A recent survey of in-house general counsel, litigators, and chief legal officers gives insight into the high cost of defending against excessive lawsuits and the trends corporate legal departments see on the horizon.
According to the 11th Annual Carlton Fields Class Action Survey, businesses spent more than $3 billion last year—a 16% increase—defending themselves against class action lawsuits.
The survey warns that the number of class actions filed will increase by 27% this year, and companies should expect to spend more money on defense law. The survey said businesses believe pandemic-related claims and data privacy will be the next wave of class action lawsuits.
Additionally, businesses expect to see more consumer fraud class actions—such as those examined in ILR’s 2021 “The Food Court” research paper.
ILR’s research paper found that food and beverage marketing lawsuits have increased 52% in the past four years, with New York seizing the title as the nation’s most popular “food court.”
Other important takeaways from the survey include:
- Labor and employment claims saw the most significant spike in class action suits.
- Consumer fraud class actions came in second at 19.6% of all class actions.
- A quarter of surveyed companies have faced class action litigation arising from COVID-19.
- About 38% of class actions are settled on an individual basis, meaning that in more than a third of class actions, only the plaintiffs’ attorney and class representatives got paid. The hundreds or thousands of consumers who were part of the class received no financial benefit.
The survey interviewed more than 400 general counsel, chief legal officers, and direct reports to general counsel. Surveyed companies operate in more than 25 industries, including banking and financial services, consumer goods, energy, high tech, insurance, manufacturing, pharmaceuticals, professional services, and retail trade.
Carlton Fields Class Action Survey reports on historical trends captured since the survey’s inception and includes information related to emerging issues in class action litigation.