NEW YORK, N.Y., October 10 – U.S. companies face an average of 305 pending lawsuits internationally, and for large U.S. companies " those with $1 billion or more in annual gross revenue " that number rises to 556 cases, with an average of 50 new disputes emerging each year for close to half of them, according to a new survey conducted by Fulbright & Jaworski LLP, an international law firm.

Fulbright noted that insurance companies are particularly hard hit, calling the industry the undisputed champion of disputes. The survey showed that insurance companies face an average 1,696 lawsuits, spanning product liability and environmental class actions, to directors and officers claims, and even coverage fights over hurricanes and terrorist attacks.

The law firm added that more than half of insurance company counsel reported taking on 50 or more new lawsuits in the past year, and the survey showed that insurers appear to get embroiled in the biggest-stakes cases " 17 percent reported having more than 50 lawsuits pending with at least $20 million at issue, compared to just six percent of energy companies " the next largest target " reporting more than 50 suits in the $20 million or greater range.

Fulbright said that, in addition to insurers and energy companies, retailers were also targeted heavily. Both the energy and retail sectors reported average caseloads of over 330 per company.

Perhaps even more than our two previous studies, our new survey reveals how thoroughly litigation is woven into U.S. corporate culture " the sheer number of cases and huge slice of spending taken up by lawsuits make abundantly clear that litigated disputes are a fundamental part of doing business, said Stephen C. Dillard, chairman of Fulbrights global litigation practice.

The survey showed that the litigation is not all one-sided. Seventy percent of the in-house counsel surveyed by Fulbright confirmed that their companies initiated at least one new lawsuit in the past year as plaintiff.

Of course, litigation is not always defensive, Dillard noted. The great majority of companies report initiating lawsuits in order to enforce contracts, safeguard intellectual property, block monopolistic behavior, and achieve other valid business objectives that require them to take assertive legal action.

Growing Internationally

Contrasting the average number of lawsuits faced by companies in the U.S. and in the U.K., Fulbright noted that U.K.-based companies that were surveyed reported an average of only 178 cases " 63 in the U.S.

However, with respect to U.S. companies, the law firm noted that while the majority of the lawsuits faced are in U.S. courts, the tide of international disputes is rising " more than one-third of companies said that up to 20 percent of their dockets originate in foreign venues, proof that U.S.-style litigation is going global, according to Fulbright.

The law firm added that the generally high cost of dispute resolution in the U.S. has not been lost on the rest of the world. For more than half of foreign counsel surveyed by Fulbright, high legal costs was cited as a top concern about litigating a dispute in the U.S.

Not Just Lawsuits

Fulbright said that conventional lawsuits are not all a company faces with respect to legal activity. Half of participating U.S. counsel said their companies separately faced at least one new arbitration, and one new regulatory proceeding in 2005-06, on top of their litigation caseload.

Additionally, the law firm noted, as lawsuits have multiplied " brought by shareholders, regulators, consumers, employees, and competitors " so have internal investigations. Nearly two-thirds of the U.S. companies interviewed by Fulbright reported that their companies had launched at least one such probe in the past year necessitating use of outside counsel " a certain byproduct, Fulbright said, of Sarbanes-Oxley legislation, as well as the recent mega-scandals of Enron and WorldCom.

Dillard called the high number of internal investigations undertaken by companies one of this years surprises. He said, Partly, this is an outgrowth of our modern regulatory and enforcement climate, in which companies are put on fast-track notice by government agencies that an action may be forthcoming, which prompts them to conduct a full-scale investigation.

The surge in investigations is also an inevitable consequence of the big corporate meltdowns that have occurred in recent years.Management and corporate boards have become much more proactive at taking the lead in policing themselves for possible wrongdoing and potential liability. Whether borne from the fear of enforcement, litigation, or negative publicity, internal investigations are actually a means of containing future financial or reputational damage.

Affecting All Shapes and Sizes

That litigation is an everyday fact of life for American corporations is borne out by findings from companies of all sizes and industries, Fulbright said. Ninety-four percent of U.S. counsel surveyed, according to the law firm, said that their companies had some form of legal dispute pending in a U.S. venue. For 89 percent, Fulbright added, at least one new suit was filed against their company during the past year. Additionally, one-third of all companies, and nearly 40 percent of $1 billion-plus firms, project the amount of litigation to increase next year.

U.S. companies report spending 71 percent of their overall estimated legal budgets on disputes, according to the survey. Nearly 40 percent of Fulbrights U.S. respondents reported at least one $20 million suit commenced against them in the past year. Two percent faced 50 new suits or more involving at least $20 million in claims, or more than $1 billion worth of new disputes for some large companies.

Big Companies Pay More

For billion-dollar-plus corporations, the costs of litigation are especially significant, Fulbright said. Large U.S. companies commit an average of $19.8 million to litigation, approximately 58 percent of total average legal spending of $34.2 million, the survey showed. More than two-thirds of large companies surveyed reported at least one new suit involving $20 million or more in claims; 17 percent faced a minimum of six suits in the $20 million-plus range.

While smaller companies are hardly litigation free, the weight is considerably less, Fulbright said. Companies with revenues under $100 million reported only nine cases pending on average, according to the survey. Counsel at American small businesses say their average dispute spending totaled only $178,000.

In-house counsel from 311 companies headquartered in 29 states participated in the survey. In addition to U.S. respondents, Fulbright surveyed law departments in 22 other countries, including the U.K., Canada, Mexico, Japan, Brazil, and elsewhere in Asia, Europe, and Latin America. Fifty-two percent of U.S. respondents work for publicly-held companies; a similar percentage represent companies with gross revenues of $1 billion or more. Of the remainder, 28 percent were middle-market firms with sales between $100 million and $999 million, and 22 percent had less than $100 million in revenues.For more information,visit www.fulbright.com.