The Root Cause Of Skyrocketing Defense Costs

Law360, New York (October 17, 2014, 10:47 AM EDT) -- Why do the costs of defending securities class actions continue to increase? Because of my writing on the subject (e.g., here and here), I'm asked about the issue a lot. My answer has evolved from blaming BigLaw economics — a combination of rates and staffing practices — to something more fundamental. BigLaw economics is a consequence of the problem, not its cause. I believe the root cause is the convergence of two related factors:

The prevailing view, fueled by defense lawyers, that securities class actions are "bet the company" cases and threaten the personal financial security of director and officer defendants;...

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