View this article online: https://www.claimsjournal.com/news/national/2024/03/25/322615.htm

Study: Percentage of Companies Facing Class Actions at Highest Level in 13 Years

Class action spending increased to nearly $4 billion, making it one of the fastest-growing areas of legal spending in 2024, a new study shows.

Carlton Fields released its 13th annual Class Action Survey, which provides an overview of important issues and practices related to class action matters and management. The annual publication reports on historical trends captured since the inception of the survey and includes information related to emerging issues in class action litigation.

This year’s survey found that the percentage of companies facing class actions has reached the highest level in 13 years. Corporate counsel are anticipating unprecedented growth for their class action dockets in 2024 and are adding headcount to manage these new matters.

Other key highlights in this year’s survey include:

• Labor and employment is the single largest component of both matters and spending by a wide margin. Consumer fraud takes a clear second place. Securities edges out product liability and technical statutory violations.
• The percentage of settlements continues the path down to nearly half. Companies report little interest from plaintiffs, complex claims, and a time-consuming workload as the main reasons. Alternatively, the few settlements reached in 2023 were dominated by individual settlements, which surged to 77%. Confidentiality and avoiding precedent were major motivators for the increase.
• Only 38.2% of companies with class actions used alternative fee arrangements. AFA usage remains at historically lower levels.
• Data privacy dominated the expected class actions arising from the use of generative AI. Additionally, nearly 62% of companies believe outside counsel should use generative AI in some way.
• Two-thirds of companies expect class actions will become more complex through larger and novel claims including: AI-related, labor, data privacy, deglobalization, social media usage, and creativity from plaintiffs’ attorneys.

The 2024 Carlton Fields Class Action Survey is based on interviews with general counsel or senior legal officers at more than 300 Fortune 1000 and other large companies across a variety of industries.