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GCs Report More ‘Bet the Company’ Lawsuits, Survey Finds

Nov. 25, 2015, 9:50 PM

The number of companies facing high-stakes litigation increased during the last 12 months, according to a survey released earlier this month.

AlixPartners’ Annual Litigation and Corporate Compliance Survey polled 242 general counsel and compliance officers from U.S. and European companies that have annual revenues of at least $250 million.

Eleven percent of respondents indicated their organizations were involved in a “bet the company” lawsuit over the last year, compared to only eight percent in the previous year’s survey.

Twenty-two percent cited regulatory/investigatory issues as the focus of their “bet the company” lawsuits, up from only six percent previously.

Conversely, the survey found a significant drop in the percentage of respondents that cited antitrust and class actions as the focus of such litigation.

Cross-Border Litigation Rising

Almost a third of the respondents (32 percent) reported an increase in the number of commercial legal disputes at their organizations over the past 12 months. An additional 57 percent reported that the number of disputes had stayed the same. Only 12 percent of the respondents reported a decline.

Meanwhile, 24 percent of the respondents said their companies experienced an increase in disputes involving overseas partners or cross-border transactions.

“Companies, particularly those that operate overseas, are conducting business in a challenging regulatory and enforcement environment,” Harvey Kelly, managing director and global head of AlixPartners Financial Advisory Services practice, said in a press release.

Commercial Litigation

In other findings, survey respondents said the most common types of commercial disputes their organizations were involved in included:

• contract (57 percent);

• employment (38 percent);

• intellectual property or patent infringement (29 percent);

• tax (20 percent).

The survey also indicated that despite the uptick in cross-border and high-stakes legal fights, litigation spending is not growing as fast as in the previous year.

Thirty-seven percent of the respondents said their organizations increased spending on litigation in the past 12 months. In AlixPartners’ 2014 survey, 47 percent of the respondents said they saw an increase.