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LEGAL ISSUES

More Lawsuits Expected

Business owners fear the uncertain climate will spur legal and regulatory disputes.
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After a steady decline in lawsuits and government probes, U.S. firms are expecting the uncertain economy to spur more legal and regulatory disputes, a new survey finds.

Thirty-four percent of 251 corporate law departments surveyed said they were bracing for a spike in litigation in the months ahead, according to Fulbright & Jaworski, a Houston-based international law firm. Billion-dollar firms were especially wary, with 43 percent expecting to face more legal disputes, the survey found.

"This year's survey appears to mark an inflection point for American business, between the end of a prolonged period of prosperity and the start of a period of economic challenge that is likely to fuel litigation over who is to blame and who should pay for the consequences," Stephen Dillard, chair of Fulbright's global litigation practice, said in a statement.

At the same time, business owners are worried about a rise in government regulations. Twenty-five percent of respondents said they were expecting an increase in the number of regulatory proceedings, while 34 percent of large companies were forecasting a bump in government action.

Among smaller companies with revenue below $100 million, 47 percent reported facing no new lawsuits last year, compared to 27 percent of midsized firms and 11 percent of big corporations.

To cope, businesses are beefing up their in-house counsel and committing more financial resources to litigation, Dillard said.

"You have numerous actions -- patent, product liability or toxic tort -- that tend to strike some industries more often than others, combined with widening strains of workplace suits such as wage-and-hour and privacy that are hitting everyone, added to a growing array of enforcement agencies knocking at the door," Dillard said. "It's no wonder that companies are spending as much time and resources on litigation issues as ever before."

Last updated: Oct 15, 2008




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