Speaking with Lawyers Weekly, three litigation partners outlined the emerging trends, key risks, and opportunities that legal professionals should be aware of moving into the next financial year.

Corporate conduct and litigation trends

Michael Harmer, chairman and senior team leader at Harmers Workplace Lawyers, believes that given the growing global challenges, corporate businesses will increasingly implement fair change management strategies to help navigate risks more effectively and reduce the potential for litigation.

“We expect our international and local corporate clients to work via fair change management to adapt their practices, policies, and procedures so as to assist their businesses, employees, and other stakeholders in meeting the growing geopolitical, economic, ecological, health and technological challenges, risk managing away from potential litigation,” he said.

However, Harmer warned that despite these proactive efforts, disputes over restraint clauses in employment contracts could rise due to an increasing negligence of the importance of reasonable restraints.

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“We also expect many of our corporate clients to be restructuring their restraint arrangements and to be litigating in the area of restraints as there is a growing lack of respect and understanding for the important and valuable role which reasonable restraints can play in the economy consistent with the public interest,” he noted.

On the employee side, Harmer depicted a grim scenario regarding access to justice in Australia, suggesting that litigation cases will likely continue to be avoided or suppressed.

“The economic (cost) barriers to justice continue to render the Australian justice system an abject, unmitigated farce – and that’s a complimentary view. As a result, most potential litigation will still have to manage its way around the system and disappear into the parallel universe,” he stated.

“[This] ranges from astronomical results involving tens of millions of dollars, for example, for sexual harassment cases to be contained, down to the all-too-common reality of crushed and wasted lives papered over via deep pockets and deeds, paving the way for Harvey Weinstein-esque cover ups of corrupt corporate and government conduct in this country.”

Due to this environment, Harmer anticipates a rise in “whistleblower cases, punitive damages relief, general protections cases, and contract psychological injury cases” will occur this financial year.

Regulatory challenges and legislation changes

From a regulatory standpoint, Alexandra Tighe, a partner at Clayton Utz, noted that corporate Australia should brace for increased scrutiny and challenges across several areas, driven primarily by ASIC’s “strong consumer protection focus”.

“In 2025, ASIC sent a clear message to superannuation funds and trustees, putting them on notice of enhanced regulatory action, particularly in member service delivery failings,” she noted.

“For example, in 2025, ASIC initiated civil penalty proceedings against some of Australia’s largest superannuation trustees for alleged service delivery failures in death benefit claims handling processes, and put the rest on notice of ASIC’s expectations.”

Another essential matter to monitor in FY26 is the heightened enforcement activity related to the provision of unsuitable superannuation advice.

“ASIC has also expressed concerns about provision of unsuitable superannuation advice being provided to vulnerable consumers. ASIC has identified high-pressure sales tactics and the use of social media algorithms to target particular consumers as a key issue for 2025, and we can expect to see increased enforcement activity of unscrupulous operators who engage in this misconduct,” Tighe said.

“Looking ahead to 2026, we can expect ASIC will continue to focus upon the identification of systemic failures with a strong consumer protection focus.”

Tighe also indicated that the introduction of the Scams Prevention Framework Bill 2024 will require companies and regulators to revisit their compliance strategies, urging a more proactive approach to scam prevention in FY26 and beyond.

“The Scams Prevention Framework is now here. The recent passage of the Scams Prevention Framework Bill 2024 introduces new obligations for banks, telecommunications providers, and social media companies to protect their customers from scams,” she shared.

“This new regulatory framework has significant implications for these entities, and we anticipate heightened scrutiny of scam prevention controls and governance frameworks. We can expect the regulators to be active in this space into 2026 as the level of coordination and cooperation between them develops.”

Cyber security litigation

In an era where data breaches and cyber attacks are increasingly common, cyber security remains a top concern for many organisations.

Tighe highlighted the continued rise in cyber litigation, predicting that entities handling data must bolster their risk management frameworks to avoid regulatory action and class action proceedings.

“2025 has demonstrated that cyber attacks and data breaches are not going away any time soon. All entities involved in the handling of data should ensure appropriate risk management frameworks are in place to sufficiently support cyber security,” she explained.

“A failure to do so, leading to a data breach, is likely to lead to regulatory action and/or class action proceedings. There is no reason to doubt that cyber security and data hacks won’t continue to produce substantial litigation in 2027.”

Economic pressures and technological advancements

Although FY26 brings several challenges for the litigation sector, it will also offer opportunities for firms to strengthen their competitive advantage in the market and stay ahead of the curve.

Richard McGilvray, a partner at McGilvray Law, emphasised that in FY26, it’s crucial for litigation firms, particularly boutique ones, to adapt to “economic pressures and technology advancements”.

Given the current economic situation, he explained that clients are becoming increasingly cost-conscious. As a result, McGilvray stressed that litigation firms need to be aware of this trend and adapt their strategies accordingly to stay competitive in the industry.

“Clients are increasingly cost-conscious due to increased inflation, low profit margins, and increased supply costs. Law firms should be working collaboratively with their clients to provide a client-centric and commercial approach to their advice,” he said.

In FY26, AI also presents a key opportunity for firms – and is poised to generate new opportunities in the litigation sector as judicial systems become more open to incorporating AI into legal processes, according to Tighe.

“The courts are taking a more active role and acknowledgement of the potential benefits of generative AI. We expect that in the year ahead, the state and federal courts will continue to refine their approach to the use of AI. The release of the Guidelines or Practice Note foreshadowed by the Federal Court in relation to the use of generative AI is expected to mark a new chapter for all court users,” she shared.

Moreover, McGilvray predicted that if litigation firms do not embrace AI technology this financial year, they risk being left behind as the legal industry increasingly depends on these tools to streamline processes and offer clients more customised legal strategies.

“Lawyers should be investing in cost-effective legal solutions that match their clients’ commercial needs. This means embracing AI to automate as much of the process as possible – law firms will continue to be left behind if they aren’t adapting and embracing technology,” he noted.

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