Litigation Risk 2025 report

For our second annual litigation risk report, we have once again spoken to more than 360 general counsel and senior in-house lawyers from large businesses across financial services, automotive, real estate, technology & telecoms and other sectors.

The story that emerges is one of both escalating risks and rising costs: the proportion of our respondents engaged in disputes in the UK has grown significantly since 2023, albeit not all of them will end up in court. It is also clear that senior lawyers expect more disputes around the world as we move through 2025 and beyond.

Olivia Phalippou, senior legal counsel, Get Living, “The whole landscape of regulations and compliance is always changing and that creates risk.”

While senior in-house lawyers increasingly deal with regulatory and competition cases, and worry about the risks associated with IP, class actions and artificial intelligence (AI), they cannot afford to lose sight of the sheer volume of commercial contract disputes and contract breaches that look set to continue.

At the same time, dispute costs are increasing to such an extent that legal teams now weigh finances and reputational considerations ahead of the merits of a case when deciding whether or not to pursue a claim, and cost is a big factor shaping litigation strategies.

“

Reputational impact is always a key
consideration for us – we always ask ourselves whether litigating is the right thing to do for our brand and our customers.

Andrea Murray, director of competition, litigation and compliance, Virgin Media O2

Litigation risk 2025 report: key findings

Although not necessarily reflected in the number of claims issued in 2024, the proportion of respondents engaged in disputes in England and Wales, Scotland and Northern Ireland all jumped by 10% or more compared with last year’s report and is expected to keep rising over the next three years.

Far more businesses are involved in competition (42%) and regulatory (50%) cases and boards are aligned with legal teams in considering these among the greatest litigation risks.

Nearly 90% of senior legal decision makers believe AI discrimination presents a high or moderate risk over the next 12 months, while AI is considered the biggest area of emerging risk by boards. Relatedly, more expect intellectual property risks to increase in the next three years than any other area of dispute.

The average cost of a major dispute is now over £600,000, and costs and reputation are bigger considerations than the merits of a case when deciding whether to bring a claim.

UK corporates embrace AI tools to better manage disputes, with a range of applications adopted in the past year and more than a third of respondents plan to adopt more in 2025.

Given the growing risks to reputation and the potential cost of disputes, companies still need to do more to improve their risk mitigation plans. Less than half (49%) have conducted preparedness reviews despite this being acknowledged as the most effective measure.

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