Tuesday, October 26, 2010

Increased Regulation Driving Litigation Surge

Maybe there's hope? ... via Compliance Week.

The business sectors hit with new lawsuits most often by plaintiff lawyers or government regulators were real estate (88 percent of all respondents in that sector), manufacturing (86 percent), energy (86 percent), and healthcare (83 percent).
The financial sector, meanwhile, was particularly rankled by the tighter regulatory regime. Nearly half of financial services respondents ranked regulatory matters as their biggest concern—the highest percentage of any sector. That’s no surprise given passage of the new Dodd-Frank Act over the summer. “It’s only going to heighten regulators’ ability to bring cases,” says Smith.
Healthcare companies were also quite worried about new litigation stemming from regulation; 39 percent in that sector ranked it as their biggest concern. “From a compliance perspective, my clients are extremely concerned about the new changes in the False Claims Act, and other changes in federal fraud and abuse laws,” says John Brennan, a partner in healthcare law at law firm Crowell & Moring. He adds that the bounty provision in the FCA, which offers whistleblowers substantial cash rewards for information that leads to successful prosecution, has long been a driver of litigation.

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