Sixty-five percent of survey respondents said they had filed at least one lawsuit during the past year, a five percent decline from 70 percent in 2006 and 88 percent three years ago.
The survey found that companies are also defending fewer lawsuits. Seventeen percent of the surveyed company attorneys said they had not defended a new lawsuit in the past year, an increase from 11 percent just last year.
Fulbright litigation chairman Stephen Dillard notes, "What we're seeing is fewer cases and that's a reflection of the economy,'' Dillard says companies typically file fewer lawsuits when the economy is healthy.
The decline in new lawsuits appears to parallel a recent drop in the filing of securities fraud lawsuits, which fell to a 10-year low in 2006 of just 120 lawsuits filed that year, according to the Stanford Law School Securities Class Action Clearinghouse and Cornerstone Research.
The survey findings have been witnessed first-hand at Fulbright, whose own litigation load has noticeably lightened. Says Dillard, "We've seen fewer filings in the last year, although the size of the cases continues to increase."
Despite the decline in filings and lawsuits, the survey noted that companies continue to face large litigation dockets. While 33 percent of respondents reported managing more than 25 cases at once, 18 percent said they’re handling more than 100 cases simultaneously.
Because the survey was conducted a couple of months before the sell-off in credit markets last August, Dillard says the downtrend must be taken with a grain of salt. "This word of caution: the poll was taken before the credit crunch came to the fore. We might have to temper our findings for next year," He added that the market turmoil could result in companies turning to litigation as banks face write-downs on their loans and bankruptcy may loom for some companies.
Among different industry sectors, manufacturing and insurance companies faced the highest number of lawsuits. The survey found that approximately 54 percent of insurers surveyed had more than 20 cases involving more than $20 million in dispute. Manufacturers and insurance companies also paid the most for litigation, with 43 percent of manufacturers and 31 percent of insurers saying they spent more than $5 million on litigation each year.