Almost a third of global companies expect disputes to increase in 2022, study finds

Covid and Cybersecurity-related rifts seen as biggest threats, Baker McKenzie report shows

Almost a third of companies globally expect disputes to increase in 2022, driven by disagreements around Covid-19 and cybersecurity, according to a new report from Baker McKenzie.

Some 32% of senior legal and risk professionals at companies with at least $500m of annual revenue based in the UK, US, Singapore and Brazil reckon disputes volumes will increase over the coming 12 months as the anticipated wave of Covid-19-related litigation begins to be reflected in court filings.

Almost half of respondents (48%) globally cited the pandemic as the greatest external threat in terms of increasing their organisation’s exposure to disputes, while more than half (57%) cited cybersecurity as the most concerning type of dispute that could impact their organisations this year.

Claudia Benavides, Bogota-based global chair of Bakers’ dispute resolution practice, said: “The picture is clear: Covid-19 still dominates the disputes landscape, but familiar risks are coming back into focus, particularly around data and ESG. Our analysis suggests many businesses are underprepared for disputes, but can take simple steps to mitigate risk."

In the UK, 30% of respondents are expecting dispute volumes to increase over the coming year, though only 19% cited Covid as the greatest external threat to increasing dispute exposure. Meantime, almost three-quarters of UK respondents (71%) reckon cybersecurity and data are the most concerning types of dispute risk that could impact their organisations this year.

Just 14% of UK respondents are fully confident their organisations are prepared for litigation, compared to 35% globally who say they are ‘highly’ confident.

The survey also showed that almost two-thirds of respondents (62%) prefer arbitration to litigation for international disputes compared to 35% for domestic disputes. Competition among international dispute venues has continued to heat up, with Macau becoming the first jurisdiction to offer tax breaks for using its local arbitration centres, while filings at the Singapore International Arbitration Centre have increased again.

Nandakumar Ponniya, partner and Singapore-based head of Bakers’ Asia-Pacific dispute resolution practice, said: “SIAC’s caseload growth last year was impressive, building on the good work from years before. Much of the increase was due to trade disputes, with Indian, Chinese and US parties predominant. With ongoing trade issues continuing to be in focus in Asia-Pacific, we can expect this trend to continue.”

Singapore ranked jointly with London as the world’s favourite arbitration centre in a survey last year of more than 1,200 in-house lawyers, arbitrators and practitioners conducted by Queen Mary University of London and White & Case

Investigations are also a concern among corporates globally. As many as 82% of respondents reported concern about the risk of an external investigation from regulators or law enforcement agencies, while 65% said they were concerned about the risk of an internal investigation.


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