Canadian and U.S. litigation trends growing more and more similar

Private companies in Canada and the United States are facing similar trends in litigation based on legal actions launched by customers, shareholders, employees and business partners, a Chubb Insurance Company of Canada survey has found.
“The survey findings were surprising, as generally Canadians are thought to be far less litigious and therefore Canadian companies are seen to be less vulnerable to litigation than our American neighbours,” said David Williams, senior vice president of specialty insurance for Chubb Insurance Company of Canada.
“Awards in Canada remain smaller than in the States, but on a number of fronts the survey results should be a real eye-opener for private companies in Canada.”
In the Chubb Private Company Risk Survey, independent research firm Pollara interviewed 300 Canadian for-profit, private companies and 469 firms in the United States.
It found Canadian commercial litigation patterns are becoming similar to those in the United States. This was particularly apparent in three specialty insurance areas, a release says. In directors and officers (D&O) insurance lines, private companies in Canada and the U.S. faced similar lawsuits from consumers (16%), competitors (5%), vendors (6%) and partners or shareholders (3%) in the last five years, a Chubb release says.
The average cost to the affected Canadian companies was Cdn$338,699.
Almost one-quarter of U.S. firms and one-third of Canadian firms experienced some type of employment practices-related incident in the last five years.
Canadian firms faced far more claims from employees than did their U.S. counterparts (27% vs 15%), Chubb found.
Judgements, settlements, fines and legal fees for such incidents cost affected companies an average of Cdn$63,724.
Finally, roughly 10% of companies have sued in connection with an error or failure in service within the past five years. Canadian and U.S. firms are facing a similar number of errors and omissions lawsuits (12%) from customers or partners. The average cost for E&O suits was Cdn$73,649, Chubb reports.