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Companies spending more to defend class action lawsuits

Businesses in California and across the country are paying more to defend themselves from class action lawsuits, even though there are fewer such cases than in the past. In many cases, the issues involved are often complex and expert-heavy. Between 2010 and 2014, companies spent decreasing amounts to defend themselves in these types of cases. However, from 2014 to 2018, spending has steadily increased once again, reaching $2.46 billion in legal costs in 2018.

Fewer businesses reported facing these types of class action lawsuits in 2018, but those companies that did report cases had more to worry about. The average number of litigation matters addressed by each company rose to 7.8 from an average of 6.3 one year earlier. The information was derived from a survey of 395 legal officers or general counsel at Fortune 1000 and other large companies with average annual revenues of $14.8 billion. Class action lawsuits may address a wide range of issues but the most common ones involve wage and hour issues or other employment law concerns. These cases consumed 26.1 percent of total spending and accounted for 28.7 percent of all of the cases.

Another rising area of concern for companies is their obligations to protect consumers against data breaches. Some are worried that the California Consumer Privacy Act could open up new arenas for domestic litigation on this issue.

Class action lawsuits and their defense are only one part of an overall litigation strategy for a business. A business litigation attorney can help corporate clients to handle a range of matters, including disputes with shareholders, executive severance concerns, intellectual property issues. or problems with customers or vendors.

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