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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