Today’s class actions continue to reflect high levels of risk, with riskier class actions on the rise.
Across the board, the percentage of companies facing class actions that they consider complex, high-risk, or bet-the-company increased in 2018, while fewer companies report facing lower exposure cases.
Each year since 2016, companies have categorized more than one-fourth of their class actions as either “bet-the-company” or “high-risk” matters. After decreasing in 2017, the percentage of companies facing class actions in which the exposure is deemed potentially devastating increased 15.4%. The percentage of companies facing high-risk class actions increased from 42.6% to 50.5%. After two years of holding stable at around 62%, the percentage of companies facing complex class actions increased to 71.4%.
The percentage of matters categorized as complex or significant rose from 40.9% in 2017 to 42.1% in 2018, while the percentage of class actions that companies classify as having lower exposure declined for the second consecutive year. The growing volume of higher-risk matters is consistent with the increase in class action spending over the past four years, as reported in the 2019 Carlton Fields Class Action Survey.