Corporate Class Action Defense Spending Hits $4 Billion in 2023

With corporate spending on class action lawsuits hitting $4 billion in 2023, labor and employment-related claims emerge as primary drivers of these cases, according to a Carlton Fields.
By: | March 27, 2024

Corporate defense spending on class action lawsuits increased to nearly $4 billion in 2023, with labor and employment claims the main driver of these lawsuits, according to Carlton Fields’ annual class action survey.

The survey, the law firm’s 13th annual report, provides an overview of important issues and practices related to class action matters and management. The annual survey is based on interviews with general counsel or senior legal officers at more than 300 Fortune 1000 and other large companies across a variety of industries.

Among the key highlights of this year’s survey is the continued of growth of spending to defend class action lawsuits.

Spending on class action defense accounted for $3.9 billion among respondents in 2023, the survey found, up from $3.64 billion in 2022. Class actions accounted for 14.6% of corporate legal spending, up from 14.4% a year ago.

“Corporate legal spending on defending class actions is expected to grow at 6.8% (in 2024), one of the highest growth rates in legal spending. Increased spending on class actions has three major drivers: more companies are facing class actions, increased complexity of claims, and larger claims,” the report’s authors noted.

This year’s survey found that the percentage of companies facing class actions reached its highest level in the 13 years the report has tracked these cases.

Companies with class actions reached 61.9% in 2023, up from 59.2% a year earlier. Four key drivers of the growing percentage of class actions include “activist workforces, data privacy concerns, use and misuse of social media, and plaintiff creativity and aggressiveness,” the report said.

Labor and employment was the largest type of class action, both in terms of type of claim (43.4%) and spending (38.9%). The next closest type was consumer fraud claims, accounting for 18.8% by type and 18.9% of spending.

Looking ahead, survey respondents predict that labor and employment cases will remain a driver of future claims. Asked to predict the next wave of class actions, 39.4% cited labor and employment, followed by data privacy and cyber security, 24.2% and consumer fraud, 21.2%.

Nearly eight of 10 companies or 79.4%, agree that baseless claims bring the largest risk of class actions.

“They report these actions have no merit, but they are forced to defend them. Top legal decision-makers believe courts are reluctant to dismiss or slow these actions as they grow,” the report’s authors said.

After baseless claims, the type of claims expected to pose the biggest risk for class actions was ESG disclosure claims, at 52.9%, followed by use and misuse of social media, at 47.1%.

Almost all of the participating respondents report they are experienced at facing class action lawsuits. In 2023, 85.3% reported having faced one or more class action claims, while 14.7% reported seeing one every year or two.

To download a copy of the 2023 report, or previous versions, visit Carlton Fields website. &

The R&I Editorial Team can be reached at [email protected].

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