Businesses seek out specialist legal advisors to tackle a rise in international disputes, PwC survey shows

Bucharest, 23 April 2013. The number of businesses hiring in-house specialist lawyers is set to rise according to a new PwC survey out today, after a third reported an increase in the number of international disputes.

The survey, Corporate Choices in International Arbitration (IA), showed 35% of the polled counsels had reported a rise in the number of international disputes. When asked what method they would choose to resolve their disputes, twice as many opted for arbitration than other forms such as litigation.

Currently companies tend to seek this specialist expertise from external law firms but under the current constraints of the economic climate and the rising cost of proceedings, many more are likely to start recruiting in-house, the report says. Whilst 90% of respondents had a dedicated legal department, the survey revealed only half (49%) had a dedicated in-house disputes team.

In partnership with Queen Mary, University of London, researchers analysed IA trends in more than 100 multinational businesses, focusing on the financial services, energy and construction sectors.

Overall 73% said IA was well suited to resolving transnational disputes, with preferences strongest in the construction and energy sectors. When asked to rank various dispute methods in order of preference, 68% of construction respondents said arbitration was their preferred method compared to 56% for energy, whilst in financial services, 82% ranked court litigation as their number one method.

Despite this, over two thirds (69%) of in-house counsel in financial services companies felt IA was becoming more suited to resolving their disputes.

“In Romania, based on our market experience, arbitration has become an attractive method of dispute resolution, especially in the last couple of years. This has two explanations. On the one hand, due to the crisis, the number of disputes between companies has increased, and on the other hand, court litigation is a lengthy process, while the courts and judges are overloaded and may possibly lack expertise in technical or economical/financial areas that are the subject matter of the respective dispute. We expect that the number of companies interested in arbitration will increase even further in the future, especially in areas such as real-estate and constructions”, stated Kemal Özmen, Director, Forensic Services and Disputes Assistance, PwC Romania. 

Many businesses opt for arbitration for international disputes due to its speedier process and private nature.  There is usually no appeal process and the final decision is binding, unlike litigation.

About the survey

For a full copy of the report please visit www.pwc.com/arbitrationstudy
The research was conducted in partnership with Queen Mary, University of London and its School of International Arbitration. Over 100 corporate counsel at businesses around the world were interviewed for the study.

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