Litigation trends

Oil & Gas Journal's "General Interest" section includes stories about economics, government, health, safety, and the environment, companies, and personnel moves and promotions. Among these news stories are occasional pieces about lawsuits and legal challenges from environmental and other groups-and the fallout that comes from years of legal wrangling.

A recent survey provides unique insights into the litigation issues and trends that are affecting businesses worldwide, from the most common types of cases faced by companies to the approaches taken in managing disputes.

Norton Rose Fulbright's most recent 2015 Litigation Trends Annual Survey-the company's 11th-polled more than 800 corporate counsel representing companies from 26 countries and a wide range of industries including energy and mining.

Industry highlights

The survey, conducted during yearend 2014 to early 2015, found that energy companies were more likely (21%) to rank environmental-toxic tort litigation as a top dispute-type than all respondents (7%). Only 4% of all respondents indicate that they have initiated a proceeding with more than $20 million at issue. Energy companies are the most likely to have done so, with 10% indicating that they have initiated such a large proceeding.

Energy, at 21.1, and infrastructure, mining, and commodities industries, at 13.5, have the smallest litigation staffs on average. The survey noted that energy companies reported fewer in-house lawyers than the survey in general. The average energy company had 12.1 in-house lawyers in 2014 compared with 16.3 for the survey overall. However, energy companies were more likely to have increased the number of outside firms on their rosters in 2014 (32% to 22% overall). Energy industry respondents (55%) are the least inclined to prefer using a single firm.

Thirty-eight percent of energy company respondents also were more likely to have been a party to arbitration in 2014 compared with companies in the overall survey (26%). But energy companies were less likely than other companies to be involved in IP lawsuits or proceedings. They ranked contracts disputes among the most numerous type of dispute they faced in 2014, with 47%, well above the overall survey average of 28%.

Energy companies rated regulatory-investigations (44%) and contracts (45%) as major concerns for the future. In both cases, this is well above the overall survey percentage (39% for regulatory-investigations; 34% for contracts). Only 17% of energy company respondents said that labor-employment issues are a concern.

Infrastructure, mining, and commodities companies ranked contracts as the most frequent area of dispute in 2014, with 57% of respondents selecting it from among the possible choices compared with just 28% of companies in other industries. That was followed by labor-employment at 27% and regulatory-investigations at 13%.

Contracts were also ranked as the top concern going forward, with 50% of infrastructure, mining, and commodities respondents making that selection compared with just 34% of overall respondents. Infrastructure, mining, and commodities respondents also were more concerned about company-commercial construction issues (21%) than other companies (8%).

Regional trends

The survey concluded with forward-looking trends and asked, "In your view, what is the most important issue or trend in litigation impacting your company?" The trends were reported by country.

"The recent Supreme Court of Canada's decision on good faith obligation in contracts," answered a general counsel from a Canadian energy company. A general counsel from a Malaysian infrastructure, mining, and commodities company stated, "Frivolous legal actions claiming extortionate amounts-a sign of a more litigious society."

Companies based in the US noted class actions and employment as important trends. Firms in the UK, meanwhile, said important trends include litigious environment and labor matters. Australian firms cited class actions, increasing legal costs, and a more litigious environment as important issues. German companies, meanwhile, said it was the increasing use of alternative dispute resolution and increasing class-action volume. French firms noted class actions, higher litigation volume, and more contract litigation as trends. The survey also concluded that most respondents expect foremost to be litigating in their own regions.