AI, data and ESG set to dominate 2024 disputes | Rob Harkavy

Norton Rose Fulbright has revealed its annual litigation-trends survey of more than 400 North American in-house counsel.

A comprehensive survey conducted by global law firm Norton Rose Fulbright (NRF) has revealed that cybersecurity and data protection, AI, and ESG issues are the primary drivers of litigation risk for organisations in 2024. The survey, which is part of the firm’s Annual Litigation Trends Survey series, drew on responses from over 400 general counsel and in-house litigation leaders based in the US and Canada across industries ranging from financial services, real estate and many others.

The overwhelming majority of respondents do not expect a reduction in legal disputes in the coming year, especially within the technology and energy sectors, with 86% of those surveyed anticipating that the number of lawsuits will either increase or stay the same. There were very similar numbers for arbitrations (89%), and regulatory investigations and proceedings (85%). What has changed since last year’s survey are the reasons for disputes; perhaps because of economic uncertainty in the wake of the Covid-19 pandemic, more than half (54%) of respondents in last year’s survey cited market volatility as a prime driver of litigation. This figure has fallen to around a third (35%).

CYBER-QUESTIONS

Cybersecurity and data protection have emerged as significant areas of concern. A hefty 40% of organisations reported an increase in their exposure to disputes in these areas in 2023, more than any other area, an increase attributed to a surge in cyberattacks and the growing complexity of data privacy regulations. Looking ahead, 44% of respondents anticipate that cybersecurity, data protection and data privacy will top the list of litigation concerns in 2024. NRF’s US Head of Technology and US Head of eDiscovery and Information Governance Andrea D’Ambra commented: “The evolving data privacy regulatory landscapes, both in the US and internationally, persist as big challenges for our clients. The complexities and challenges of regulating the use of such AI technologies have redirected our client’s focus and resources, marking a significant shift in the priorities of organisations and regulatory bodies alike.”

As D’Ambra’s comments show, AI has a growing impact on litigation risk. Approximately half of the respondents indicated that the increased use of the technology would escalate their exposure to cybersecurity and intellectual property (IP) vulnerabilities in 2024. Interestingly, despite the potential legal and ethical challenges posed by AI, more than a third of respondents expressed support for the use of generative AI by their outside counsel to enhance their litigation work.

ENIVIRONMENTAL DIFFERENCES

ESG has also emerged as a growing area of litigation concern. The survey found that one in 10 respondents experienced ESG-related litigation in 2023, a significant increase from just 2% in 2022. Furthermore,…