Nearly Half Of UK Firms Expect Litigation Increase In 2006

by Robin Pilgrim, LawAndTax-News.com, London

14 October 2005

According to the 2005 Litigation Trends Survey recently conducted by international law firm, Fulbright & Jaworski, almost half (48%) of the UK companies polled expect to face more litigation during 2006 than they did over the last year.

The survey results revealed that UK corporates are working in an increasingly litigious environment, with two-thirds of UK businesses stating that they had faced court actions in the last 12 months and were particularly concerned about the increasing frequency of product liability cases.

The findings showed however that UK companies are still under less pressure than those based in the US, where three-quarters of respondents have faced at least one court action filed against them over the last year.

The rise in litigation has led to severe concerns about the costs of fighting court action and arbitration, and nearly one in five of the businesses surveyed said that cost was their major concern when dealing with disputes that involve litigation.

The median average allotted to litigation from US and UK companies’ overall legal budget was 29%.

Lista Cannon, head of European disputes at Fulbright & Jaworski, observed that:

“The concern over litigation costs is certainly one point where there is trans-continental agreement. Although the UK system of requiring the losing litigant to pay the winner’s costs can help prevent frivolous litigation out of fear of bearing the other side’s legal bill, our report indicates real concerns over spiralling fees still exist among UK businesses. This anxiety can only be compounded by the increasing number of court actions they anticipate facing.”

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