RPC: Litigation figures fall but picture obscured

There has been a 30% fall in the number of commercial cases launched in the High Court, down to 47,884 in 2010 from 68,084 in 2009, according to City law firm Reynolds Porter Chamberlain LLP (RPC).

However, the fall in claims formally launched in the High Court almost certainly masks a high number of major commercial disputes, which are frequently funded or defended by an insurer, being fought outside the courts.

Paul Castellani, partner at RPC, explains that companies and their insurers are increasingly dealing with other forms of dispute resolution such as arbitration or are holding back from court action in the hope of settling in mediation.

Comments Paul Castellani: “The fall in new court claims may look like good news for businesses and insurers hoping to avoid time-consuming litigation, but the data should not make insurers complacent: a lot of hard fought commercial disputes against insured entities are taking place that will never end up in court.”

“The effects of the international financial meltdown and recession are still being felt in disputes against insured professionals in particular. Cases are increasingly settled at the pre-action stage, whether by way of negotiation or more formal mediation, particularly as early settlement discounts are available to insured defendants who are often the paying party in the dispute.”

“Unfortunately, a fall in the number of litigated cases does not indicate a reduction in the total number of legal disputes in the market.”

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