Dive Brief:

• Nearly two-thirds of GCs and in-house counsel said their organizations faced labor and employment disputes last year and more than half cited such issues as one of the most concerning litigation areas in the year ahead, according to Norton Rose Fulbright’s 2023 Annual Litigation Trends Survey.
• Meanwhile, 42% of respondents cited cybersecurity, data protection and data privacy as a concerning litigation area in 2023, with only labor and employment disputes being a greater area of concern.
• Survey respondents on average allocated 22% of their annual litigation spend to personnel and other in-house expenses last year, compared to 14% in 2021. Additionally, more than one-third of respondents expect the number of in-house litigators at their companies to increase in 2023, the report said.

Dive Insight:

The return to in-office work is one likely driver of the significant in-house concerns about labor and employment disputes, with 35% of respondents expecting more exposure to such issues in 2023.

Return-to-office policies can lead to more litigation involving allegations of discrimination and harassment, according to the 18th edition of Norton Rose Fulbright’s litigation trends survey.

Meanwhile, remote work and hybrid schedules present employers challenges around employment termination.

“This includes everything from trade secret theft to complaints going out the door and severance negotiation,” Jamila Mensah, a Norton Rose Fulbright employment partner, said in the report. 

Employers are also concerned about unionization efforts, including in industries that have historically been immune to such activity, Josh Henderson, a Norton Rose Fulbright employment and labor partner, said in the report.

Meanwhile, data breaches, ransomware and other cyberattacks are fueling concerns about cyber-related disputes, as are the growing sophistication of the attacks, the report found. 

“Related litigation ranges from claims of negligence and fraud to criminal prosecutions over efforts to conceal cyberattacks,” the report said. 

Regulation and investigation matters were the third most common type of litigation last year, according to the survey. 

Roughly 48% of respondents said their organization experienced this type of litigation, and 41% cited it as among the most concerning litigation areas in 2023. 

“Activity from state attorneys general, the Department of Justice and the SEC continues to ramp up,” Norton Rose Fulbright partner Christopher Pelham, whose practice focuses on regulatory investigations, said in the report.

Class actions

Workplace and cyber-related issues also were top concerns for in-house counsel in the area of class actions.

More than half of the respondents who said they faced class actions last year reported they involved labor and employment issues.

Heightened scrutiny around pay equity has employers concerned about class actions, according to the report. 

Additionally, the report highlights that some in-house counsel have tried to mitigate the risk of class actions by having employees sign arbitration clauses.

Slightly more than one-third of those respondents whose organizations faced class actions last year said they were in the cybersecurity, data protection and data privacy domain.

The report noted that the largest cyber and data-related class actions involve the California Consumer Privacy Act (CCPA) and the Biometric Information Privacy Act (BIPA) in Illinois.

A proposed SEC rule on mandatory cybersecurity disclosures could also deepen exposure for publicly traded companies, according to the report.

“Concerns about the looming threat of cyber-related class actions come as escalating corporate data breaches and ransomware attacks against organizations present additional opportunities for litigation,” the report said.

This year’s report is based on the results from the surveying of more than 430 general counsel and in-house litigation leaders based in the United States and Canada in October and November 2022.