Litigation Costs, Dragging Down the Economy

By October 23, 2007Briefly Legal

Good column in the Kansas City Star by Dan Margolies summarizing a survey of U.S. and UK corporate counsels by the law firm of Fulbright and Jaworski, which reports a decline in lawsuits against business. (The law firm’s news release is here.) From Margolies:

Labor and employment, contracts and personal injury actions are the top litigation concerns of American companies, according to a recently commissioned survey of corporate counsel.

Not surprisingly, the same matters represent the most numerous kinds of litigation experienced by U.S. corporations.

While the number of surveyed companies sued fell from 2006, lawsuits with $20 million or more at stake rose. Of the smallest companies in the survey, 17 percent had at least one lawsuit of that magnitude, while 98 percent of the midsized companies in the survey had from one to 20 and 2 percent had between 21 and 50.

Of the largest companies, 80 percent had up to 20 lawsuits involving $20 million or more, and the rest reported between 21 and 50.

So continued costs albeit with a good trend, consistent with earlier reports of a decline in securities lawsuits.

And to highlight the differences in legal climates and the impact litigation has on comparative competitiveness:

Nearly six in 10 of the British companies surveyed spent less than $500,000 on litigation, compared with just a third of the U.S. companies surveyed.

Kind of an odd phrasing, but the point is this: U.S. companies pay more defending themselves.

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