BizJournals: The nation’s largest banks — and public companies, for that matter — are preparing for a timeout from the courtroom following years of being pummeled by shareholder and investor lawsuits in the wake of the Great Recession. At the end of 2017, the country’s largest banks collectively decreased their estimates for future legal costs to their lowest levels since 2012, and legal experts predict the move is a harbinger of what’s to come for Corporate America in an era of strong job growth and loosening regulations at the federal levels.
The downturn in litigation is not limited to the banking sector, said Dennis Tracey, chair of Hogan Lovells’ litigation practice in New York. Recent U.S. Supreme Court cases tightening personal jurisdiction rules have made it much harder to file suit against a company outside of the state where it is domiciled or has its principle place of business. Tracy said that has helped to limit the number of lawsuits across all industries. Another plus for corporations: The Supreme Court recently handed down decisions reining in intellectual property cases and making it harder for so-called patent trolls to advance legal claims. Tracey also pointed to the election of President Donald Trump, whose administration has made it a priority to loosen the regulatory climate for corporations. “There has really been a decline in litigation since the financial crisis, when many companies began to rethink their legal spending,” Tracey said. “I don’t know if it’s permanent or temporary.”
Tracey said a strong economy also is contributing to the decline in legal challenges for banks, as low unemployment and rising wages have sapped some of the motivation that’s driven prior shareholder lawsuits. [h/t Pete Weiss]