Surge in litigation puts UK companies on defensive

More than three-quarters of UK businesses claim to have faced court action over the past 12 months, with 84% saying they expect the number of legal disputes to either stay the same or increase over the next year.

The 2006 Litigation Trends Survey published by law firm Fulbright & Jaworski found that an emerging trend is that companies are spending substantially more on dealing with regulatory enforcement issues – 58% of UK respondents to the survey said that they have received a regulatory proceeding in the past 12 months.

The research reveals a worrying increase in the amount of litigation faced by UK companies: last year, just 66% of respondents said they faced a court action compared with 78% this year. Perhaps even more worrying was the revelation that the percentage of those respondents who faced more than 50 court actions tripled from 5% to 15%.

According to Fulbright & Jaworski, the average large corporate incurred litigation fees of $10.8m (£5.8m), an increase of more than 30% on last year’s figure of $8m. “All companies have to face up to the challenge of working in a complex regulatory environment and must ensure they are prepared to address current regulatory issues and anticipate future regulatory changes,” says Lista Cannon, head of European disputes at the firm.