Andrew Foyle

Shoosmiths recently published its report on major trends in UK litigation. Drawing on feedback from 360 general counsel/senior-in-house lawyers working in businesses with a £100m+ turnover, I believe the report makes very significant reading for all involved in litigation practice in Scotland and the UK.

The questions put to respondents included what key areas of litigation risk they foresaw in the next three years; how they allocate resources in response to those risks; and what in-house teams are doing to anticipate and mitigate exposure. The responses are illuminating.

A key finding is that litigation cases are on the rise north and south of the border. More than 25 per cent of in-house legal teams (including legal counsel working in technology, telecoms, automotive, and financial services) expect to be dealing with claims in Scotland in 2024. Statistics for England & Wales shows that respondents also expect 41 per cent of their cases to be heard in that jurisdiction this year.

Notably, 17 per cent of respondents also expect to be engaged in disputes north of the border for the next three years. This feedback from industry, collated in summer last year, suggests litigators will have a busy in-tray for the foreseeable future.

If this is the case, it’s heartening to note that 75 per cent-plus of the respondents also expect to increase their headcount in response, and 82 per cent expect to increase spending on dispute resolution over the next three years.

However, the research also sheds light on key challenges for both in-house legal teams and their corporate board rooms. Interestingly, the research suggests Boards and general counsel (GC) are not fully aligned on risk. UK-wide, only 13 per cent of GC/senior in-house lawyer respondents felt that they aligned extremely well.

At a time when UK and international business is increasingly concerned about the impact of malevolent cyber activity, the report data also flagged that GC’s and boards disagree on the significance of potential data breaches. While 38 per cent of GCs surveyed stated that data breach follow-on litigation is a top concern for their board, many GCs and legal teams regarded this issue as less worrying.

The report has shone a light on the fact more work needs to be done by many major businesses to identify future areas of risk. Indeed, according to Shoosmiths’ findings, 64 per cent fail to undertake trend analysis in their sector. Half don’t undertake horizon scanning for upcoming legal changes.

Trend analysis is invaluable for a major business. It can pinpoint emerging areas of risk in areas like supply chain disputes, environmental litigation, class actions in the automotive space and Consumer Duty and commission claims in the financial services sector.

There is much to digest in the 23-page report and it’s encouraging that the critical importance of litigation is recognised in the boardroom. However, it’s concerning that respondents also indicated many of their firms have a disjointed approach to mitigating litigation risk, specifically in terms of internal training, litigation preparedness reviews and contract audits.

How does a GC respond to this landscape? There are various steps which businesses can take immediately to prepare for the rising tide of litigation. Spending more time on litigation risk analysis and horizon scanning is a quick win. Proactively checking contracts for vulnerabilities, including embedding comprehensive document creation, retention and deletion policies as necessary would also be sensible.

However, the most effective response is training. Ensure staff understand the risks, are prepared to react to litigation and are given tools and resources to respond effectively.

Andrew Foyle is a solicitor advocate at Shoosmiths in Scotland. This article first appeared in The Scotsman.