Manufacturers hit hard by litigation; survey reveals 91% faced new lawsuits last year

For the past four years, the prominent Washington, D.C.-based law firm of Fulbright & Jaworski has been conducting its annual Litigations Trend Survey, and once again manufacturers topped the list of industries hardest hit by lawsuits and legal action. According to the survey, 91% of manufacturing companies faced at least one new lawsuit last year, with more than half (56%) facing more than...
By Control Engineering Staff December 1, 2007

For the past four years, the prominent Washington, D.C.-based law firm of Fulbright & Jaworski has been conducting its annual Litigations Trend Survey, and once again manufacturers topped the list of industries hardest hit by lawsuits and legal action.

According to the survey, 91% of manufacturing companies faced at least one new lawsuit last year, with more than half (56%) facing more than 20 new suits in the past year. Labor, product liability, and environment were among key issues.

The survey, based on interviews with in-house counsel at 250 major U.S. corporations, takes a macro look at the landscape for business disputes in the U.S. and U.K. It reports on findings from multiple industries, and uses breakdowns by company size and region. Numerous topics are included, from the most prevalent types of lawsuits that businesses face to what new legal burdens impact their budgets.

Forty-two percent of the American manufacturing companies surveyed reported facing at least one $20 million action. Litigation has become a major line item in manufacturing company budgets. More than 40% of manufacturing firms in the study reported that they spent at least $5 million on litigation, excluding costs of settlements and judgments, while 70% spent more than $1 million per year on business disputes, again, the most of any industry surveyed.

Key manufacturing industry findings showed that manufacturing companies’ in-house law departments reported labor/employment matters (68%) were their biggest concern, followed by product liability (53%), and environmental/toxic torts (44% each). More than a quarter (26%) of manufacturing firms expect their case load to increase next year.

The survey also revealed that manufacturers were not immune to legal concerns of a headline-grabbing nature, citing that 29% of manufacturing companies surveyed have considered launching an internal investigation into stock options backdating issues.

To download a copy of the survey, visit www.fulbright.com/index.cfm?fuseaction=correspondence.LitTrends07 . And for additional coverage of legal issues affecting the manufacturing community, be sure to read Mark Voigtmann’s Legalities column in Control Engineering and online at www.controleng.com .