Exclusive data: 2024 sees rise of ESG, group actions and insolvency disputes
London litigation lawyers predict environmental-related cases, group actions and insolvency disputes to increase next year.
In exclusive data shared with City PM from the London Solicitors Litigation Association (LSLA), the majority of litigants surveyed (65 per cent) envisaged an increase in environmental/environmental, social, and governance (ESG) claims.
John McElroy, a committee member of the LSLA and partner at Hausfeld, said: “2023 saw stricter regulatory and disclosure requirements and growing investor pressure as well as a raft of climate litigation worldwide to hold governments and corporates to account.”
He pointed out the case against Shell filed by ClientEarth over failure to properly prepare for the net zero transition
“2024 should see an increase in investor or shareholder climate claims which highlight the commercial risks of the climate crisis and how companies address it,” McElroy added.
ESG was closely followed by class actions, collective claims and group litigation at 62 per cent, while 59 per cent of lawyers believe disputes related to insolvency and business distress will increase.
Commenting on the rise of insolvency cases, Charlotte Hill, committee member of the LSLA and partner at Penningtons Manches Cooper said: “This is unsurprising considering the aftermath of the pandemic has left businesses grappling with financial turbulence. As economies recover, insolvency and business distress litigation surge.”
“Companies face mounting pressure to repay debts, adapt to market competition, and address complex financial structures. Amid uncertainty, creditors seek recovery through litigation. In this dynamic landscape, the rise in insolvencies underscores the delicate balance between survival and legal consequences,” Hill added.
The data also showed that there may not have been any need to be concerned about the impact of Brexit on London’s litigation market as 94 per cent of respondents say they haven’t seen a material flight of work from London in the past 12 months.
This comes after the news was announced last week that revenue generated by legal activities in the UK hit its highest level in more than a decade, as the sector generated £43.7bn over 2022/23.
Additionally, 70 per cent of the members of the LSLA believe the use of AI will mean lower litigation as 86 per cent of litigants polled thought their firms would use AI more in the next three years.
Currently, just under half (45 per cent) say that their law firms are already using AI for litigation work, and around half of those say this is for assisted disclosure.