The Decade of Disputes: Class actions, financial disputes and fraud dominate the litigation landscape facing media scrutiny in 2022

Looking to the year ahead, 24% of companies surveyed expect media scrutiny around cases of financial fraud, a trend also seen in commercial litigation. Last year, FTI Consulting identified that third-party litigation funding is driving an increase in high-profile claims with 89% of institutional investors expecting at least one company in their portfolio to face legal proceedings with claimants backed by litigation funding. In this year’s research, 17% of companies surveyed expect media scrutiny from class actions or group litigation – typically backed by third-party funding.

Acknowledging the nature of such class action cases – typically high-profile claims with a proposed class representative litigating on behalf of consumers – FTI Consulting’s research also sought to ascertain the business impact that the mere existence of a claim may have on a company, with the potential for customer relationships to be harmed. Approximately one third of companies facing class action cases reported a customer impact for their business expressed in lost turnover, with the average business impact equating to 2.35% of revenue.

It is therefore unsurprising that the vast majority of companies (81%) are taking steps to prepare for such cases, including the potential reputational damage they can entail, and on the whole managing these risks on a proactive rather than reactive basis.