A new report by international law firm and litigation group, Fulbright & Jaworski, has revealed that companies in the UK are operating in an environment increasingly littered with lawsuits. According to a survey carried out by the firm, a substantial 48% of UK organisaitons expect to face more litigation in 2006 than they did last year. Furthermore, two-thirds said they had been in court in the last 12 months, and cited particular concern over the growing number of product liability cases coming to the fore.
The 2005 Litigation Trends Survey, which looked at property and insurance, as well as the healthcare sector, found that larger organisations - those pulling in annual sales of $1 billion or more - are the most likely to face court actions, with more than 20 times the number of court actions brought against smaller groups and almost four times the number against medium-sized businesses.
“It is clear from the study that public liability and intellectual property is of growing concern to healthcare companies. All respondents said that product liability is on the rise,” Graham Simkin, a Fulbright & Jaworski partner, told PharmaTimes News Online. He explained that within the healthcare sector “in the UK, the most number of claims are related to contract disputes, which are also the most expensive type.” Contract disputes, which encapsulate a large variety of different types of disagreements, represent a “double-edged sword,” potentially leading on to battles over the important business cornerstone that is intellectual property.
Mr Simkin told PharmaTimes News Online that he believes that the explosion of electronic data storage has been a major factor in growing number of litigation all industries, as this has given rise to a “new huge volume of discoverable material.”
Electronic discovery of evidence is certainly becoming a significant cost burden in the USA, and this is filtering across the Atlantic to the UK, with 74% of all companies surveyed having litigation hold policies in place. These evoke immediate suspension of any scheduled destruction of records in the event of anticipated legislation. “This increase in electronic data storage is more beneficial towards the claimant, as there is the potential for the firm to settle early, representing yet another pressure on the business,” Mr Simkin explained. The study found that UK groups (23% of those surveyed) are much more likely than US companies (13%) to settle matters before court proceedings begin.
But findings of the survey revealed that UK companies are still under significantly less pressure than their USA-based peers, where a staggering 75% of respondents have faced at least one court action filed against them over the last year. And, according to Mr Simkin, the differences in the countries’ legal environments will prevent the UK from seeing a similar degree of healthcare litigation cases currently sweeping the USA. “I don’t think we will follow the USA in plethora of cases we are seeing there,” he stated, but conceded that certain trends, such as the increase in product liability battles, are feeding through to the UK.