There’s this old chestnut that Canada is not a litigious nation. Well, according to a new study, nearly half of this country’s companies say that isn’t so.
In fact, a survey of 300 firms with 50 or more workers reveals that 40 per cent have had at least one legal dispute launched against them in the past year. And, on average, those who were sued actually dealt with an average of 8.3 actions per annum.
Plus, the number of companies that have initiated a dispute is 29 per cent - launching an average of four. The “2008 Litigation Trends in Canada Study” was published by Fasken Martineau DuMoulin LLP and is touted as the first one of this type conducted here.
Pollara Strategic Insights was commissioned by the firm to “conduct a benchmarking survey of in-house legal counsel and senior executives responsible for litigation issues in Canada.”
According to the study, labour and employment issues “rank the highest in the type of dispute that most concerns Canadian companies.” That’s followed by contracts, personal injury, and product liability.
And geographic location has an impact: companies in Ontario filed the largest number of suits, Quebec the fewest. Meanwhile companies in the western provinces and Ontario have seen the largest number of lawsuits launched against them as opposed to Quebec and the Atlantic provinces, the study says.
Further, the “clear majority of the respondents” say the level of litigation “has been steady” in terms of the number of disputes launched against them and the number that they have initiated.
“Seventy-three per cent of the companies surveyed believe that approximately the same number of disputes have been filed against them and a slightly higher number of companies, 78 per cent, stated that they have initiated a similar level of disputes,” it says.
Here’s an interesting tidbit: 70 per cent employed at least one outside firm for a legal dispute in the last year. The study indicates that of those who hired outside law firms for litigation, 50 per cent are “very satisfied” and 44 per cent are “somewhat satisfied.”
“While companies tend to be loyal to the firms they have chosen, there are factors that would cause companies to switch legal providers,” says the study, noting “poor responsiveness and service are the most noteworthy.”
The odds of switching law firms “is higher when their current firm fails to deliver on results and expertise, more so than if a new firm is more capable in meeting these criteria,” says the report. “Significantly, cost is the least important factor for companies when it comes to switching outside law firms.”
The study notes that companies have seen “stable levels of litigation in the past year, but the current global economic downturn may have an impact on the litigation landscape.”
And, it also finds that companies are satisfied with their litigation legal providers, particularly with that from outside law firms. While most agreed their law firms provide “strategic insight and regular updates on legal costs, the satisfaction with these factors ranks lower than expertise and outcomes. This suggests that strategic direction and updates on costs are areas where law firms can do more to add value to their clients.”
The report concludes that the findings stress “the importance of results and experience, since companies are most likely to consider dropping their outside law firms should they fail to deliver on these factors.
“The impact of costs can be significant for any business. While this is true, the results of this study indicate that companies are less concerned with cost versus other factors such as service and expertise when it comes to switching legal providers.”
Bottom line: This is good for lawyers.
And, it’s terrific that information like this is in the public milieu. But now, what about the other 60 per cent?
- Gretchen Drummie
