The world’s top firms face a spiralling financial burden from litigation with annual legal fees hitting an average of $10.8m (£5.8m), research suggests.

The world's top firms face a spiralling financial burden from litigation with annual legal fees hitting an average of $10.8m (£5.8m), research suggests. 2

According to an annual survey by US lawyers Fulbright & Jaworski (F&J), nearly 80% of UK firms surveyed faced some court proceedings last year.

One in four UK firms face class action lawsuits in the US while three out of five face a regulatory-related action.

Employment and contract disputes are the most common source of litigation.

Average litigation costs have risen by 25% worldwide over the past year, F&J’s survey of 400 blue-chip British and foreign companies revealed.

US firms faced average litigation costs of $12m while British firms, on average, incurred costs of $1m.

Construction firms face the highest litigation costs worldwide of any industry, with average expenses of $39m.

Insurers have paid out $36m on average while manufacturers have incurred costs of more than $14m.

Although the cost of litigation is not as high in the UK as across the Atlantic, the number of legal actions and their expense is rising fast.

“Despite the general consensus that the UK is not thought to be as tightly regulated as the US, UK businesses are experiencing more exposure to regulatory matters,” said Lista Cannon, head of European disputes as Fulbright & Jaworski.

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