The Year Ahead 2024 The Year Ahead: Global Disputes Forecast 2024

The Year Ahead

Against a backdrop of economic stagnation and geopolitical conflict, businesses are preparing for a challenging year. Global disputes will continue at pace, according to insights from more than 600 senior lawyers at large corporations, with ESG and employment risks the greatest areas of concern. Our seventh annual report provides detailed analysis of disputes trends, as well as sectoral and region-specific developments, to prepare your organization for The Year Ahead.

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Key resources

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Global Disputes Forecast 2024

81%

of respondents expect the numbers of disputes in 2024 to either stay the same or increase

of respondents are concerned about an internal or external investigation in 2024.

94%

of respondents were fully confident or very confident in their organization’s level of preparedness for litigation.

16%

are fully or very confident in finding the right services for litigation or arbitration support

Top disputes presenting risk in 2024

73%

ESG

Key issues

Key trends

Insights by sector & region

Industrials, Manufacturing & Transportation

Energy, Mining & Infrastructure

Healthcare & Life Sciences

Technology, Media & Telecoms

Financial Institutions

70% 60% 50% 40% 30% 20% 10% 0%

Consumer Goods & Retail

The same level of disputes as 2023

Increase in disputes

Decrease in disputes

USA

Singapore

Brazil

70% 60% 50% 40% 30% 20% 10% 0%

The same level of disputes as 2022

Decrease in disputes

Increase in disputes

Sector

Region

ESG

Employment

Cybersecurity and data

Tax

Post-M&A

Nearly three-quarters (73%) of organizations say that ESG disputes will be a risk to them in 2024. Recent years have seen a flourishing of ESG laws and regulations, many with extraterritorial effect.

There are currently over 2,000 active climate change cases around the world. The growth rate in cases appears to be slowing but diversity in cases is still expanding. There is greater importance placed on social and governance disputes. In part this may reflect the increasing incorporation of human rights into the ESG agenda. Recent calls for lawyers to act as "ethical gatekeepers" present a new threat for organizations defending ESG litigation, risking the erosion of their right to representation.

Baker McKenzie is a signatory to the UN Global Compact. View our progress, or read more about our commitment to inclusion, diversity and equity.

Overall, do you expect to see the number of disputes in 2024 increase, decrease or stay the same as compared to this year (2023)?

Baker McKenzie is a signatory to the UN Global Compact. View our progress, or read more about our commitment to inclusion, diversity and equity.

52%

Employment

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We invite you to join us for a series of webinars across ESG, employment and cybersecurity that will provide a practical and actionable way forward in 2024.

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The big picture

Wider global trends are influencing the disputes landscape

The OECD forecasts global growth to slow to 2.7% in 2024, well below the historical average. Many corporate transactions have been postponed, with some clients now focusing on restructuring opportunities.

Economic stagnation

There is continued tension between Russia and NATO, conflict in the Middle East, and competition between China and various Western nations. We are also seeing rising trade protectionism.

Geopolitical conflict

2023 was a breakout year for generative AI, with McKinsey forecasting gen AI to add up to USD 4.4 trillion annually to the global economy. AI will improve the way lawyers work – but it will also drive disputes.

AI revolution

Only

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Climate change

Energy transition

Extreme weather events

Greenwashing

72%

48%

45%

32%

26%

24%

Carbon tax

Release of hazardous substances

What, if any, types of environmental disputes present a risk to your organization in 2024? (Sample: respondents who identified environmental disputes as a risk)

Key trends

Equal pay and pay transparency-related claims will continue to be a significant concern, with new legislative requirements across the globe. Restructuring and reorganizations remain a complex and potentially contentious area for employers. Meanwhile, lawmakers worldwide are turning their attention to unions and labor relations, focusing efforts on strengthening worker protections.

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Over half (52%) of organizations say that employment disputes will be a risk to them in 2024. Employment is now perceived to be the second largest disputes risk worldwide - a significant increase from previous years.

Equal pay / pay transparency

58%

Re-structuring and re-organization

40%

Severance agreements

32%

Industrial action

Hybrid / remote working

31%

27%

What types of employment disputes present a risk to your organization in 2024? (Sample: respondents who identified employment disputes as a risk)

Key trends

A wider range of organizations and industry sectors are being deemed providers of "critical infrastructure," with consequential operational and regulatory requirements. Organizations face a rapidly changing technical and legal backdrop, particularly in the manufacturing sector, given its reliance on connected products and supply chains. Data protection laws continue to evolve as some jurisdictions enact laws for the first time, and more mature regimes make changes to existing data privacy rules.

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Cybersecurity and data are the top concern for investigations. We attribute this to stricter and proliferating requirements on organizations to notify regulators of breaches.

What type of cybersecurity/data disputes present a risk to your organization in 2024? (Sample: respondents who identified cybersecurity/data disputes as a risk)

Operational disruption

62%

Accidental disclosure

54%

External attack / hacking

51%

Insider attack

27%

25%

Theft or disclosure of company data / trade secrets

21%

Theft or disclosure of employee / customer / other personal data

Key trends

Many governments aim to bolster tax compliance by investments in data analysis, artificial intelligence and machine learning. Tax disputes relating to the mobility of employees topped our list of risks across all regions, in the continued absence of international guidance, and the growth of remote working. Other significant concerns include transfer pricing and value chain issues, international tax policy, indirect and industry taxes and ESG considerations.

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One-fifth (20%) of our survey respondents expect tax to be a significant disputes risk. We continue to see year-on-year increases in the number, value and sophistication of tax disputes and audits.

What type of tax disputes present a risk to your organization in 2024? (Sample: respondents who identified tax disputes as a risk)

Tax disputes related to the global mobility of employees

63%

Transfer pricing disputes, including global value chain issues

49%

Indirect tax disputes, including industry specific taxes

47%

Disputes related to double taxation/arising from tax policy developments

35%

33%

Tax disputes related to corporate reorganizations

11%

Tax disputes related to M&A transactions

Key trends

We asked respondents what types of post-M&A disputes presented the greatest risk in 2024. The top answers were regulatory disputes and employment-related issues. However, the conventional range of inter-party disputes still feature on the list, including disputes around valuation, tax, warranties and earn-outs. Whilst corporate counsel are focused on a wide range of issues that may affect their organization, they should not lose sight of core legal risks.

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Global M&A volumes have been subdued since the 2021 peak. We continue to see disputes arise as deals made in haste during the boom fail to deliver against expectations.

Regulatory - issues arising from a transaction being subject to regulatory scrutiny

34%

Employment/people - issues arising related to employee retention, severance packages or changes in compensation and benefits

27%

Management structure - issues arising from a change in management structure post transaction

22%

Valuation - purchase price adjustments based on factors such as working capital, net debt, or the performance of the acquired company post-deal closure

20%

18%

Tax liabilities - dependent on deal structure, jurisdictions involved and specific circumstances of the company

17%

Warranties - inaccurate or misleading representations and warranties regarding the target company's financial health, legal status, or other key aspects of business

What, if any, types of post-M&A disputes present a risk to your organization in 2024?

Earn-outs - what part of the purchase price is contingent on the performance of the target company post-acquisition

Key trends

There has been no slowing down in the pace of antitrust class actions in the US and Canada, and collective litigation is now also prevalent elsewhere, including the UK and parts of the EU. We also expect to see companies continue to use competition law against each other to achieve commercial goals – with litigation going far beyond collecting damages. An area where particular developments are expected in 2024 is the intersection of antitrust with other areas – including consumer law, supply chain and data privacy.

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Antitrust disputes remain a global litigation risk factor, with continued increase in activity anticipated across all jurisdictions in 2024.

Antitrust

Artificial intelligence

Key trends

AI has use in many areas of disputes, including research, analysis, discovery, drafting, prediction and decision-making. In 2024, AI will be more common in research and drafting. We will see disputes arising from AI in areas such as intellectual property, data privacy, fraud, ethics, mistake, and categorization (how AI fits within existing legal frameworks). The coming year will see continuing debate about how – and when – to regulate. Economies around the world are preparing AI legislation, including the US, the EU, China and India.

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AI had a breakout year in 2023, and it is now clear that its impact will be felt across all industries, especially law.

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Read detailed industry sector and regional analysis in the report

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Francesca Richmond London

Tiago Zapater (Trench Rossi Watanabe*) Sao Paulo

Peter Tomczak Chicago

Mark Banks London

Mini vandePol Hong Kong

*Trench Rossi Watanabe and Baker McKenzie have executed a strategic cooperation agreement for consulting on foreign law

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Michael E. Brewer San Francisco

Leticia Ribeiro (Trench Rossi Watanabe*) Sao Paulo

Robin Samuel Los Angeles

Stephen Ratcliffe London

Celeste Ang Singapore

*Trench Rossi Watanabe and Baker McKenzie have executed a strategic cooperation agreement for consulting on foreign law

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Cyrus R. Vance Jr. New York

Teresa Michaud Palo Alto and Los Angeles

Andy Leck Singapore

Elisabeth Dehareng Brussels

María Carolina Pardo Cuéllar Bogotá

Vinod Bange London

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María Antonia Azpeitia Madrid

George M Clarke Washington

Claudio Moretti (Trench Rossi Watanabe*) Sao Paulo

Jorge Narváez-Hasfura Mexico City

Ariane Calloud Paris

Ponti Partogi (HHP Law Firm, member firm of Baker McKenzie International), Jakarta

*Trench Rossi Watanabe and Baker McKenzie have executed a strategic cooperation agreement for consulting on foreign law

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Jannan Crozier London

André Gan (Wong & Partners, member firm of Baker McKenzie International), Kuala Lumpur

Alan Zoccolillo New York

Ed Poulton London

Markus Altenkirch London

Anna Mello Sao Paulo

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Francesca Richmond London

Stephen Crosswell Hong Kong

Keith Jones London

Esteban Ropolo Buenos Aires

Mark Hamer Washington

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Bradford Newman Palo Alto

Andy Leck Singapore

Vinod Bange London

María Carolina Pardo Cuéllar Bogotá

Ben Allgrove London

Nandakumar Ponniya Singapore

Steve Abraham London

Luis Dates Buenos Aires

William Devaney Chicago

Read detailed industry sector and regional analysis in the report

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Asia Pacific

EMEA

Latin America

North America

Read detailed industry sector and regional analysis in the report

Insights by sector

Insights by Region

EMPLOYMENT

cYBERSECURITY

ESG

TAX

Employment

Post-M&A

Cybersecurity

antitrust

tax

Artificial intelligence

post-M&A

ESG

Antitrust