Litigation burden rises for firms worldwide

A

ccording to an annual survey by US lawyers Fulbright & Jaworski, nearly 80% of UK firms surveyed faced some court proceedings last year. Worldwide, litigation costs have risen by 25%. US and UK firms faced average litigation costs of $ 12m and $lm respectively.

Construction firms face the highest litigation costs worldwide of any industry, with average expenses of $39m. Insurers have paid out S36m on average, while manufacturers have incurred costs of more than $ 14m.

Although the cost of litigation is not as high in the UK as across the Atlantic, the number of legal actions and their expense is rising fast.

'Despite the general consensus that the UK is not thought to be as tightly regulated as the US, UK businesses are experiencing more exposure to regulatory matters,' said Lista Cannon, Head of European Disputes at Fulbright & laworski. 'All companies must ensure they are prepared to address current regulator)' issues and anticipate future regulatory changes'

The most common sources of litigation are employment and contract disputes. While arbitration is considered a quicker way of resolving disputes than litigation, most firms believe there is little difference in terms of cost.

19 Read the text more closely and decide whether these statements are true (T)
or false (F).

1 Average litigation costs for British businesses are 12 times higher than those in the USA.

2 Building firms have the highest legal expenses worldwide.

3 Most businesses believe that arbitration is cheaper than litigation.

20 Read the text again. What is a major factor in the increased costs of litigation?

21 Match these words or phrases from the text (1-4) with their definitions (a-d).

1 to incur a a legal restriction imposed by a government administrative agency

2 to face / to address b a large sum of money which is paid to someone

3 regulation c to experience something, usually something unpleasant, as a result of

4 payout actions you have taken (e.g. costs)

d to give attention to or deal with a matter or problem (e.g. court proceedings or litigation costs)

Reading 5: Letter before action

22 In what different ways can a person's employment end? Which of these might result in litigation or arbitration? Discuss with a partner.

Read the letter on page 90 quickly and answer these questions.

1 What do you think the term constructive dismissal¹ means?

2 Why might Ms Loushe have a strong case for a claim for defamation?

Unit 8 Litigation and arbitration

Minchin & Lacey SOLICITORS

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telephone: +441405 738 59235 fax: +44 1405 738 59236 email: [email protected]

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OUR REF: CSK/DT-1

29 February 2008