According to the sixth annual edition of Baker McKenzie’s The Year Ahead: Global Disputes Forecast report, 82 per cent of respondents expect disputes volumes to stay the same or increase in 2023.

Additionally, 62 per cent of respondents expect cyber security and data disputes to present a risk to their organisation in the coming year, with 58 per cent expecting ESG disputes to present a risk to their organisation and over 85 per cent expressing concerns about internal or external investigations.

The economic cycle is perceived to be the greatest external factor posing a disputes threat — and only 22 per cent of respondents felt fully confident or very confident in their organisation’s level of preparedness for litigation.

Nandakumar Ponniya, Asia-Pacific chair of Baker McKenzie’s dispute resolution practice, said that there were a number of key disputes trends to watch in Asia in 2023.

“In Asia-Pacific, the state of the economy and the volatility of the financial markets rank among the key concerns for our clients. An economic downturn is likely to bring increased defaults and diminished returns on investments and, as a consequence, disputes between parties,” Mr Ponniya said.

“From past experience, such circumstances usually lead to an increase in fraud and misconduct issues as well. Our clients foresee a challenging year ahead, as do we, and anticipate having to deal with disputes arising from data management, governance concerns and post-closing matters in mergers, acquisitions and ventures from recent years, among others. We look forward to working with them to resolve these issues.”

There were also some key external factors posing disputes threats — and whilst COVID-19 was the greatest external factor, concerns about the pandemic have now receded and have been replaced with other anxieties around disputes. Forty-five per cent of respondents see the economic cycle as posing the greatest threat to their organisation in terms of increased exposure to disputes, whilst 38 per cent saw stock market volatility as a key driver.

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Survey respondents also noted the competitive environment as a concern (25 per cent) and geopolitical issues (24 per cent). Amongst those citing geopolitical issues, the dominant responses were around the US, Brexit, and China, with Russia featuring lower down the list.

Global chair of the dispute resolution practice at Baker McKenzie, Claudia Benavides, said that moving forward, organisations should be increasingly prepared for litigation.

“As we have navigated the challenges of COVID-19, lockdowns, war in Europe and high inflation, it seems that uncertainty is the new certainty. New legal developments around the world have further complicated the commercial environment,” she said.  

“In 2023, we expect to see corporations experiencing greater numbers of disputes mainly in the areas of cyber security and data, ESG, post-M&A issues and tax. Against this, our research shows that despite the risks, organisations still feel unprepared for litigation and should be encouraged to involve disputes practitioners as early as possible on matters as complex as those found in the cyber security, ESG and M&A sectors.”