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What Strategies Are Most Effective at Reducing Cost and Managing Risk in Class Action Litigation?
We asked more than 400 in-house counsel, at some of the largest U.S. companies, what strategies are most effective at reducing cost and managing risk in class action litigation. Relying on trusted counsel still tops the list as the most effective tool to reduce and control costs. See what other practices and policies are most effective and which strategies companies are using to manage risk in the 2023 Carlton Fields Class Action Survey.
Labor and employment class actions rose substantially again this year, as a share of overall class action matters. Companies perceive both regulatory agencies and employees (through their counsel) as being more aggressive than in years past. The announcement of a regulatory investigation or enforcement action, in such an environment, can lead to a follow-on putative class action.
Consumer fraud class actions also increased on companies’ dockets due to claims resulting from the use of social media, product labeling, and debt collection.
COVID-19 class action matters no longer appear at any measurable level, after dipping below 10% last year. Most of the remaining COVID-19 class actions concern labor and employment matters.
Note: Insurance claims do not include COVID-19 and are mostly tied to financial products and offerings, or claims relating to disasters.
Labor & Employment Class Actions Show Substantial Growth
Companies continue to see consumer fraud class actions as posing the largest threat by a wide margin, pointing to claims based on both the use of social media, and ESG disclosures and practices. Employment claims pose more risk than previously reported because perceived employee activism created unrest, lost productivity, and financial risk alongside the costs associated with an increased number of baseless claims. Securities fraud class actions against public companies saw a jump this year, as a result of changes in public disclosures about future guidance and the U.S. stock market’s roller coaster approach to end 2022. While product liability is still a small share of perceived risk, it more than doubled from the share it held last year. Finally, while data privacy class actions are anticipated to increase in number in 2023, concern for the risk from such suits has dropped. Larger companies are educated on the risks, and report that they can better predict outcomes.
Consumer Fraud, Employment Perceived To Pose Biggest Risk in Today’s Environment
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Cost Reduction Policies and Practices
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