Now in its fourth year, the annual Carlton Fields Class Action Survey continues to offer insight into the prevalence, cost, and type of class actions that companies face, plus observations on the shifting strategies they use to manage them. As in past years, class actions—across industries and practice areas—present legal departments with sizable risk. But increased familiarity with these matters has yielded better and more innovative matter management and cost control tools to defend against them. This is true even as the type and nature of class actions have evolved.
Our 2015 survey results from detailed interviews with general counsel or senior legal officers at nearly 350 companies of all sizes and business types. They shared thoughts and best practices on class action exposure and management. We trust that their valuable insights will, in turn, help your company and its legal department effectively and efficiently manage these prevalent, costly lawsuits.
Across industries, companies spent $2 billion on class action lawsuits in 2014, slightly less than the $2.1 billion they spent in 2013. This year, spending is expected to return to 2013 levels.
Companies’ class action dockets increased on average by one new case in 2014, bringing the average number of class actions...
Class Action Spending and Budgets
The world’s largest companies spend $20.2 billion annually on litigation in the United States. Of this sum, approximately $2 billion goes toward class actions.
Class actions comprise the fourth largest segment of the $20 billion market for litigation services in the United States, following...
How Companies Manage Class Actions
More than one in three companies, up significantly from one in four last year, report managing multiple class actions on a regular basis. Experienced companies work with their law firms to develop formal, established class action protocols, including early case assessment, sophisticated analysis of potential financial exposure, and proactive tracking of major decisions impacting class actions.
How Companies Approach Class Action Risk
Companies defending class actions face a variety of risks. When asked to assign importance to these risks on a scale of 1-to-10, corporate counsel gave by far the highest ranking, 9.1, to the extent of exposure. Win probability was next at 8.0. Among the nine risk factors considered, defense cost was the least important (5.6 on the 10-point scale), consistent with the high stakes involved...
The Impact of Recent Class Action Rulings
Recent class action rulings continue to benefit class action defendants. The 2011 Supreme Court case, Wal-Mart v. Dukes, which was cited by nearly 32 percent of in-house counsel, still has the greatest influence on class action management. It increased the level of scrutiny given to each class action, requiring courts to engage in a rigorous analysis of whether the plaintiff...
Best Practices to Control Class Action Costs
More than 86 percent of companies conduct early case assessments, and more than half of them describe outside counsel as essential to the process. These companies involve outside counsel from case inception for help with such tasks as risk assessment, exposure evaluations, key issue isolation, interviews of key witnesses, and development of strategy and scenarios.