Among U.S. businesses, insurance companies spend the most on litigation and take the second highest number of cases to arbitration, according to a survey of corporate counsel in America.

Fulbright & Jaworski, an international law firm based in Houston, said their findings came from a survey that contacted 354 corporate counsel in a wide range of industries in 45 states and the U.K. about their top litigation concerns.

The study also found:

o On average, individual insurers are currently engaged in 39 lawsuits, five of which they initiated;

oNearly one quarter of insurance companies have legal budgets of over 2 percent of their total gross revenue and for 23 percent of the respondents, litigation costs represent more than 50 percent of their legal budgets--by far the most of any industry.

oInsurance litigation and contracts issues were the two main areas of lawsuits for insurance companies, followed by labor/employment and professional services actions, the law firm said, adding that these remain top future concerns for insurance counsel--along with class action lawsuits.

oAlthough insurance companies were on the lower end of the scale in comparison to other industries when it came to the number of lawsuits filed during the past year, the industry held the number-two spot in terms of arbitrations initiated.

Forty percent of businesses, the survey found, don't quantify dispute spending, but those that do report that litigation costs an average of $8 million a year.

Counsel who were surveyed said they are most concerned about contract disputes and labor/employment claims, with regulatory compliance among the new worries emerging.

Nearly 90 percent of U.S. corporations were found to be engaged in some type of litigation, and the average company reported 37 U.S. lawsuits. For $1 billion-plus U.S. companies, the average number of cases was found to be 147.

The law firm study reported that close to 90 percent of U.S. corporate counsel have no plans to reduce the number of outside lawyers that handle their cases.

According to the survey, corporate counsel are so concerned about controlling litigation expenses that the costs worry them more than whether they win or lose the underlying lawsuits.

Just under 40 percent of the respondents admitted they are unable to predetermine the costs of managing business disputes and could not quantify their litigation budgets in relation to their overall legal budgets.

In companies with revenues under $100 million, 17 percent of all counsel surveyed said they had no budget at all for litigation costs. Over a quarter of corporate counsel in companies with revenues of $1 billion or more said they did not know their litigation budgets.

The full survey results can be accessed online at http://www.fulbright.com/media/litigation.

Special Reports /

Survey Examines Insurer Litigation Spending

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