Manufacturers: Litigation Costs Growing
Ultimately, the typical U.S. company reported spending an average of $14.3 million on litigation in the past year. Billion-dollar companies on average find themselves fielding 556 cases at any given time, with 50 new suits cropping up annually. Nearly a third of U.S. manufacturers expect their caseloads to increase in future years.
According to the study, now in its 3rd year and based on responses from 422 companies worldwide, product liability disputes represent manufacturers' greatest concern, with 66 percent of respondents listing them among their largest worries. Other legal headaches include labor and employment disputes (51 percent), patent disputes (40 percent), contracts (34 percent) and environmental torts (29 percent).
Alas, manufacturers can't really complain, because they are also doing their part to enrich the legal community, with 70 percent of those surveyed saying they have initiated legal action against another company in the past year. Approximately 66 percent of manufacturers have also undertaken some kind of internal investigation requiring the assistance of outside counsel.
Not surprisingly, with big business comes a big litigation price tag. Billion-dollar companies on average commit $19.8 million to litigation annually, with approximately 58 percent of larger companies spending more than $34.2 million. More than two-thirds of large companies surveyed reported being involved in at least one new suit involving $20 million or more in claims.
Fortunately for smaller firms, the costs are generally far less-though still daunting. On average, companies with revenues under $100 million reported only nine cases pending, with total annual dispute spending of around $178,000.
Although the majority of cases are in U.S. courts, the tide of international disputes is rising. Specifically, more than one-third of companies said that up to 20 percent of their dockets originate in foreign venues. Study authors cite this statistic as proof that U.S.-style litigation is "going global."
For more on the study visit Fulbright & Jaworski at www.fulbright.com.