September 26, 2019 business of law

Class Action Spending Reaches 10-Year High

Companies spent nearly $2.5 billion defending class actions in 2018, and half the companies surveyed expect spending to increase throughout 2019

By Daniel S. Wittenberg

In 2018, class action spending reached its highest levels since the 2008 financial crisis. According to the 2019 Class Action Survey, companies spent nearly $2.5 billion defending class actions in 2018. This accounts for 11 percent of the $22.25 billion market for legal services in litigation. Significantly, over half of the respondent companies participating in the survey are facing class action litigation, and spending is expected to increase throughout 2019.

2018 has seen the highest in class action spending to date

2018 has seen the highest in class action spending to date

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Labor and Employment Class Action Litigation

Topping the list by matter type and spending is labor and employment. For the first time in 15 years, plaintiffs posted a record high certification success rate in wage and hour litigation, according to the 2019 Workplace Class Action Litigation Report. This largest category of workplace lawsuits, however, will likely diminish following the recent U.S. Supreme Court decision in Epic Systems Corp. v. Lewis, which held that employee arbitration agreements with class and collective action waivers are enforceable under the Federal Arbitration Act. Though there may be a decrease in the number of lawsuits and class certifications in this arena, the costs and complexity of arbitration will likely correspondingly increase.

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