7 RESILIENCE LEVERS

Amid a shifting investigatory landscape, increased media scrutiny and a new group-litigation culture, disputes and litigation risks have become a growing area of C-suite concern.

G20 businesses are facing an ever-widening range of investigation sensitivities, ranging from sustainability and compliance to tax practice and data privacy. Companies will therefore need to be increasingly prepared - and resilient - for what is being referred to as the “Decade of Disputes.”

Our research indicates that being investigated has, for the vast majority of G20 companies, become the norm. 83% of companies are either currently being investigated, or expect to be in the next 12 months.

of G20 businesses are being investigated, or expect to be in the next 12 months

13%

of G20 businesses expect to experience a class action or mass consumer claim in the next 12 months

17%

of G20 companies’ legal spend is expected to be on settlements

Three key areas expected to be investigated by regulatory / government bodies in the next 12 months:

  • Sustainability / ESG practices (30%),
  • Business conduct and treatment of customers (30%)
  • Relationship with public bodies / government contracts (30%)

Whilst class actions and group litigation have typically been associated with the US legal system, collective actions such as these are also on the rise in the UK and Europe.

 

 

There remains a considerable discrepancy between businesses’ awareness of dispute and litigation risk and the rate of change, and their level of proactive preparation to mitigate this.

Despite only 17% of businesses saying they predict no investigative concerns from regulatory or government bodies over the next 12 months, just 43% claim to be proactively managing the risk of such scrutiny.

Beyond the obvious legal implications of litigation, disputes also have a considerable financial and reputational impact on companies. One in five are expecting media scrutiny around their litigation over the next 12 months, while 17% of G20 companies’ legal spend is expected to be on settlements.

With litigation developing into an increasingly complex minefield, comprehensive and proactive preparation for disputes has never been so vital and ought to be at the forefront of business leaders’ minds. Through preparation, businesses can increase their resilience for when a dispute may arise, and be better equipped to forecast — and address — potential disputes and litigation before they develop.

Legal spend priority areas (next 12 months)

23%

Adapting to new regulation/legislation

19%

Internal investigations

18%

Remediation

INSIGHTS

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GCR Survey Report: Investigations, Data and Compliance

The pandemic and its ripple effects have impacted us all in many ways, including how we work. Suddenly, millions of workers worldwide made the shift to remote work - adopting new schedules, communication systems, and business practices. Antitrust practitioners were no different.

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Corporate Investigations X-Factors

Emerging data types, distributed evidence, co-mingling of personal and corporate information, and regulatory uncertainty are complicating investigations workflows. In this uncertain environment, maintaining rigor and defensibility across investigations practices will require a refresh of traditional methodologies.

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Valuation and Damage Quantification: Do the Same Principles Apply in the COVID-19 Era?

August 24, 2021—The pandemic has had a significant impact on the global economy and financial markets, with increased volatility and business disruption worldwide. It has affected businesses in many different ways, some favourably, but the majority adversely. As a result, dispute activity is anticipated to increase from this heightened market volatility and the large impact it had on countless industries and geographical regions.

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Looking at Your Compliance Programme Through the Eyes of a Prosecutor

August 5, 2021—In a roundtable discussion with Risk & Compliance magazine, FTI Consulting’s Julian Glass and Katherine Gillespie and Freshfields’ Ali Kirby-Harris and Ben Morgan discuss how to build a robust compliance programme.

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Assessing Damages for Breach of Contract

July 13, 2021—FTI Consulting’s Karthik Balisagar and Tim Battrick authored a chapter for the fourth edition of Global Arbitration Review's "The Guide to Damages in International Arbitration" on the assessment of damages for breach of contract.

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The COVID-19 Factor: The Impact of COVID-19 on Damages Assessments

June 9, 2021—In the past year, we have seen certain disputes arise as a direct result of the COVID-19 pandemic. Other disputes, while not directly caused by the COVID-19 pandemic, are impacted by the rapidly changing economic circumstances which the pandemic has brought. In this sense, the impact of COVID-19 in international arbitration disputes is already observable and will continue to be so as new disputes crystallize.

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Damages Assessment in A Renewable Energy Breach of Contract Dispute: FSG vs Kingdom of Lesotho

June 2, 2021—The Kingdom of Lesotho (“Lesotho”) was found to have breached provisions of a supply agreement with a German renewables company, Frazer Solar GmbH (“FSG”), in an arbitration heard in South Africa. FTI Consulting’s quantum experts, Henry Pannell and Liberty Mncube, were appointed on behalf of the Claimant (FSG) to provide an independent assessment of FSG’s damages resulting from the breach.

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Cybersecurity and Emerging Legal Standards: An Expanded Threat Landscape Puts Vital Assets at Risk

May 20, 2021—In this Practising Law Institute Chronicle article, Head of Cybersecurity for the Americas Jordan Rae Kelly and her co-authors discuss cybersecurity and emerging legal standards, and how an expanded threat landscape puts vital assets at risk.

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Complex Investigations: Are You Prepared to Meet the Rising Bar?

March 25, 2021—In this episode of The Expert Briefing podcast, FTI Consulting’s Dave Harvey, Laura Kippin and Oliver Price are joined by Ben Denison, Director of Information Technology at RPC. The group highlights the current trends around complex investigations, the extensive data from an incident or breach, and the increase in litigation and concerns from third-party auditors. Looking to the future, the experts offer tangible advice for business leaders. As the bar continues to be raised, so will the costs of not meeting it.

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Interest on Damages and the Discontinuation of LIBOR

February 8, 2021—The interest element of an award of damages can be a significant part of the overall outcome of an arbitration. However, despite the amount at stake, interest can often receive relatively little discussion in the parties’ statements of case and in the Tribunal’s award.

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Asset Recovery in Fraud Cases

February 1, 2021—In an article for Financier Worldwide, FTI Consulting’s Andrew Durant and Phil Allister discuss how fraudsters are adapting their techniques to conceal assets and the most effective asset tracing investigation strategies.

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Damages Valuation in Climate Change Disputes

September 25, 2020—The 2015 Paris Agreement signed by 189 countries represents the most significant milestone achieved in the fight against Climate Change. Based on the Intergovernmental Panel on Climate Change (IPCC) report, commitments were taken to reduce carbon emissions to limit global warming to 1.5°C above the pre-industrial level.

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