In the following guest post, Ed Whitworth, the Head of Directors and Officers Liability at Inigo, and Yera Patel, Head of Casualty & Financial Lines Claims and Analytics for Inigo, summarize the results of a recent survey Inigo conducted of U.S. securities litigation defense counsel. The original of the survey summary previously was published on Inigo’s blog, here. I would like to thank Ed, Yera, and Inigo for allowing me to publish the report summary on this site. I welcome guest post submissions from responsible authors on topics of interest to the blog’s readers. Please contact me directly if you would like to submit a guest post. Here is the authors’ article. 


We are pleased to publish our 2023 Defense Counsel Survey.

Last year when we decided to survey the top US securities defense firms on the main trends in D&O litigation and publish the results last year, we did not expect to get such a positive reaction. Readers told us they found the results enlightening and the survey prompted a fierce debate, both among attorneys and in the wider D&O community.

We learned a huge amount from the study and it was a no-brainer to do it again. This time we went bigger, asking the top 50 securities defense law firms in the US 62 questions (compared to asking the top 25 firms 45 questions last year). We would like to thank those who completed the survey for being so generous with their time.

We identified four key themes from their responses. They have evolved from last year although some concerns remain. They are:

  1. US securities class actions and the Federal Bench – a perfect storm?
  2. Derivative actions – a more attractive alternative for plaintiffs?
  3. Bankruptcies – the new driver of securities litigation?
  4. Has the SEC now taken the gloves off?

This year when we went back to Securities Defense firms we wanted to revisit some of the issues we explored last year but also focus on some new and emerging issues we have come across. Previous themes include Securities Class Action trends and Derivative cases, with some new themes, such as Bankruptcies and the make-up of the Federal Bench being explored for the first time.

Much like the 2022 survey, this year’s survey threw up some surprising and informative revelations. The first key finding was that respondents expect to see a material compression in the dismissal rate as the makeup of the Federal bench shifts, reflecting the current Administration’s high tempo and profile of Federal Judge appointments. With approximately 10% of the total Federal Bench appointed by President Biden’s government, their outlook on Securities cases will have a noticeable impact, as they are more likely to allow the Plaintiff their day in Court.

Additionally, respondents raised the prospect of greater bankruptcy litigation as more companies fall into contested Chapter 11 and Chapter 7 processes given the current macroeconomic environment. Breach of Fiduciary Duty and Fraudulent Transfer cases are on the rise as the sheer number of bankruptcies increases. Not surprisingly, Retail and Real Estate were highlighted as areas of particular concern. There was much commentary around the cautious approach needed by Directors of distressed companies.

Other key findings include:

  • Derivative settlements are continuing to increase in severity. The Caremark standard is holding but continues to be eroded in places. Derivative cases are an increasingly attractive option for the Plaintiff Bar.
  • SEC investigations are going formal much earlier and naming individuals at the outset. These cases are therefore becoming much more expensive to defend.

As we did last year, we have made predictions in the next year’s report for 2023. Similarly, we will assess how we did against these predictions next year.

  • Dismissal rates will fall by at least 5% in 2023 relative to the average for the past 10 years.
  • Securities class action filing rates will be higher in 2023 than in both 2022 and 2021.
  • There will be at least five derivative settlements of more than $100m each in 2023.
  • Bankruptcy filings will increase, leading to more breach of fiduciary duty and fraudulent transfer claims.
  • SEC investigations will be a major exposure for companies and insurers over the next 24 months.

Finally, we once again asked our firms to rank the best Plaintiffs’ law firms, based on their effectiveness as shareholder advocates, as litigators and in case outcomes. Bernstein Litowitz Berger & Grossman LLP retained the top spot over Robbins Geller Rudman & Dowd, albeit with a slightly smaller share of the total vote. Both firms received praise, being described as “ highly competent attorneys who bring the best cases” and “very effective… smart, savvy, and tenacious” respectively.

To see the full results, as well as much more detail on the survey results, the report can be found here.