Study Also Surveyed Most Prevalent Types Of Class Actions, Risk Evaluation Factors, Settlement Percentages, And Use Of Class Action Waiver Arbitration Clauses.
Carlton Fields has published its seventh annual Class Action Survey, which surveyed more than 400 general counsel and chief legal officers in U.S. companies about class action trends for the 2017 year. Its findings are edifying in nature.
From a high-level executive perspective, class action defense spending has been rising steadily in the last 3 years, reaching its highest level (in 2017) since 2010. In 2017, class action spending went up about 5% from the previous year, namely, 53.8% in 2016 to 59% in 2017, as measured by the percentage of companies managing class action cases out of the total surveyed population. The surveyed companies projected spending $2.24 billion defending themselves in class actions, which was 11.4% of all litigation spending (which total spending came to $19.7 billion for the companies).
Labor and employment matters were the most common type (24.7% of matters and 21.6% of spending), consumer fraud clocked in at #2 (18.2% of matters and 18.9% of spending), while products liability and antitrust came in respectively at #3 and #4. These four categories accounted for 2/3rds of all the class actions. Interestingly enough, despite the publicity generated with respect to data privacy cases, fewer than 25% of the business population surveyed have faced class actions in this area.
For purposes of evaluating the risks presented by class actions, exposure not surprisingly was the prime factor considered in the evaluation calculus.
Class action settlement rates for 2017 increased from 62.5% in the previous year to 70.8%, with 37.5% settling after the class certification stage of the litigation.
Also, 37.2% of responding companies used class action waivers in arbitration agreements for 2017, up from 30.2% in 2016. Around a third of the companies believe that favorable changes were coming in the class action area based on anticipated changes to the U.S. Supreme Court constituency.