Unsurprisingly, the US is even more litigious: 75% of US respondents faced at least one court action in the past year.
The firm notes that the trend towards greater mediation in UK legal cases following the Woolf Reforms may explain the fact that UK companies (23% of companies surveyed) are much more likely than US companies (13%) to settle matters before court proceedings begin.
Approximately 60% of UK companies (compared with 51% in the US) have resolved disputes in a multi-step process that entails direct negotiations between senior executives, mediation and arbitration. Larger companies in particular (94% of companies surveyed) believe that cost savings can be made through dispute escalation.
Fulbright canvassed the views of 354 in-house lawyers, including 50 from the UK, in researching its 2005 Litigation Trends Survey. It found that both US and UK firms are increasingly concerned about the trend towards more litigation, particularly in relation to costs.
Lista Cannon, head of European disputes at Fulbright & Jaworski, said: "The concern over litigation costs is certainly one point where there is trans-continental agreement. Although the UK system of requiring the losing litigant to pay the winner’s costs can help prevent frivolous litigation out of fear of bearing the other side’s legal bill, our report indicates real concerns over spiralling fees still exist among UK businesses. This anxiety can only be compounded by the increasing number of court actions they anticipate facing."
Larger organisations and businesses in the property, insurance and healthcare sectors are the most likely to face court actions. Companies with $1 billion or more in annual revenues face more than 20 times the number of court actions brought against the smallest companies and almost four times the number faced by medium-sized companies.
The average company with US$1 billion in gross revenues faces more than 147 cases at any one time, according to the report.
The most costly type of litigation for companies in the manufacturing, energy and technology/communications sectors relates to intellectual property, while personal injury litigation and regulatory matters were rated second and third by the energy industry.
Technology and communication companies in the UK see their biggest risks as coming from IP and employment cases, while UK manufacturing and insurance companies were more concerned about the rising trend in group and class actions.
Electronic discovery of evidence is becoming a significant burden in the US, and is beginning to appear on the radar of UK organisations too.
Three-quarters (74%) of all companies surveyed have "litigation hold policies" in place. These evoke immediate suspension of any scheduled destruction of records in the event of anticipated litigation. Four in five (82%) have "written records retention policies" in place.
