choosing it from a list of 20 possibilities – well above the overall survey average of 28 percent. Energy companies were also more likely to rank environmental/toxic tort litigation as a major issue than their peers (21 percent to 7 percent).

Energy companies rated regulatory/investigations (44 percent) and contracts (45 percent) as major concerns for the future, in both cases, well above the overall survey percentage (39 percent for regulatory/investigations; 34 percent for contracts). Only 17 percent of energy respondents said that labor/employment issues are a concern.

Simon Currie, Global Head of Energy, Norton Rose Fulbright, said:

“The energy industry operates in a contractual and political environment where disputes can arise with a wide range of counterparties and stakeholders. Issues which commonly lead to disputes include technology appropriation, price redeterminations, supplier performance and accidents. In the current cycle we are seeing a rise in major disputes over supplier performance across the value chain.”

Energy respondents reported fewer in-house lawyers than the survey in general. The average energy company had 12.1 in-house lawyers in 2014, compared with 16.3 for the survey overall. However, energy companies were more likely to have increased the number of outside firms on their rosters in 2014 (32 percent to 22 percent overall).

At 38 percent, energy respondents were also more likely to have been a party to an arbitration in 2014, compared with companies in the overall survey (26 percent). But energy companies were less likely than their peers to be involved in IP lawsuits or proceedings.

Infrastructure, mining and commodities

Infrastructure, mining and commodities companies ranked contracts as the most frequent area of dispute in 2014, with 57 percent of respondents selecting it from among the possible choices, compared with just 28 percent of their peers in other industries. That was followed by labor/employment at 27 percent and regulatory/investigations at 13 percent.

Contracts were also ranked as the top concern going forward, with 50 percent of infrastructure, mining and commodities respondents making that selection, compared with just 34 percent of overall respondents.

Nick Merritt, Global Head of Infrastructure, Mining and Commodities, commented:

“As with the energy industry, mining and commodities companies can face disputes over contracts, or investment rights with host countries. Such companies often invest heavily in developing or emerging markets where the regulation may be unclear. It’s definitely a challenge for counsel and few firms have the necessary in-country experience to help clients through the issues.”

Infrastructure, mining and commodities respondents were also more concerned about company/commercial construction issues (21 percent) than their peers (8 percent).

This sector also reported having fewer in-house lawyers to handle disputes than their peers (13.5 compared with 16.3).

Infrastructure, mining and commodities companies were among the most likely to have been a party to an arbitration in 2014, at 43 percent, compared with 26 percent of all respondents.


For the transport sector, the area of most concern is contracts, selected by 33 percent of respondents. However, transport respondents were least likely to list regulatory/investigations as a top concern (21 percent compared with 39 percent for the broader survey).

Interestingly, transport respondents reported the largest in-house disputes staff with 24.5, compared with the overall average of 16.3. Transport is second only to life sciences and healthcare respondents in the average number of in-house lawyers.

Transport respondents were less likely than their peers to report that they felt an increased burden from regulatory investigation requests or regulatory enforcement proceedings. Just 28 percent of transport respondents said they had spent more time on those issues in recent years, compared with 50 percent of overall respondents from all industries.

Harry Theochari, Global Head of Transport, Norton Rose Fulbright, said:

“The lower level of concern over regulation is likely to be as a result of transport’s mature status and the relatively low impact that technology has had on the day-to-day operations of the industry. Most of the regulations facing transport have been in place for a long time and there is a level of familiarity with them that is very different from other sectors.”

Technology and innovation

Respondents from the technology and innovation sector cited contracts (40 percent) and labor/employment (37 percent) among the most numerous types of litigation faced in 2014.

However, labor/employment issues are seen as a leading concern in the future, at 44 percent, followed by regulatory/investigations (33 percent) and contracts (30 percent). Overall, labor/employment issues were selected by 33 percent of respondents; regulatory/investigations ranked as the top concern at 39 percent.

Technology and innovation companies averaged 17.5 in-house lawyers in 2014, compared with the overall survey at 16.3 lawyers. In general, four in five respondents expect the number of in-house litigation lawyers at their organizations to stay the same in 2015, with 15 percent expecting an increase.

Not surprisingly, technology and innovation companies were more likely to be involved in an IP lawsuit or proceeding, compared with their peers in other industries. Thirty-eight percent of technology and innovation respondents said they had been involved as the claimant/plaintiff, compared with 22 percent overall; and 40 percent said they had been involved as the respondent/defendant, compared with 24 percent overall. Only companies in life sciences and healthcare reported higher incidents of involvement in IP cases.

Mike Rebeiro, Global Head of Technology and Innovation, Norton Rose Fulbright, said:

“The technology sector has long dealt with intellectual property disputes, but we are seeing a general increase in regulatory interest, especially as technology firms have grown in stature. Going forward, we also expect to see an increase in labor and employment disputes.”

Life sciences and healthcare

Labor/employment issues were ranked among the most numerous dispute type among life sciences and healthcare respondents, at 51 percent, compared with just 20 percent among all respondents. A total of 30 percent of life sciences and healthcare respondents listed product liability cases among their most prevalent disputes, far more often than respondents overall (11 percent).

Industry respondents selected regulatory/investigations (47 percent) and labor/employment (43 percent) as top concerns going forward. Both of those figures were higher than the overall survey average (39 percent and 33 percent, respectively).

Life sciences and healthcare respondents are also more concerned with IP/patent issues than their peers in other industries (45 percent to 21 percent), as well as product liability (32 percent to 14 percent) and professional malpractice (29 percent to 7 percent).

Respondents from the life sciences and healthcare sector also reported the highest incidence of lawsuits against them, with 90 percent saying they had at least one commenced in 2014. They are also most likely to have at least one arbitration pending against them (51 percent) versus the total sample (35 percent).

Rick Robinson, Global Co-Head of Life Sciences and Healthcare, Norton Rose Fulbright, commented:

“Life Sciences and Healthcare is one of the most heavily regulated industries around the world, and the potential for lawsuits is high because of the nature of the work involved. We see a growing concern in the sector about both the increasing complexity of regulations world-wide and the pervasiveness of litigation and government investigations in multiple subject areas.”

Among life sciences and healthcare industry respondents, just 18 percent reported a 2014 litigation budget of US$1 million or less, compared with 36 percent for all respondents.

Life sciences and healthcare respondents also reported the largest in-house disputes staff, with 28 compared with the overall average of 16.3.

This sector also has the largest percentage of respondents who experienced an internal investigation that required outside counsel assistance in the previous 12 months, at 67 percent (compared with 44 percent overall).

Life sciences and healthcare respondents led the way in data collection in response to a legal dispute. For example, 72 percent said they had collected data from a mobile device in the previous 12 months; 88 percent rely on self-preservation of data for some legal matters; and 75 percent use technology-assisted reviews, such as predictive coding or other data analytics.

Life sciences and healthcare respondents were also most likely to be involved in an IP lawsuit in the preceding 12 months than their peers, with 47 percent involved as a claimant/plaintiff (compared with 22 percent of the overall survey) and 50 percent as a respondent/defendant (compared with 24 percent).

Norton Rose Fulbright is a global legal practice. We provide the world’s pre-eminent corporations and financial institutions with a full business law service. We have more than 3800 lawyers and other legal staff based in more than 50 cities across Europe, the United States, Canada, Latin America, Asia, Australia, Africa, the Middle East and Central Asia. Our Global Dispute Resolution and Litigation Practice is comprised of 1200 lawyers.

Recognized for our industry focus, we are strong across all the key industry sectors: financial institutions; energy; infrastructure, mining and commodities; transport; technology and innovation; and life sciences and healthcare.

Wherever we are, we operate in accordance with our global business principles of quality, unity and integrity. We aim to provide the highest possible standard of legal service in each of our offices and to maintain that level of quality at every point of contact.

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