Corporate litigation remains a major risk facing companies in Europe and the United States, according to a recent survey of compliance officers and general counsel by AlixPartners.

The New York-based consulting firm’s 2014 Litigation and Corporate Compliance Survey revealed that overall 88 percent of respondents in Europe and the U.S. said the amount of legal disputes their companies faced in the past year has either stayed the same or increased. Roughly 8 percent of all respondents said their companies were involved in “bet-the-company” lawsuits in the previous 12 months, down slightly from the 10 percent in the 2013 survey. That was slightly higher in Europe, with 11 percent of respondents reporting “bet-the-company” lawsuits in the past 12 months. Most of those major lawsuits in Europe involved contracts (71 percent) or class actions (57 percent).

The survey, conducted in June, included corporate counsel and compliance officers from companies with annual revenue of at least $250 million and representing 20 major industries. About a third of respondents were from European companies. The survey was reported on the FCPA Blog.

Contract issues led the way in the type of commercial dispute reported overall by respondents, with 58 percent, followed by employment (50 percent), intellectual property or patent infringement (33 percent), accounting, financial reporting, and disclosure (19 percent), and insurance (19 percent). Respondents were allowed to select more than one category. Regulatory and investigations (excluding corruption), data privacy and protection, and bankruptcy and restructuring all came in with 18 percent each.

Overall, 82 percent of respondents said their companies were more likely to settle a case rather than go to court, a slight decrease from last year’s result of 89 percent.

A little less than half of those polled (47 percent) said their companies’ spending on litigation increased over the past year, with another 34 percent reporting the size of their litigation department grew over the past 12 months. About 45 percent reported that their companies are retaining more work in-house rather than farm it out.

In Europe, there also was an upward trend for cross-border disputes or legal issues involving overseas business partners. Roughly 58 percent of European respondents said the level had stayed the same during the past year while 33 percent reported a slight increase and 2 percent reported a significant increase. Only 15 percent of U.S. respondents reported an increase in cross-border disputes.

Arbitration also was more frequent for the European responders, with 33 percent reporting their company had been involved in one or more arbitrations in the past year, compared to 24 percent for U.S. respondents, the survey revealed.

Overall, 45 percent of those surveyed said it is extremely important for their legal departments to manage risk proactively. In Europe, ways of managing that risk include education and training programs (73 percent), reviewing existing compliance programs (55 percent), and reviewing business units (52 percent).

“Potential litigation and commercial disputes remain viable potential threats for companies globally,” the report said. “At the same time, regulators appear to have become more proactive in efforts to take disciplinary action on corrupt business practices such as fraud. Given the heavy costs associated with ensuing investigations or lawsuits, decision making around dispute resolution and risk management may remain at the top of the agenda for companies and their counsel.”

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