December 10, 2013
A projected increase in business litigation in 2009 is being laid at the door of two employment-law trends: a surge of wage and hour litigation and a change in federal law that makes it possible for employees to file disability-related lawsuits even if their disabilities are correctable through medication or assistive technology.
A study by the international law firm Fulbright & Jaworski also found that although litigation is down, nearly four out of five companies reported being hit with a lawsuit in the past year, and one out of five organizations face 20 or more of them. Additionally, the overall cost from lawsuits seems to be holding steady, with 45 percent of companies reporting that they are spending at least $1 million on litigation costs annually, a slight uptick from a year ago.
Pending employment-related lawsuits were cited by 47 percent of companies in 2008, making them slightly more common than contract disputes, in which 46 percent of companies were embroiled. An additional 29 percent faced personal injury lawsuits.
Overall litigation costs for U.S. companies basically remained stable in 2008, though the decrease in the frequency of lawsuits suggests that they are costing more. Thirty-nine percent of U.S. companies spent $500,000 or less on litigation, while 15 percent spent between $500,000 and $1 million, 29 percent spent between $1 million and $5 million, 7 percent spent between $5 million and $10 million, and 9 percent spent $10 million or more.
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