Corporate legal departments were once viewed as little more than an internal law firm. They handled legal problems in relative isolation, largely cut-off from the company’s commercial activities. Today, in-house legal teams are increasingly seen as an important and inseparable component of the company’s business team.
With this shift has come an expectation that legal departments do more than react to legal problems as they arise. They are expected to proactively monitor litigation trends, looking for clues in the evolving legal landscape to help the organization better position itself or even pre-empt potential problems before they develop.
Trend watchers agree that the wide range of issues related to COVID-19 will continue to command considerable attention in the near future. The challenging environment of the last year has resulted in a variety of contract and commercial disputes as well labor/employment issues. In addition, COVID-19 can be expected to impact the nature and frequency of worker’s compensation claims, insurance coverage disputes, legislative changes, loan defaults and bankruptcy filings.
Many believe the reopening of the economy will also see the filing of legal disputes predating the pandemic. Numerous potential litigants delayed pursuing lawsuits while focused on other concerns over the last year. For others, recent difficulties have made pursuing certain disputes now critical enough to be worth the trouble and expense of litigation. In short, issues you thought were behind you may be returning.
Cyber-security and data protection are also areas of increasing concern. A network shutdown, whether caused by a deliberate attack or an innocuous technology issue, can bring businesses to a halt and engender significant litigation risks from numerous angles. Laws regarding digital security are still evolving and that uncertainty only adds to the risk. Additionally, a large data breach is almost always followed by a class action.
Consumer-friendly statutory protections in some jurisdictions can make the fallout from data breaches particularly problematic.
Speaking of class actions, securities fraud and false advertising claims continue to be a source of numerous cases. For both of these areas, it is relatively easy for the vigilant to monitor claims being raised within one’s industry. If a competitor is facing such a claim, it is a safe bet your organization should recognize and address the possibility of similar claims.
Counsel for product manufacturers, distributors and retailers know they are always exposed to a variety of claims, from economic losses to personal injuries. In-house counsel should take note of litigation involving competitors. A telling recent example is Volkswagen’s “Dieselgate” woes spreading until similar claims were also alleged against every one of its competitors.
Part of monitoring litigation trends is keeping up with developments in insurance litigation and coverage. COVID-19 and the rise of cyber-attacks are two easy examples to highlight how quickly and dramatically things can change. It is critical to continually reassess insurance coverage against potential litigation risk. Policies purchased for yesterday’s problems may not be appropriate for tomorrow’s lawsuit.
If your company is facing uncertainty because of litigation and you would like to explore strategies to minimize that uncertainty, please contact us to discuss how we may be able to help.