According to the results of law firm Carlton Fields' 2016 Class Action Survey, released on Monday, average legal spend on defending class action lawsuits has lifted in the United States for the first time in four years from $2.03 billion in 2014 to $2.1 billion last year. Of the 391 senior in-house legal professionals who responded to Carlton Fields' survey, more than 60 per cent reported that their department was facing at least one major class action lawsuit, up 7 per cent on last year's figures.

It's not just the volume of class action lawsuits that seems to be on the up, but also the stakes attached. The number of reported class actions that can be categorised as 'routine' is falling, while the number of companies facing 'high-risk' class actions spiked more than a third last year from 37.1 per cent to 50 per cent. Currently, just over 70 per cent of the overall class action portfolio reported by in-house lawyers can be classed as 'complex', 'high-risk' or even 'bet-the-company', while just 28 per cent is considered routine. Financial exposure remains the number one class action risk cited by in-house counsel.

Contributing to the growth in legal spend on class action defence is the fact that while the overall number and complexity of class action matters has increased, the average number of in-house attorneys per company dedicated to class action matters has slid in the opposite direction, making legal departments more dependent on outside counsel involvement. For those class action attorneys who remain in-house, the total number of hours dedicated to class action matters has lifted dramatically, from just 6 hours per case in 2011 to an average 12.7 hours per case last year.

Consumer fraud and labour and employment class actions account for around half of all matters reported by survey respondents, as well as just under half of all spending on class action defence. Looking forward, an expected ruling from the Consumer Fraud Protection Bureau which will likely feed to the flow of class action lawsuits to the financial services sector by banning class action waivers in certain arbitration clauses was an emergent future concern for in-house counsel, cited by 13.7 per cent of respondents as an expected source of future class action activity. Data and cybersecurity remained the dominant predicted sphere of future class action woes, cited by 24.6 per cent of respondents.

Sources: Corporate Counsel; Carlton Fields