Carlton Fields Releases 14th Annual Class Action Survey, Showing Record Spending and Claims, and Caution About Generative AI

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Apr 30, 2025, 10:30 ET

TAMPA, Fla., April 30, 2025 /PRNewswire/ -- Carlton Fields released its 14th annual Class Action Survey, which provides an overview of important issues and practices related to class action matters and management. The annual publication reports on historical trends captured since the inception of the survey and includes information related to emerging issues in class action litigation. Highlights include details on which alternative fee models work best for class actions, trend data for class action waivers, and in-house counsel's concerns about claims arising from the use of generative artificial intelligence.

This year's survey also reports on the continued increase in class action spending, which surpassed $4 billion — an increase of $300 million compared to the previous year — for the first time. Following 10 consecutive years of growth, class action defense remains one of the fastest-growing areas of legal spending and is projected to continue increasing.

Additionally, companies are seeing increases in the number of class actions they face at a given time, with more companies facing class actions than ever before. This trend is placing additional pressure on in-house counsel, who are now spending an extra day per week managing these matters.

Other key highlights in the survey include:

Labor & Employment and Consumer Fraud Dominate: Labor and employment remains the leading area for both class action matters and spending, driven by ongoing layoffs, increased employee access to resources to join class actions, new state regulations, wage and hour claims, and a more aggressive workforce. Consumer fraud ranks second, fueled by rising actions related to the use of personal information, heightened state regulatory scrutiny, and conflicts between new products and services and evolving consumer attitudes and interests.
Securities Fraud Becomes the Top Class Action Risk: Securities fraud is the largest risk for 2024, presenting more than 2.5 times the risk seen last year. Key drivers include volatile stock performance leading to alleged investor losses, sharp market reactions to missed earnings expectations and forward guidance, increased investor activity spotlighting perceived stock underperformance, and heightened regulatory scrutiny of filings and securities-related activities.
Growth in Baseless Claims Tops Concerns, Followed by Use of Generative AI: Six in 10 companies report that baseless claims remain the largest class action risk — down from last year but still the dominant concern. Respondents note that these actions continue to gain volume as courts remain reluctant to dismiss them or to slow new filings. Generative AI has emerged as a significant new risk, as corporate counsel navigate expected claims and impacts, particularly around data privacy and the uncertainty surrounding AI use.
Companies Facing High-Risk Matters Increase While Settlements Drop: The percentage of companies facing high-risk and bet-the-company matters has jumped substantially with an increase in both the size and complexity of claims. Meanwhile, the number of settlements continues to decline, now down to a fraction of prior year rates at 16%.
Cost Control and Use of AFAs: More than four out of 10 companies are using alternative fee arrangements (AFAs) in class actions, showing an uptick over the past four years. Flat fees have replaced phased payments as the top AFA in class actions while a growing percentage of companies have used success fees.

The 2025 Carlton Fields Class Action Survey is based on interviews with general counsel or senior legal officers at more than 300 Fortune 1000 and other large companies across a variety of industries. They shared their thoughts about class action exposure and best practices for class action management.

To download the 2025 Carlton Fields Class Action Survey, please visit www.classactionsurvey.com.

About Carlton Fields: Carlton Fields has approximately 330 attorneys and government and financial services consultants serving clients from offices in California, Connecticut, Florida, Georgia, New Jersey, New York, and Washington, D.C. The firm is known for its national litigation practice, including class action defense, trial practice, white-collar representation, and high-stakes appeals; its insurance practice, including life and financial lines, property and casualty, reinsurance, and title insurance; its regulatory practice; and its handling of sophisticated business transactions and corporate counseling for domestic and international clients. For additional information, visit www.carltonfields.com. (Carlton Fields practices law in California through Carlton Fields, LLP.)