Board Members Demanding an Increasing Amount of Legal Advice.
01 December 2011
LONDON, 30 NOVEMBER 2011 -According to Litigation Research board members are increasingly concerned about regulatory compliance and bribery according to research from lawyers Hogan Lovells and Legal Week. 53% of senior in-house lawyers have seen an increase in the level of legal advice required on these issues and 40% of General Counsel who responded sit on the board. The research also highlighted the growth of international disputes, with a quarter of respondents saying they were experiencing more cross-border litigation in the past 12 months.
Lawson Caisley, litigation partner at Hogan Lovells, commented:
"Litigation can have a significant financial and reputational impact on any business. It may also raise issues for regulators who could then launch their own investigations. In view of the more aggressive regulatory environment, and the increased risk of disputes arising out of the adverse economic conditions, it is no surprise to see boards looking for more legal comfort.
"It is also understandable why the biggest impact on litigation that the recession has had for our respondents is the faster settlement of disputes (26%) and the handling of more disputes by in-house legal teams (25%)."
About the report
Hogan Lovells commissioned Legal Week to conduct the survey into attitudes of major corporates to litigation, predictions for the future and litigation trends. The survey was conducted in September 2011 amongst 203 General Counsel and Heads of Legal. 84% were based in the UK and 30% of respondents worked in an organisation with a turnover of over £1bn.
The research involved more than 200 mainly UK-based general counsel and heads of legal.
Key research findings:
Advice to the Board
- 40% of general counsel now sit on the board and over a third (36%) always attend board meetings
- The most common reason given for the surge in board-level advice were: the introduction of the UK Bribery Act and regulatory compliance
- 26% have experienced more litigation in the past 12 months
- 46% have seen an increase in international disputes
- When asked to identify jurisdictions in which their litigation experience had been worse than the in UK, Italy topped the list (36%), followed by France (30%), India (28%), China (27%) and the Middle East (27%).
The financial impact
- Almost one fifth of corporates (19%) spend more than 70% of their total legal spend on dispute resolution. 53% spend more than 20%
- 28% say that legal spend has increased over the past 12 months
- 51% have instructed the Bar directly - 26% of those do this more than a few times a year
Michael Roberts, a Hogan Lovells litigation partner with a particular focus on fraud and corruption, added: "Regulatory compliance and corruption issues can result in significant financial risk and damage to reputation, not to mention personal exposure for individuals. The UK now has one of the most stringent anti-bribery laws in the world and, whilst it’s still early days, there has been a very conscious attempt to overhaul the UK’s enforcement record."
Francesca Rolla, litigation partner in the Milan office added: "One of the main problems UK companies find is that litigation tends to be slower in Italy than in the UK and that most deadlines set by the court cannot be extended on motions by the parties. This makes Italy a jurisdiction where it is better being a defendant rather than a claimant.
"In addition, in some of the smaller courts judges may be less experienced than judges in major courts and - in complex litigation which require non-legal technical knowledge - they tend to appoint court experts (who may also be less experienced than experts in major courts), something which affects the length and cost of litigation."
For more information on the report, visit www.hoganlovells.com/litigationbenchmarker
About Hogan Lovells
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