Dive Brief:
- Cybersecurity and data privacy concerns topped corporate dispute exposure risks across the energy, financial institutions, healthcare and technology sectors since the start of the year – “far outpacing earlier expectations,” according to a survey by law firm Norton Rose Fulbright.
- Those polled also noted increased litigation risk around artificial intelligence and employment issues but reported “improvements in litigation readiness.” A total of 135 general counsel and in-house litigation leaders responded to the poll.
- Of those surveyed, 39% cited increased federal dispute exposure and 44% reported more state-level exposure on employment and labor issues. “This reflects increased compliance complexity as California, New York and other states pass new employment-related requirements,” per the report.
Dive Insight:
“What stands out is how quickly the litigation environment is evolving, especially around cybersecurity incidents, consumer claims and AI-related disputes,” Steven Jansma, Norton Rose Fulbright’s U.S. head of litigation and disputes, said in a statement. “We are seeing new approaches and a level of activity that is accelerating across industries. Even where federal enforcement has softened, states are often stepping in and pushing litigation forward.”
New York, for example, on June 2 passed a bill designed to limit “ghost job” postings by fining companies that don’t share hiring timelines.
Those polled by Norton Rose Fulbright said cybersecurity and workforce issues also raise class-action lawsuit concerns. More than half named data or cybersecurity breaches as “a likely trigger of such litigation,” and 47% said workforce changes like layoffs could lead to lawsuits.
The report identified AI tools as “an emerging class action catalyst.” Of those surveyed, 41% said product launches or AI-related deployments could be triggers for class-action lawsuits.
A bill proposed in Minnesota’s state House of Representatives would require that employers provide a 90-day notice before deploying AI technology that could displace jobs as well as give employees an opportunity to upskill or reskill.
Companies can also be liable for AI-assisted decisions, even if the technology used was purchased or licensed from a software vendor, a partner at Rimon Law recently wrote in an op-ed for HR Dive.