In global law firm Norton Rose Fulbright's 16th annual Litigation Trends Survey, nearly half of the corporate counsel respondents state that the COVID-19 pandemic has caused either an increase or decrease in their volume of disputes.
Primarily driven by commercial/contract issues and employment and labor disputes, 31 percent of corporations reported an increase in litigation as a result of COVID-19. Conversely, 12 percent reported experiencing a decrease in disputes due to the pandemic. An additional three percent experienced an increase in certain types of disputes and a decrease in others because of the pandemic.
Additionally, with many courts remaining closed, the one third of corporations who saw their disputes backlog grow will face even more significant strain as they seek to clear an excess of active cases. COVID-19 caused an increase in workloads for nearly 70 percent of respondents, but just 18 percent said they have a mandate to increase in-house team sizes.
Research indicates that a rise in workloads is likely to continue well into 2021, with 45 percent of respondents predicting a further increase in the number of pandemic-related disputes for the next year.
Richard Krumholz, Norton Rose Fulbright's Global Head of Litigation and Disputes, said:
"It is clear that the pandemic has led to a buildup of cases that is taxing our respondents' legal departments. On larger matters, in-house legal teams are being asked to assume additional responsibility to lower the amount of spend on outside counsel. There is more pressure than ever for in-house teams to do more with less, and fewer than 20 percent of our respondents expect to add lawyers to their staff."
With COVID-19 dominating the conversation, it is important to recognize that other trends have also emerged or grown in prevalence.
One third of organizations now feel more exposed to disputes concerning discrimination and social justice. Awareness of increased discrimination disputes — and what is driving them — does appear to be significant. Approximately half of the respondents are either taking action now or have recognized that their diverse recruitment policies need to be more robust. These businesses are also educating their employees on the legal implications of discrimination.
Cybersecurity and data protection disputes have increased over the last several years, and 2020 was no exception; 44 percent of respondents feel more exposed than they did 12 months prior. Respondents report that past attacks have disrupted operations, with others sensing that their company size or industry makes them targets.
Norton Rose Fulbright's 16th annual Litigation Trends Survey is based on polling nearly 200 corporate counsel — primarily general counsel — representing US-based organizations on disputes-related issues and concerns.
A comprehensive report detailing the survey's findings is available at litigationtrends.com. Highlights of the report include:
- More than one tenth of this year's respondents (11 percent) reported a significant increase in the volume of disputes with which they had to deal.
- Responses indicated that larger organizations (with more than US$1 billion in revenue), along with financial institutions, were more likely to have seen an upward shift in dispute volumes.
- Three quarters of our respondents had engaged in some kind of dispute activity in a remote setting during 2020; most expect elements of virtual activity to continue post-pandemic.
- Since the beginning of the pandemic, 56 percent of respondents reported attending hearings and court proceedings remotely. More than half reported doing depositions remotely, and just under 40 percent of respondents participated in remote litigation.
- In 2019, 73 percent of litigation spending was allocated to law firms. In 2020, this allocation dropped to 66 percent, with a comparable increase in in-house spending.
- Twenty-two percent of respondents have increased the volume of early settlements as a defendant and 14 percent as the plaintiff.
- Approximately one third of respondents reported an increase in the backlog of disputes in the pipeline, citing a combination of court closures and lockdowns.
- Looking forward to the next two or three years, 41 percent of all respondents see new sources of disputes emerging because of COVID-19, environmental change, data privacy and emerging industries (including autonomous vehicles and cannabis).
- While reviewing and updating contracts stands as the leading practice to mitigate the expected litigation increase overall, 25 percent of respondents reported they would do nothing or continue current practices.
Introduced in 2004, this report is the longest-running survey of corporate counsel on litigation issues and trends. Norton Rose Fulbright's 16th annual Litigation Trends Survey was conducted by Acritas, a global legal services research firm.