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In-house legal departments are facing growing challenges in 2013 from trade secret thieves, energized government regulators, and a plaintiff’s bar that has learned valuable lessons from the asbestos and tobacco cases.
At least that’s the outlook from Crowell & Moring, which has put together its first-ever report on litigation trends, “Litigation Forecast 2013: What Corporate Counsel Need to Know for the Coming Year.”
“More and more corporations ask us for forward-looking information about litigation, not an encyclopedic survey of cases,” said Mark Klapow, a partner in Crowell’s litigation group in Washington, D.C., who conceptualized and edited the 24-page report.
“So we identified 10 areas that we think are front and center for every Fortune 500 and most midsize companies,” Klapow said. “Here’s what’s happening across industries and practice areas in litigation, and what general counsel need to know to guide their companies and their resources.”
Klapow noted that among the hottest areas for litigation are antitrust, white-collar crime enforcement, and trade secrets. The other areas capsulated in the report are labor and employment, e-discovery, government contracts, patents, torts and environment, class actions, and the International Trade Commission.
The study also looks at jurisdictional trends, such as which districts move most quickly from filing to disposition (the U.S. District Court for the Southern District of Illinois is the most efficient), and which ones are most often reversed by the U.S. Supreme Court (the Sixth Circuit Court of Appeals in Cincinnati).
Antitrust is a hotspot, Klapow said, because “the [Obama] administration has been ramping up enforcement, and we expect that to continue.” The number of civil antitrust cases filed in federal courts has been dropping every year since 2008—until 2012, when enforcement efforts surged.
“Escalating government and private enforcement activity is trending toward higher fines, prison sentences, and civil recoveries, as well as competitive limitations on patent rights and remedies,” the report quotes John Gibson, a partner in Crowell’s antitrust group.
“In this environment, it’s more important than ever to have a robust antitrust prevention training program and [to] conduct frequent audits of ‘hot spots,’ such as sales and expatriates,” Gibson adds.
In trade secrets litigation, Klapow said, “we’re seeing a confluence of events” that includes increased hacking of computer networks and more employees being internationally mobile—and taking trade secrets with them.
The report says trade secret theft and litigation have seen dramatic, double-digit growth, and predicts the trend is likely to continue—or even accelerate—in 2013.
Because of the growing legal issues and the increasing complex technology questions involved, Klapow said he expects Congress to re-introduce a bill to establish a federal trade secrets law that would supersede what is now 47 separate state laws.
On the white-collar crime front, the report talks of the growing role of whistleblowers and the emergence of multimillion-dollar payouts in 2012. “It is likely such outsized rewards will continue, and expand to the securities arena, as well,” the report states.
Janet Levine, chair of Crowell’s white-collar regulatory enforcement group, goes even further, saying, “We anticipate the volume and size of the awards will increase dramatically.”
Kent Gardiner, chairman of the law firm, explains in the report why its practical look at important litigation trends is a good resource for legal departments. “In-house lawyers need to know more than ever to succeed, both about their clients and about the legal landscape,” he says.
“Everything from protecting innovation and winning contracts to growing through acquisitions and avoiding compliance penalties may be at stake.”
