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In-house lawyers predict a rise in disputes

February 9, 2024

In-house lawyers predict a rise in disputes

General counsel are bracing themselves for a rise in disputes in the next few years, with many companies considering turning to litigation funding to deal with the rising costs of litigation. 

These were some of the key findings in a report by law firm Shoosmiths released this month, based on conversations with more than 360 GCs and senior in-house lawyers from major UK-based businesses.

In response to the coming challenges, most general counsel are planning to increase both the size of their legal department, and the amount they spend on litigation. Some 77% of those who took part in the research said they intended to increase their specialist in-house litigation teams over the next three years. This was a sizeable jump on the 31% who said they had increased headcount in the past year. 

The need to grow is considered most acute in the technology sector, where 88% of GCs plan to expand their teams in the next three years; while 68% of GCs in the financial services sector are planning to increase headcount. 

In terms of litigation budgets, more than four out of five GCs said they expect to increase resources. This trend was most notable in the automotive industry, where 93% of GCs plan to grow spending over the next three years. Meanwhile legal heads in the financial services industry expect spending to grow by 78%, and in the tech sector by 65%, over the next three years.

So which sectors are likely to be keeping their litigators the busiest? According to the report, which analysed sector trends, financial services is the area with the highest number of disputes, with regulatory activity a particular theme. Meanwhile lawyers working in the financial services industry reported that they are worried that their boards are overlooking emerging risks in areas such as technology disputes, group litigation, crypto and employment. They expect non-EU Europe and Asia Pacific to be among the most active jurisdictions for them when it comes to dealing with disputes.

In the technology sphere, while disputes dipped 48% last year, GCs said they would like to see their boards more alive to emerging risks around technology, employment, environmental and regulatory issues. 

Meanwhile in the automotive sector, group claims have reduced in the past year after a spike that was probably caused by the emissions group actions. In-house lawyers in this field are worried that boards are overlooking threats around technology disputes, supply chain logistics, employment, crypto and group litigation.

Given the increasing challenges, it is perhaps not surprising that a significant number of GCs questioned (31%) said they would consider using third-party litigation funding to support their litigation. As litigation costs increase, so too will the use of litigation finance.


February 9, 2024

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