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Texas GCs: Contract and Employment Disputes Dominated 2020 Litigation

February 17, 2021 Mark Curriden

The litigation dockets of nearly one-third of Texas businesses increased in 2020 because of Covid-19, but the wave of pandemic-related lawsuits predicted by many legal experts does not seem to have materialized – at least not yet.

Norton Rose Fulbright, in its 16th annual litigation trends survey, found that half of the corporate general counsel in Texas feel that they are more exposed to lawsuits because of business interruptions connected to Covid-19.

Another 37% of corporate legal departments in the state believe that the social justice movement of the past year has made them more vulnerable to employment litigation.

That being said, the Norton Rose Fulbright survey, which questioned more than 180 corporate general counsel and heads of litigation in Texas and across the U.S., shows that the average large Texas company was hit with 50 lawsuits in 2020 – compared to 92 cases against non-Texas corporations.

The median number of lawsuits against Texas companies actually declined from five in 2019 to four last year.

The average number of civil complaints filed by Texas businesses declined even more significantly – from 4.5 in 2019 to only 2.3 in 2020.

According to Norton Rose Fulbright, 86% of Texas general counsel said that they have employed remote technology such as Zoom as part of litigation or other dispute-related activities since the pandemic started last March.

“That is an amazing statistic because one year ago, I was involved in a major tort case in which I was not permitted to participate in a proceeding by telephone,” said D’Lesli Davis, litigation partner in Norton Rose Fulbright’s Dallas office. “I think this change is permanent.”

Norton Rose Fulbright partner Saul Perloff, who offices in San Antonio, said he gave a CLE last February on the 2019 litigation trends data.

“There was no discussion of taking depositions by Zoom,” Perloff said. “Trials will still be in person, but remote hearings and depositions are permanently with us.”   

Texas general counsel that have seen an increase in litigation point to a jump in contract disputes and labor and employment complaints, according to the survey.

“It seems counterintuitive that the pandemic would cause an increase in business litigation, but litigation funders have been much more active in reaching out to general counsel,” Perloff said. “In the past couple months, we have seen a flurry of new matters coming in connected with litigation funding companies, especially involving intellectual property and advertising-related matters.”

There is some bad news for outside counsel. The survey found that two-thirds of Texas general counsel say they are under pressure to reduce legal spend and 48% said they plan to bring more of their legal work in-house.

For more details on the Norton Rose Fulbright Litigation Trends Survey, please click here.

Mark Curriden

Mark Curriden is a lawyer/journalist and founder of The Texas Lawbook. In addition, he is a contributing legal correspondent for The Dallas Morning News.

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