Key takeaways:

• • • Violence against judges is escalating 鈥� Targeted shootings, coordinated harassment campaigns, and threats that now routinely follow judges to their homes and families.

    • The rhetoric driving the escalation is coming from the highest levels of government 鈥� The absence of any public denunciation from the Department of Justice is highlighting the source of the problem.

    • Will the violence itself become part of judicial rulings? 鈥� The endgame of judicial intimidation isn’t that judges stop ruling, it’s that the threat of violence becomes a silent presence in the deliberation itself.

NEW YORK 鈥� Those attendees who came to the recent听 to talk about AI, agentic workflows, and the business of legal technology, also were treated to a session that will likely stay with attendees and had nothing to do with AI.

In that session, four federal judges took the stage; but they were not there to talk about pricing models or AI adoption. They were there to talk about staying alive.

Setting the stage

Jason Wareham, CEO of IPSA Intelligent Systems and a former U.S. Marine Corps judge advocate, introduced the session 鈥� a panel of four sitting United States District Court judges 鈥� by speaking of how the rule of law once seemed resolute, yet how that faith in that has been shaken, year after year. He worked hard to frame his observations as nonpartisan, a matter of institutional fragility rather than political allegiance. It was a generous framing, but it was one that would not survive the weight of the ensuing discussion.

The Honorable Esther Salas of the District of New Jersey said that the reason she was there has a name. On July 19, 2020, a disgruntled, extremist attorney who had a case before her court arrived at her home during a birthday celebration. He shot and killed her twenty-year-old son, Daniel Anderl. He shot and critically wounded her husband. She has spent the years since on a mission to protect her judicial colleagues from the same fate.

The new normal

Next, the Honorable Kenly Kiya Kato of the Central District of California described what has changed. Judges鈥� rulings are still based on the Constitution, on precedent, and on the facts; but what’s different is the small voice in the back of a judge’s head. That voice, often coming after a judge issued a decision that they now have to fight against, asks: What will happen after this? It is now expected, Judge Kato explained, that a high-profile order will bring threats. When two colleagues in her district issued prominent decisions, her first thought was for their safety. That is not how it has been historically.

The Honorable Mia Roberts Perez of the Eastern District of Pennsylvania asked how we got here, pointing to language from the highest levels of government: judges called monsters, a U.S. Department of Justice declaring war on rogue judges, and recently politicians bringing justice鈥檚 families into the conversation.

Judge Salas pushed even further. She acknowledged the instinct to frame the problem as bipartisan, but said the current moment is not apples to apples. It is apples to watermelons. The spike in threats since 2015, she argued, traces directly to rhetoric from political leaders using language never before deployed against the bench.

The federal judiciary is looking to break annual records for threats [against judges], and there is an absence of any public denunciation from the Attorney General or the DOJ.

The evidence is not abstract, nor are the victims, and the panel walked through it. Judge John Roemer of Wisconsin, zip-tied to a chair and assassinated in his home. Associate Judge Andrew Wilkinson of Maryland shot dead in his driveway while his family was inside. Judge Steven Meyer of Indiana and his wife Kimberly, shot through their own front door after attackers first posed as a food delivery, then returned days later claiming to have found the couple’s dog. Judge Meyer has just undergone his fifth surgery since the attack.

All of these incidents happened at the judges’ homes.

Judge Salas then played a voicemail, one of thousands that federal judges receive. It was less than 30 seconds long, but it did not need to be longer. While names had been redacted, what remained was a torrent of threats and obscenities, graphic, sexual and violent, delivered with the confidence of someone who does not expect consequences. Some judges receive hundreds of these after a single ruling, often from people with no case before them at all.

The shadow over the courts

Throughout the session, there was a presence the panelists circled but rarely named directly. A shadow that shaped every observation about escalating threats, every reference to rhetoric from the top down, every mention of language never before used by political leaders, of action or inaction the likes of which would have been unthinkable just several years ago. The specifics were spoken. The name, largely, was not.

It didn’t have to be.

Judge Kato said that what was perhaps the most disheartening aspect of all this is that these threats are getting worse. The people who know better are not doing better. Indeed, she said her children think about these problems every day. What will happen to mom today? Will someone come to the house? These are questions children should not have to carry. They did not sign up for this, and neither did the judges.

In 2026, Judge Salas noted, the federal judiciary is looking to break annual records for threats. She also noted the absence of any public denunciation from the Attorney General or the DOJ. The silence, she said, says a lot.

Not surprisingly, the implications extend beyond the judges themselves. As Judge Salas noted, if judges have to weigh their safety alongside the law, ordinary people don’t stand a chance. If one party is stronger, better funded, or more willing to threaten, then the scales tip.

That is the endgame of judicial intimidation. It鈥檚 not that judges stop ruling, but that the violent and the powerful 鈥� indeed, the people least fit to hold the scales 鈥� can tilt them at will.

That concern echoed an earlier warning from Judge Karoline Mehalchick of the Middle District of Pennsylvania. Judge Mehalchick said that judicial intimidation feeds on misunderstanding. When the public no longer grasps why judges must be insulated from pressure or conversely, mistakes independence for partisanship, the threat environment becomes easier to justify, easier to ignore, and harder to reverse.

What is perhaps the most disheartening aspect of all this is that these threats are getting worse, and the people who know better are not doing better.

In his 2024 year-end report, U.S. Supreme Court Chief Justice John Roberts identified four threats to judicial independence: violence, intimidation, disinformation, and threats to defy lawfully entered judgements. The panel discussed this report as prophecy fulfilled. Public confidence in the judiciary has plummeted since 2021, and the reasons are complex. The judges insisted they are still doing their jobs the right way, but the violence is spreading anyway.

What survives

Judge Salas asked the audience to watch their thoughts. Are they negative and destructive, or positive and uplifting? Can we start loving more? She ended by sending love and light to everyone in the room.

The judges were visibly emotional on the stage.

The words were beautiful. They were also, in the context of everything that had just been described 鈥� the killings, the voicemails, the zip ties, the pizza deliveries masking a threat under a murdered son’s name 鈥� resting in a shadow that no amount of love and light could fully dispel on their own.

The room responded with a standing ovation.

Thousands of people came to Legalweek 2026 to talk about the future of legal technology. For one morning, four judges reminded them that none of it matters if the people charged with administering justice cannot do so safely.

So, while the billable hour may survive and the associate will adapt, the harder question, the one that should keep the legal industry awake at night, is whether the bench will hold.

You can find more of听our coverage of Legalweek events听here

Key takeaways:

• • • An additional funding stream, not a replacement 鈥� Ethical capital has the potential to supplement existing access to justice infrastructure by introducing a justice finance mechanism that can fund cases with measurable social and environmental impact.

    • Technology as trust infrastructure 鈥� AI and smart technologies can provide the governance scaffolding required for ethical capital to flow at scale, including standardizing assessment, impact measurement, and oversight.

    • Capital is not scarce; allocation is 鈥� The true bottleneck is not the availability of funds; rather it鈥檚 the disciplined, investment-grade legal judgment required to evaluate risk, ensure compliance, and measure impact in a way that makes justice outcomes investable.

Kayee Cheung & Melina Gisler, Co-Founders of justice finance platform Edenreach, are co-authors of this blog post

Access to justice is typically framed as a resource problem 鈥� the idea that there are too few legal aid lawyers, too little philanthropic funding, and too many people navigating civil disputes alone. This often results in the majority of individuals who face civil legal challenges doing so without representation, often because they cannot afford it.

Yet this crisis exists alongside a striking paradox. While 5.1 billion people worldwide face unmet justice needs, an estimated $3.3 trillion in mission-aligned capital 鈥� held in donor-advised funds, philanthropic portfolios, private foundations, and impact investment vehicles 鈥� remains largely disconnected from solutions.

Unlocking even a fraction of this capital could introduce a meaningful parallel funding stream 鈥� one that鈥檚 capable of supporting cases with potential impacts that currently fall outside traditional funding models. Rather than depending on charity or contingency, what if justice also attracted disciplined, impact-aligned investment in cases themselves, in addition to additional funding that could support technology?

Recent efforts have expanded investor awareness of justice-related innovation. Programs like Village Capital鈥檚 have helped demystify the sector and catalyze funding for the technology serving justice-impacted communities. Justice tech, or impact-driven direct-to-consumer legal tech, has grown exponentially in the last few years along with increased investor interest and user awareness.

Litigation finance has also grown, but its structure is narrowly optimized for high-value commercial claims with a strong financial upside. Traditional funders typically seek 5- to 10-times returns, prioritizing large corporate disputes and excluding cases with significant social value but lower monetary recovery, such as consumer protection claims, housing code enforcement, environmental accountability, or systemic health negligence.

Justice finance offers a different approach. By channeling capital from the impact investment market toward the justice system and aligning legal case funding with established impact measurement frameworks like the , it reframes certain categories of legal action as dual-return opportunities, covering financial and social.

This is not philanthropy repackaged. It鈥檚 the idea that measurable justice outcomes can form the basis of an investable asset class, if they鈥檙e properly structured, governed, and evaluated.

Technology as trust infrastructure

While mission-aligned capital is widely available, the ability to evaluate legal matters with the necessary rigor remains limited. Responsibly allocating funds to legal matters requires complex expertise, including legal merit assessment, financial risk modeling, regulatory compliance, and impact evaluation. Cases must be considered not only for their likelihood of success and recovery potential, but also for measurable social or environmental outcomes.

Today, that assessment is largely manual and capacity-bound by small teams. The result is a structural bottleneck as capital waits on scalable, trusted evaluation and allocation.

Without a way to standardize and responsibly scale analysis of the double bottom line, however, justice funding remains bespoke, even when resources are available.

AI-enabled systems can play a transformative role by standardizing assessment frameworks and supporting disciplined capital allocation at scale. By encoding assessment criteria, decision pathways, and compliance safeguards and then mapping case characteristics to impact metrics, technology can enable consistency and allow legal and financial experts to evaluate exponentially more matters without lowering their standards.

And by integrating legal assessment, financial modeling, and impact alignment within a governed tech framework, justice finance platforms like can function as the connective tissue. Through the platform, impact metrics are applied consistently while human experts remain responsible for final determinations, thereby reducing friction, increasing transparency, and supporting auditability.

When incentives align

It鈥檚 no coincidence that many of the leaders exploring justice finance models are women. Globally, women experience legal problems at disproportionately higher rates than men yet are less likely to obtain formal assistance. Women also control significant pools of global wealth and are more likely to . Indeed, 75% of women believe investing responsibly is more important than returns alone, and female investors are almost twice as likely as male counterparts to prioritize environmental, social and corporate governance (ESG) factors when making investment decisions, .

When those most affected by systemic barriers also shape capital allocation decisions, structural change becomes more feasible. Despite facing steep barriers in legal tech funding (just 2% goes to female founders), women represent in access-to-justice legal tech, compared to just 13.8% across legal tech overall.

This alignment between lived experience, innovation leadership, and capital stewardship creates an opportunity to reconfigure incentives in favor of meaningful change.

Expanding funding and impact

Justice financing will not resolve the justice gap on its own. Mission-focused tools for self-represented parties, legal aid, and court reform remain essential components of a functioning justice ecosystem. However, ethical capital represents an additional structural layer that can expand the range of cases and remedies that receive financial support.

Impact orientation can accommodate longer time horizons, alternative dispute resolution pathways, and remedies that extend beyond monetary damages. In certain matters, particularly those involving environmental harm, systemic consumer violations, or community-wide injustice, capital structured around impact metrics may identify and enable solutions that traditional litigation finance models do not prioritize.

For example, capital aligned with defined impact frameworks may support outcomes that include remediation programs, compliance reforms, or community investments alongside financial recovery. These approaches can create durable benefits that outlast a single judgment or settlement.

Of course, solving deep-rooted inequities and legal system complexity requires more than new tools and new investors. It requires designing capital pathways that are repeatable, accountable, and aligned with measurable public benefit.

Although justice finance may not be a fit for every case and has yet to see widespread uptake, it does have the potential to reach cases that currently fall through the cracks 鈥� cases that have merit, despite falling outside traditional litigation finance models and legal aid or impact litigation eligibility criteria.

You can find other installments of our Scaling Justice blog series here

Key takeaways:

• • • Demand slowdown reverses LFFI gains 鈥� The LFFI鈥檚 Q4 2025 dip reflects a modest demand slowdown, marking a shift from rapid post鈥憄andemic rebound to a more stable, steady market.

    • Transactional practices plateaued while counter-cyclical regain momentum 鈥� Transactional practices leveled off while demand in the litigation, bankruptcy, and labor & employment practice areas accelerated, driven by rising disputes, regulatory pressure, and workforce complexities.

    • Clear opportunity for strategic realignment 鈥� Law firms may be able to shift their staffing toward growing counter鈥慶yclical areas, strengthening their pricing discipline and refining their recruiting processes.

After two consecutive quarters of improvements in the 成人VR视频庐 Institute鈥檚 Law Firm Financial Index (LFFI) score, the fourth quarter of 2025 marked a modest reversal in which it fell, albeit slightly to 61. The key driver behind this decline was a deceleration in demand that was meaningful enough to pull the overall score down and may signal that the market is moving into a more normalized rhythm 鈥� less snapback growth and more steady performance.

To understand what this means in practical terms, it helps to look beneath the headline numbers and examine not just what happened in Q4 2025, but also over the last two years. Then, a clear narrative emerges: Transactional work 鈥� M&A, corporate general, real estate, and tax 鈥� was powering the market in Q4 鈥�24 but largely plateaued in Q4 2025. Meanwhile counter-cyclical practices 鈥� litigation, bankruptcy, and labor & employment 鈥� regained momentum during the same timeframe.

Put differently, the practices that powered growth in the last year are fading as measured against their own baselines, while those practices that performed less strongly then are now starting to take the lead for the legal industry.

Practice level demand dynamics

By applying a magnifying glass to each transactional practice鈥檚 behavior over the past three quarters, one can identify a few important contrasts. The practice that stands out for its lowest growth in Q4 2025 is tax 鈥� and, in fact, across the final quarters of the last three years (even when it had a good performance in early 2025), that momentum didn鈥檛 translate to the end of the year. This indicates that tax has constantly posted the weakest demand growth, bottoming out at -0.9% in Q4 2023, when it was again the practice with the lowest growth. Even in the Q4 2024 鈥� a stronger year for most practices 鈥� tax grew only 1.5%, well below both its transactional and counter-cyclical peers.

This persistent underperformance may reflect several factors, such as increased internalization of routine tax work by corporate tax departments, pricing pressure in highly standardized matter types, and slower deal flow in M&A reducing ancillary tax activity. Whatever the cause, tax鈥檚 muted trajectory has had a dampening effect on overall transactional momentum and has acted as a drag on top-level demand growth.

On the other side of the room, counter-cyclical practices strengthened in Q4 2025 after a softer Q4 2024, nearly reaching the same growth that they presented in Q4 2023. Collectively, these practices rose to around 3.2% in Q4 2025, compared to about 1.5% growth in Q4 2024. This represents a true rebound after an unusually strong 2023, which was likely caused by lingering pandemic-related effects and the period鈥檚 surge in inflation.

Litigation leads the pack

Litigation provides the clearest example of this resurgence. During the Q4 2025, litigation led with roughly 4.3% growth, compared to 2.4% in Q4 2024. Indeed, the practice closed 2025 with renewed momentum, making it the standout in performance among major practices.

Litigation鈥檚 acceleration in late-2025 suggests that court systems have fully normalized, backlogs have largely cleared (in relative terms), and organizations are encountering a more contested operating environment. Regulatory scrutiny, geopolitical risk, supply chain disputes, and workforce-related conflicts all contribute to a litigation profile that is less dependent on economic cycles and more tied to the complexity of today鈥檚 business environments.

By contrast, after bankruptcy demand growth surged to 6.4% growth at the height of the pandemic recovery in 2023, the practice area experienced a dramatic cooldown the following year, falling to 0.4% just 12 months later. However, bankruptcy recovered modestly to 2.8% in Q4 2025, although still far below the extraordinary levels seen during its previous spike.

Taken together, these patterns suggest that corporate clients may be contending with a broader set of pressures 鈥� regulatory instability, workforce management complexity, and the downstream effects of post-pandemic backlogs 鈥� that could continue to generate steady legal demand.

Counter-cyclical trends reflect opportunity, not just reactive demand

The upswing in demand growth for counter-cyclical practices is not necessarily a sign of economic turbulence, however. Indeed, it shows the market can be stable and still produce more litigation, it can be cautious and still require restructuring advice, and it can be steady and still demand intensive employment support. The fact that transactional demand continues at a solid, albeit slowing pace, shows that this is not necessarily the recession-boosted practices that are driving law firm performance.

In fact, in a market in which transactional demand has stabilized and disputes and compliance work is rising, many law firms can use the moment to better align their operating model with the practice areas in which momentum is building and by aligning with actual demand.

For example, as litigation, bankruptcy, and labor & employment areas see higher demand growth, a firm may benefit from adding capacity in those areas, improving staffing leverage, and preventing partner bottlenecks. Meanwhile, steady but flattened transactional demand could call for disciplined, pipeline鈥慴ased hiring.

The practices that powered growth in the last year are fading as measured against their own baselines, while those practices that performed less strongly then are now starting to take the lead for the legal industry.

In addition, lower demand for transactional practices can represent an opportunity for law firms to refine their recruitment processes, as recruiters can take the time to seek those candidates whose skill sets offer added value. Prioritizing the hiring of candidates who bring fresh ideas and technological capabilities to support the tech-driven evolution of legal services may be the push some law firms need to meet the expectations of clients that are increasingly demanding greater value for their dollars.

This does not mean transactional work should be deprioritized, however. Instead, firms should adopt a dual鈥憈rack strategy: Optimize and streamline transactional capacity for efficiency, while strategically expanding counter鈥慶yclical teams in the areas in which demand is accelerating.

Making the strategic choice

On the face of it, it seems that many law firms face a strategic choice between doubling down on counter鈥慶yclical practices or continuing to prioritize transactional work. Current demand performance suggests counter鈥慶yclical areas offer the clearer near鈥憈erm opportunity 鈥� they are growing, resilient, and driven by structural forces such as regulatory scrutiny, workforce disputes, geopolitical risk, and more complex compliance environments.

Further, this environment elevates the importance of pricing discipline. As demand normalizes, clients become more price鈥憇ensitive and will expect efficiency and transparent staffing. Litigation and labor & employment may have more pricing power today, but disciplined pricing across all practices is critical for margin stability.

Indeed, the widening gap between transactional and counter鈥慶yclical practices signals a market in transition. The opportunity for firms lies in balancing these dynamics and aligning staffing, pricing, and operations to navigate uneven growth and capture value in a more complex legal environment.

You can download the听成人VR视频 Institute鈥檚 Q4 2025 Law Firm Financial Index听here

Key insights:

• • • Security deposit disputes are a significant issue in New York City 鈥� Half a billion dollars is locked in security deposits at any given time, and nearly 5,000 official complaints about illegally withheld deposits have been filed with the New York Attorney General since 2023. However, many cases go unreported due to the complexity and cost of pursuing justice.

    • AI-powered tool Depositron helps NYC tenants claim their security deposits 鈥� By guiding users through a simple process and generating customized, legally sound demand letters, Depositron can give tenants the easy access and means to assert their rights.

    • AI tools Like Depositron can improve scale and access to justice 鈥� Depositron’s modular architecture makes it possible to expand to other jurisdictions with similar legal frameworks, providing a scalable blueprint for addressing other legal challenges.

Security deposit disputes are a significant and persistent housing justice issue in New York City. The NYC Comptroller estimates that at any given time. With the as of April, tenants are routinely required to provide large deposits to secure housing.

Since 2023, have been filed with the New York Attorney General, according to Gothamist, but most likely, this only scratches the surface. Most cases go unreported because the time, cost, and complexity of pursuing justice are too high for most tenants.

Despite reforms like the Housing Stability and Tenant Protection Act of 2019, which mandates that landlords return deposits within 14 days and provide itemized deductions for any money withheld, enforcement remains weak and affordable pathways for recourse are slow or not available. And unfortunately for tenants, Legal Aid organizations prioritize eviction defense, not deposit recovery; and the NY AG鈥檚 complaint process is slow and opaque.

AI powered tool delivers agency at scale

To address this challenge,听, a long-time tenant advocate with more than 20 years of experience litigating housing justice cases in NYC courts, and听, CEO and founder of LawDroid (and听contributor to the 成人VR视频 Institute blog site), developed听. This free, AI-powered, mobile phone-accessible tool is available around the clock to help NYC tenants听and those in New York state听recover their security deposits quickly, legally, and without the need for a lawyer. Depositron also has plans to launch in Florida and Chicago soon.

鈥淒epositron delivers more than a legal document 鈥� it delivers agency,鈥� says Nori. Indeed, this encapsulates the tool鈥檚 core value because it empowers tenants to take action and reclaim what is rightfully theirs.

鈥淏y making legal self-advocacy accessible, Depositron fills a gap left by traditional legal services, which often cannot take on these cases due to capacity or cost constraint.鈥�

Depositron guides users through an intuitive, plain-language process to collect relevant details about their housing situation, including lease facts, deposit amount, move-out date, and landlord information. Users also can upload photos that document the apartment鈥檚 condition to strengthen their case. The tool then generates a customized, legally sound demand letter that cites New York laws and incorporates the user鈥檚 evidence. This process not only educates tenants about their rights but also gives them a practical, actionable way to assert those rights without facing the intimidation or expense of seeking traditional legal help.

Not surprisingly, AI is at the core of Depositron鈥檚 effectiveness. Unlike generic form generators, Depositron takes a hybrid approach, combining advanced large language models and structured prompts, together with conditional logic, to answer basic legal questions and capture the unique facts of each dispute and then translate them into a persuasive, legally grounded narrative.

This customized approach simulates the client interview and legal writing process and makes it possible to help thousands of tenants efficiently. Early testing with law students, tenant advocates, and pro se renters demonstrated success. In fact, users reported that Depositron made them feel more confident, informed, and in control because many recovered their deposits faster than they would have through conventional means.

鈥淏y making legal self-advocacy accessible, Depositron fills a gap left by traditional legal services, which often cannot take on these cases due to capacity or cost constraints,鈥� Nori explains. This is a crucial differentiator for Depositron because legal aid organizations and private attorneys are rarely able to assist with disputes over relatively small sums of money.

Poised for expansion in policy and geography

By enabling tenants to send professional, well-researched demand letters at scale, the platform changes the risk calculation for landlords. As more tenants assert their rights with credible legal documents, landlords are incentivized to comply with the law rather than risk penalties or further legal action.

The tool also contributes to systemic change by collecting anonymized data on violation patterns, which can be shared with advocates and enforcement agencies. This data-driven approach enables targeted interventions and supports broader policy efforts to improve housing justice.

By enabling tenants to send professional, well-researched demand letters at scale, the platform changes the risk calculation for landlords.

In addition, Depositron鈥檚 modular architecture is designed for expansion to other jurisdictions with similar legal frameworks, such as California, Illinois, and Massachusetts. The technology also can be partnered with local legal aid organizations to accelerate adoption and impact in new markets. Nori and Martin say they have already heard from advocates in Michigan, Maryland, Washington, Tennessee, California, and Washington DC about building platforms in those markets.

Further, the path taken in Depositron鈥檚 development can offer lessons for the development of future access-to-justice tools. For example, user empowerment and autonomy are essential, and intuitive design is as important as legal accuracy, Nori and Martin discovered. More specifically, targeted solutions for discrete problems can drive meaningful changes, and AI can serve as both the engine and the interface for delivering legal services at scale.

Depositron demonstrates that technology can bridge longstanding gaps in legal access by making protections both real and actionable for everyone, not just those who can afford traditional representation. By transforming a process that traditionally had taken longer than a year to one that can be resolved in a matter of weeks, Depositron restores agency and financial stability to tenants and provides a scalable blueprint for addressing other access-to-justice challenges in the digital age.

You can find out more about how justice tech solutions and tools are working to improve citizens鈥� access to justice here

Key findings:

• • • Conflicting court rulings鈥� Two federal courts have issued opposing decisions on the legality of Trump-era tariffs, creating a jurisdictional clash that may force the Supreme Court to intervene.

    • Massive stakes for importers 鈥� A ruling against the tariffs could trigger large-scale refunds and curtail executive trade authority; a ruling in favor could entrench broad presidential powers around trade.

    • Uncertain timeline & political fallout鈥� With expedited appeals underway and potential Supreme Court review by mid-2026, the litigation is already fueling legislative reform efforts and shaping the future of US trade governance听

Two landmark cases are now at the center of the legal battle over former President Trump鈥檚 use of emergency powers to impose sweeping tariffs. With conflicting rulings from federal courts and billions in trade at stake, this could be the most consequential trade-based decision ever put before the United States Supreme Court.

To help navigate this tricky, complex web of litigation, Stephen Josey, a tax controversy attorney from the international law firm Vinson & Elkins, offered his insight into the current situation, its major factors, and where things may go from here.

Two courts, two paths

The first of the two major cases is听V.O.S. Selections Inc. v. Trump, a consolidated case combining that of a small business importer with separate lawsuits filed by various states that is being tried in the U.S. Court of International Trade (CIT), a specialized court with jurisdiction over customs and trade matters. Meanwhile, in听another case, Learning Resources, Inc. v. Trump, plaintiffs took a more traditional approach, taking it before to the U.S. District Court for the District of Columbia.

While the named plaintiffs are mostly importers and small businesses, the legal fight has drawn in heavyweight political backing. In the CIT case, several states (including Oregon and New York) have filed briefs supporting the challenge, arguing that the tariffs have harmed their economies and exceeded presidential authority. The DC District case has seen similar support, with a coalition of states and trade associations lining up behind the plaintiffs. These aren鈥檛 just isolated business disputes; rather, they鈥檙e part of a broader constitutional clash over the limits of President Trump鈥檚 executive power, with Democrat-led state governments stepping in to defend their interests.

One of the more arcane but critical issues in the litigation is听that of jurisdiction, which can be a make or break for these kinds of cases even before argument on the merits becomes a factor.

Currently, in听V.O.S. Selections and听in another case, State of Oregon v. Trump, the CIT ruled that the tariffs issued by President Trump under the International Emergency Economic Powers Act (IEEPA) were unlawful. The court found that the national emergency declared by President Trump did not justify the remedy. To put it simply, tariffs on goods from China, Mexico, and India were illegal because the triggering emergency (fentanyl trafficking and trade deficits) bore no rational connection to the trade measures imposed, the CIT ruled.

Meanwhile, in听Learning Resources, the DC District court went even further, holding that the IEEPA doesn鈥檛 authorize tariffs at all. The statute, which has historically been used to freeze assets or block specific transactions, contains no mention of tariffs and was never intended as a tool for reshaping global trade.

These rulings are now stayed pending appeal. The U.S. Court of Appeals for the Federal Circuit has agreed to hear the CIT cases en banc on an expedited basis starting July 31, while the DC District court鈥檚 injunction has been paused by the U.S. Court of Appeals for the District of Columbia Circuit. For now, importers must continue paying the tariffs 鈥� but the legal ground beneath them is anything but stable.

What鈥檚 at stake

One of the more arcane but critical issues in the litigation is听that of jurisdiction, which can be a make or break for these kinds of cases even before argument on the merits becomes a factor. Vinson & Elkins鈥� Josey says that while it appears that a Congressional statute gives exclusive jurisdiction to the CIT to consider these challenges to the president鈥檚 authority under the IEEPA, as it has near exclusive authority over tariff-related cases, the DC District court鈥檚 ruling has created a parallel litigation track. While district courts have occasionally weighed in on trade matters, they鈥檝e rarely done so in direct opposition to the CIT.

鈥淪everal other federal district courts 鈥� including one in Florida and one in Montana 鈥� have transferred cases challenging the IEEPA tariffs to the CIT due to a holding that the jurisdictional statute (28 USC Sec. 1581(i)) confers exclusive jurisdiction on the CIT,鈥� Josey notes, further supporting the CIT as the likeliest venue for a true resolution.

Further, the implications of these cases go far beyond the named plaintiffs. If the courts ultimately rule that the IEEPA tariffs were imposed ultra vires 鈥� beyond the President鈥檚 legal authority 鈥� it could trigger听it could usher in a wave of duty refund claims and severely curtail the executive branch鈥檚 ability to unilaterally reshape trade policy. Conversely, if the ruling is in favor of the President鈥檚 actions, it would signal a massive expansion of presidential authority which is likely to reshape the relationship between the U.S. Congress and the President. A case with such substantial implications is all but certain to end up before the Supreme Court.

At that point, there are four likely paths forward:

1. 1. 1. The Supreme Court grants certiorari 鈥� Affirming the lower courts鈥� rulings would greatly curtaining President Trump鈥檚 ability to place tariffs without the authorization of Congress. It could also trigger a return of previously collected tariff revenue.
      2. The Supreme Court reverses 鈥� By restoring broad presidential authority under IEEPA would allow the administration to continue on its current course without oversite.
      3. The Court punts 鈥� By either ruling narrowly or on procedural grounds, the Court could leave the core question unresolved and effectively allow President Trump to continue as is while forcing plaintiffs to go back to the beginning, potentially delaying any ruling until 2027 or 2028.

1. 1. 4. The Court could issue a split decision 鈥� By upholding one ruling while reversing another, the Court could simply complicate the effort even further.

The timeline is fluid. The Federal Circuit鈥檚 expedited review could yield a decision by late summer or early fall. From there, a Supreme Court petition could be filed before year鈥檚 end, with a final ruling possible by June 2026.

Of course, it鈥檚 impossible to know which of the paths the Supreme Court (or even the Appeals Courts) would take, Josey says, adding that this could leave a massive question mark hanging over the US economy, which in turn could potentially set up a substantial wave of significant duty refund claims to consider if things go against the Trump Administration.

Policy fallout and the road ahead

Regardless of the outcome, the litigation has already sparked calls for reform. Democratic lawmakers are eyeing the听Trade Review Act, which would limit presidential authority under IEEPA and require Congressional approval for future tariff actions. But with the current Congress in control of the president鈥檚 party, any action is unlikely until after the 2026 mid-term elections.

鈥淚nternational trade law has always been around, but it wasn鈥檛 recently front of mind until Trump鈥檚 first term,鈥� explains Josey. 鈥淣ow, it鈥檚 front and center 鈥� and the courts are being asked to draw the line.鈥�

Whether that line holds 鈥� or shifts again 鈥� will shape the future of US trade policy for years to come.

You can download a full copy of the 成人VR视频 Institute鈥檚 recent听2025 Tariffs Report听here

Jump to 鈫�

Q1 2025 Law Firm Financial Index Report

Key takeaways in Q1

• • • The drop in the LFFI score indicates a possible significant decline in law firm profitability despite higher client demand for legal services.
    • Law firms implemented aggressive rate increases, growing worked rates by an all-time high pace compared to Q1 2024 levels.
    • Direct expenses 鈥� those related to compensation 鈥� grew in response to continued performance bonus disbursement and ended up surpassing the average rate growth.

A shifting picture of client needs

The first quarter of any year is typically dominated by rate-setting news as law firms implement new rate schedules and test their client’s willingness to accept them. On that front, firms came out of the gate with their most aggressive increases since at least 2005.

Initially, this aggressive rate setting seemed necessary to counteract a forecasted slowing in demand growth. However, as the current trade war heated up, law firms found themselves flooded with client demand in March. Despite the surge, productivity contracted due to one less working day compared to Q1 2024.

The net result of this increase in client demand is that the historically aggressive rate increases of 2025 seem to have been accepted by clients with minimum pushback so far. Indeed, from a realization perspective, law firms seem to be achieving better realization in the Q1 2025 than they did in 2024.

Further, the ongoing trade conflict seems to have given a boost to just about every major practice area. Both transactional and counter-cyclical demand rose significantly, with firms of all sizes finding some level of greater traction. However, one practice in which strong performance was anticipated in 2025 but appears to be underperforming the market鈥檚 expectations is mergers & acquisitions.

While the short-term rates and demand picture may seem solid, challenges are emerging. Direct expenses shot up as law firms competed for talent and paid out performance bonuses from 2024. This may mean a concerning long-term outlook, as the trade war boosts short-term demand but poses risks for future transactional demand.

Concern over the economic outlook

While law firms may be enjoying significant boosts from the client side so far in 2025, there are looming risks. The US economic outlook has notably deteriorated compared to Q4 2024 鈥� just one quarter previous 鈥� with rising expectations of instability, inflation, and even recession. This year was originally forecasted to be relatively unimpressive from a demand profile, however, a deteriorating economy could see the transactional work that is still considered the bedrock of large law firm performance weaken in the long term.

Looking back at the last major recession experienced by the United States, that of the Global Financial Crisis that began in 2007, law firms saw a notable sugar-rush of demand in 2007 as well, helping make it one of their strongest years ever. Then, the floor fell out as transactional work dried up and counter-cyclical work struggled desperately to hold on. It took firms the better part of a decade to rebuild demand back to 2007 levels, a trying period which few firms would consider worth it just to experience a single strong year of demand.

There are concerns that, if the economic situation continues to destabilize and the US indeed plummets into a recession, that law firms risk facing a similar situation, in which the current rush of client demand is the prelude to a similar long-term drop in transactional demand.

However, 2025 still holds potential for stronger-than-expected firm performance, but future prospects are now in jeopardy in a way they weren鈥檛 just a few months ago.

You can download

a full copy of the 成人VR视频 Institute “Q1 2025 Law Firm Financial Index Report” by filling out the form below:

While we have some early signs that the regulation may not move as fast as the technology, the courts have already started tackling these issues, to various degrees of depth.

With the rise in deepfakes, can courts trust video evidence?

Last year, a California judge commented that the ubiquitousness of AI-created deepfakes does not provide carte blanche immunity to celebrities鈥� public comments.

In Huang v. Tesla, the bereaved family of Walter Huang 鈥� a man who died while using Tesla鈥檚 auto-drive feature in 2018 鈥� sued the company for wrongful death in a Santa Clara court. The complaint alleged that the Tesla automobile鈥檚 鈥渄efective state鈥� led to Huang鈥檚 death. Plaintiffs also requested to depose Elon Musk, Tesla鈥檚 co-founder and CEO, regarding his public statements touting Tesla鈥檚 self-driving capabilities and safety in a 2016 recording.

Tesla opposed the request, arguing that because Musk was a public figure, he was subject to many deepfake videos, and as such the authenticity of the 2016 recording was called into question. To this, the Santa Clara judge remarked that Tesla鈥檚 arguments in opposition to the deposition were 鈥渄eeply troubling,鈥� that Tesla鈥檚 鈥減osition is that because Mr. Musk is famous and might be more of a target for deepfakes, his public statements are immune,鈥� and as such this would allow public figures 鈥渢o avoid taking ownership of what they actually say and do.鈥�

鈥淩ight now, people talk about being an AI company. There was a time after the iPhone App Store launch where people talked about being a mobile company. But no software company says they鈥檙e a mobile company now because it鈥檇 be unthinkable to not have a mobile app. And it鈥檒l be unthinkable not to have intelligence integrated into every product and service. It鈥檒l just be an expected, obvious thing.鈥�

鈥� Sam Altman, co-founder and CEO, OpenAI

Before the case was eventually settled, the judge tentatively ordered a limited, three-hour deposition in which Musk could be asked whether he actually made the statements on the recordings.

It seems that in California discovery at least, parties will need more solid footing to deter a discovery tool when alleging AI misinformation.

The rights of an inventor among AI creators

In another legal battle, music labels filed cases in two federal districts courts 鈥� and 鈥� on June 24, 2024, suing online music AI generators for copyright infringement for its AI-generated audio content. The music labels allege that an online music AI generator 鈥渃an only work the way it does by [first] copying vast quantities of sound recordings from artists across every genre, style, and era鈥� 鈥� much of which are recordings owned or exclusively controlled by the suing music labels.

Relatedly, almost exactly one year prior, authors filed a in federal court in the Northern District of California, alleging multiple causes of action, including direct and vicarious copyright infringement, violation of the Digital Millennium Copyright 成人VR视频 Act, unfair competition, negligence, and unjust enrichment. The authors argued that OpenAI was illegally using their works of art to train its ChatGPT. The complaint was eventually amended leaving only the direct copyright infringement claim after the judge scrutinized, among other things, the plaintiff鈥檚 failure to allege substantial similarity between plaintiffs鈥� works and the output of ChatGPT. This case is .

In the patent part of the intellectual property world, the U.S. Supreme Court declined to hear an appeal based on the U.S. Patent and Trademark Office鈥檚 created by AI in April. Computer scientist had previously filed a patent for two inventions that his AI system had generated. The Patent and Trademark Office and a Virginia judge previously rejected the patent applications on the grounds that the inventor listed on the application was not a natural person, as required by federal patent law. The Supreme Court鈥檚 refusal to grant Thaler鈥檚 appeal signals a hard boundary: inventors for patent purposes must be human.

For the flush of AI-related cases alleging copyright infringement of creatives鈥� work product that is to come, a large part of judges鈥� analysis will probably focus on whether AI output is substantially similar to the original works that were entered into the AI tool. In this analysis, judges will have to provide nuance and definition about what makes an invention AI-created and how much AI can be part of the inventing process before the end product is determined to be AI-created.

AI-enhanced video evidence in criminal court

In State of Washington v. Puloka, a Washington State Superior court of AI-enhanced video evidence in a criminal trial because, among other reasons, the forensic video analysis community did not consider it a reliable source of evidence.

Here, the defense attempted to admit into evidence an AI-enhanced version of a smartphone video, arguing that the original video was low resolution, had substantial motion blur, and had fuzzy images. In deciding the admissibility of the recording, the court heard testimony that the AI tool added and changed materials from the original video, and 鈥� while the AI enhancements made the video a 鈥渕ore attractive product for a user鈥� 鈥� it did not maintain the image integrity. As such, the forensic video analysis community would not accept this as a technique to evaluate videos in the legal context.

The court found that using AI to enhance videos at criminal trial was a novel technique, and as such, they would have to pass the Frye test. The Frye test states that 鈥淸t]he standard for admitting evidence utilizing a novel scientific theory or principle is whether it has achieved general acceptance in the relevant scientific community.鈥� The scientific community in this case was the forensic video analysis community, and the defense did not provide sufficient proof that such AI enhancement of video evidence in a criminal trial was generally accepted by this group.

The Patent and Trademark Office and a Virginia judge previously rejected the patent applications on the grounds that the inventor listed on the application was not a natural person, as required by federal patent law.

Despite this decision by the Washington Superior Court, there is an indication, however, that AI-enhanced audio evidence may be more welcome in the courts. While the courts will still likely go through the Frye test and apply the proffered evidence against the standards codified in respective legislation, AI-enhanced audio 鈥� such as the use of the so-called cocktail party effect to dim background noise in audio 鈥� differs in one significant way than that of its video counterpart. In much audio AI-enhancement, AI is used to to help the listener focus on already existing content; in the AI-enhanced video from Puloka, on the other hand, AI added in content.

What鈥檚 next for AI in the courts?

As state courts are witnessing the beginning of AI-related litigation, it won鈥檛 be long before the highest court in the nation will be pulled into the discussion. With an increasingly inter-state and globalized economy and the pace and depth at which AI is being incorporated into , , , and , it is not a question of if but a matter of when the Supreme Court will hear similar issues.

One thing is for sure, AI is moving faster than ever, and sooner or later, all courts will have to grapple with the foundational elements of how AI is treated differently from humans and how it impacts existing laws.

You can find out more about here.

Fundamentally, the Supreme Court鈥檚 decisions in four major cases 鈥� , , , and 鈥� together shift review of decision-making from administrative and regulatory forums into federal courts. Now the judicial system, already overtaxed and plagued by delays, faces an unavoidable deluge of litigation in areas requiring subject-matter expertise with no increase in capacity or resources 鈥� a certain recipe for complications.

An administrative law revolution across 4 cases

Although the reasoning of these Supreme Court decisions varied, each case assumed that the core review and approval of regulatory authority belonged to actors outside the administrative state. Loper Bright indicates that the Court does not merely take issue with the role of agency as arbiter, rather the Court interprets the Administrative Procedure Act (APA) to require independent judicial interpretation of ambiguous authorizing statutes over deference to agency interpretation.

After Corner Post, those challenges to agency regulations need not be constrained to the first few years of their promulgation, but rather may be raised many years later after a plaintiff suffers alleged harm. And as Jarkesy makes clear, the Court now favors juries to render judgment on claims that, for nearly 50 years without challenge, were resolved in agency tribunals. Even when an agency does engage in rulemaking or promulgates a policy, Ohio v. EPA dictates that such exercise of power will be heavily scrutinized under arbitrary and capricious review.

The judicial system, already overtaxed and plagued by delays, faces an unavoidable deluge of litigation in areas requiring subject-matter expertise with no increase in capacity or resources 鈥� a certain recipe for complications.

The Court鈥檚 antagonism toward administrative agencies is hardly new, and it has steadfastly remained silent as to the practical implications of these recent decisions. While last citing , the Court has in recent years eschewed deference to agency expertise in favor of judicial review. In Loper Bright, the Court found that agencies have no special expertise in interpreting Congressional mandates, which will likely herald an onslaught of Loper Bright .

Even more so, Corner Post鈥檚 expansion of standing exacerbates Loper Bright鈥檚 impact on the courts. Corner Post empowers aggrieved parties to bring suit whenever injury may be found, even if a regulation鈥檚 meaning previously appeared to be fixed to a limited jurisdiction. Simply put, this will directly inspire a new set of challenges to regulations headed to the D.C. Circuit Court and to Article III courts (the 94 federal district courts and 13 appellate courts) nation-wide.

Jarkesy ensures that regulators seeking aggressive enforcement will increasingly be forced to defend those efforts in Article III courts. Despite earlier judicial warning signs in cases such as Lucia v. SEC in 2018 in which the Supreme Court questioned the U.S. Securities and Exchange Commission鈥檚 use of administrative law judges, the Jarkesy decision ushers in a new world for administrative bodies. These agencies will be forced to either forego actions traditionally brought in their own administrative forums or . Given their public mandates and ambitions, it is difficult to imagine any downsizing of effort. Instead, what is nearly certain is an increase in Article III litigation.

What鈥檚 most obvious is that each of these rulings and corresponding transfer of authority to the courts promises to open the floodgates of litigation.

Ohio v. EPA joins this cluster of cases, encouraging early challenges prior to enforcement and incentivizing protracted rulemaking. Loper Bright鈥檚 return to instills greater persuasive power to agency decisions that are more thoroughly considered and more consistent with historical interpretations. Should an agency fail to exercise seemingly the most exacting review during rulemaking, then Ohio v. EPA indicates that an arbitrary and capricious challenge is likely to succeed.

Challenges in expanding judicial oversight

Without legislative intervention, Article III courts will almost certainly be overwhelmed by the influx of cases stemming from the Supreme Court鈥檚 administrative law decisions this term. A major part of the problem is a shortage of judges.

Congress has failed to pass any comprehensive legislation addressing the capacity of our federal district courts since 1990. For more than 30 years, have been authorized in the federal court of appeals. Since 2003, there have been no new judgeships in federal district courts. Some jurisdictions have not had a new judge since 1978.

The static number of judicial posts in recent decades 鈥� at odds with the commensurate growth in population and litigation 鈥� has burdened the judiciary with increasingly large caseloads. Filings per judge have increased by around 20% in federal appeals and district courts. that with so few federal judges, concerns are mounting as the judiciary struggles to balance the burdens of delay against the danger of rushed judgments.

Congress has failed to pass any comprehensive legislation addressing the capacity of our federal district courts since 1990.

Recent efforts are underway at the margins to remedy these shortages. In 2022, the Judicial Conference of the United States , a metric assessing the relative complexity of each case and assigning a value to it. (To understand the weighting protocol better, where a loan default may count as a fraction of a weighted case, an antitrust case may count as more than three weighted cases.)

The Conference has established a threshold of 430 weighted filings as a signal that additional judicial positions are needed. In assessing the current caseloads, the Conference identified eight courts with weighted caseloads in excess of 600 and three in excess of 700. In March 2023, the Conference recommended creating an additional 66 permanent district court judgeships and converting various temporary judgeships into permanent positions.

In response to these recommendations, bipartisan leadership proposed the in the Senate, seeking to address the compounding problem by largely adopting the Judicial Conference鈥檚 recommendations over the course of 12 years. The proposed legislation in August and .

However, the relief promised by the potential passage of the JUDGES Act is undermined by the recent Supreme Court decisions. While passing the JUDGES Act would grant long overdue relief to overworked courts, it was drafted prior to the recent Supreme Court decisions. As a result, the judicial expansion contemplated under the Act does not take into account the potentially dramatic increase in litigation likely to come out from Loper Bright and similar cases.

In light of these recent rulings, the Conference should consider revising their proposed expansion of the federal judiciary to address an anticipated increase in litigation 鈥� and the legislature should then revise the JUDGES Act accordingly. Additionally, Congress should provide clearer delegation to agencies or address the impact of the procedural changes by legislation. Ultimately, these efforts will require a time-intensive, proactive effort across agencies and the legislature to head off areas of contention and backlog.

The much more likely scenario, in both the short and long term, is a dramatically increased workload for Article III courts. Passing the JUDGES Act will provide momentary relief, but absent further action, the longstanding challenges of overworked and understaffed federal courts are almost certain to be dramatically exacerbated by the Supreme Court鈥檚 transfer of responsibility from the administrative state to the judiciary.

You can find out more about here.

In fact, since the beginning of the year, litigation related to claims around environmental initiatives, net zero statements, and forced labor issues, are the key areas of increased legal activity around greenwashing, including:

Allegations of contaminants in consumer products 鈥� There has been an increase in cases alleging that consumer products contain contaminants, such as lead and PFAS, according to , a litigation partner at Morgan Lewis. For example, a alleged that products, which were being marketing towards children, contained unsafe levels of lead.

Forced labor in supply chains 鈥� Forced labor cases are also on the rise, with a focus on those that involve supply chain issues. This reflects a broader trend towards holding companies accountable for their supply chains and the ethical implications of their sourcing practices.

, a litigation partner at the Morgan Lewis, says he sees the novel application of forced labor statutes in recent legal cases being focused on consumer claims related to economic harm caused by unethical labor practices in supply chains. These claims argue that human rights violations, such as forced labor abroad, have a direct impact on consumers who buy the end products.

Carbon neutrality claims 鈥� Litigation that is targeting companies鈥� net zero statements have become increasingly prevalent as companies seek to show their commitment to sustainability and appeal to environmentally conscious consumers. “You’re seeing some companies no longer making claims they’re currently carbon neutral,” says , co-head of the Environmental, Social & Governance (ESG) practice at Morgan Lewis. 鈥淭hey still have their aspirational goal of getting there by 2030, but these legal claims are causing companies to be more conservative in statements and disclosures, rather than making specific claims about current achievements.”

At the same time, however, there is growing recognition of the need for greater regulation of carbon offset markets and more rigorous standards for verifying carbon neutrality claims. As the regulatory landscape evolves, companies will need to carefully evaluate their carbon-related disclosures and ensure they can substantiate any neutrality claims.

In addition to the expanding areas of greenwashing cases, recent changes in European Union regulations have provided more precise guidelines for judges, resulting in a shift towards more judgments confirming greenwashing claims, says , a litigation partner at Morgan Lewis based in Germany. Historically, many greenwashing allegations brought by non-governmental organization (NGOs) or consumers were dismissed. This makes this current shift noteworthy, according to Apetz-Dreier, because it represents a move towards stricter scrutiny and accountability for companies on their environmental claims.

Double-edged sword of CSRD

The EU鈥檚 Corporate Sustainability Reporting Directive (CSRD) is having a significant impact on greenwashing concerns and practices in the EU. As companies prepare to comply with CSRD’s extensive ESG disclosure requirements, there is an increased focus on accurate data collection and reporting.

Indeed, the highly prescriptive nature of CSRD is pushing companies to be more cautious and specific in their sustainability claims and disclosures to potentially reduce greenwashing risks.

However, the expanded disclosures required by CSRD may also create new litigation risks themselves, as the information reported can be scrutinized by stakeholders and potentially used as a basis for further greenwashing claims. Companies are having to carefully balance compliance with CSRD against potential legal exposure, especially as the disclosures made in Europe may have implications for litigation risks globally.

Guidance for in-house lawyers

As a result of these trends and growing risks, corporate in-house lawyers need to focus their efforts to best mitigate the increasing risk exposure of greenwashing. Some of these mitigation tactics include:

Carefully reviewing marketing strategy and disclosures 鈥� Corrado recommends for corporate legal functions to take extra care in inspecting their companies鈥� marketing strategy, product labels, and other advertising to ensure that corporate leaders are not making misleading or exaggerated claims about their companies鈥� ESG practices or sustainability. The same goes for disclosure documents.

Offering forward-thinking advice and risk management 鈥� Valenstein notes that in-house lawyers should give forward-thinking advice to their internal clients, including ways to identify areas of risk exposure and develop strategies to mitigate that. They also need to educate their boardrooms and C-Suites on the risks and consequences of greenwashing.

To execute, corporate lawyers need to stay close to their companies鈥� external counsel in order to remain up to date on the latest legal developments and trends in greenwashing litigation. For example, 鈥渙ne of the things that we’ve been watching closely is when the FTC [U.S. Federal Trade Commission] is going to issue its new set of the green guides because it could lead to additional litigation based on guidance the agency puts out there about what types of disclosures companies can and should be making,鈥� explains Lane.

Seek collaboration across departments 鈥擫awyers at companies should collaborate with other in-house corporate functions, such as sustainability, communications, operations, and marketing, to ensure that companies鈥� messaging and disclosures are accurate, consistent, and compliant with regulations.

This collaboration is key to mitigate greenwashing risks. Compliance with CSRD is making data collection and accuracy 鈥� without exaggerating 鈥� in disclosures a critical activity in risk mitigation. Not doing so 鈥渃an lead to future greenwashing claims, because those documents for the disclosure are also advertising materials,鈥� Apetz-Dreier adds.

As the landscape of greenwashing litigation continues to evolve, companies must remain vigilant in their sustainability claims and practices. By having internal legal functions prioritizing these actions, companies can protect their reputations, avoid legal liabilities, and ultimately contribute to a more sustainable and trustworthy future for themselves and their stakeholders.

Plaintiffs launched 47 climate-washing cases in 2023, bringing the total number of such cases in the climate litigation database to 140, the听听showed. The report was released in June and was authored by Joana Setzer, an associate professional research fellow, and Catherine Higham, policy fellow and coordinator of the GRI’s Climate Change Laws of the World project.

“Climate-washing cases have often centered on claims around climate neutrality of products and services, with several recent claims relating to transport,” the report stated. “Cases can also involve financial products and services. For example, in 2023, Australia’s Federal Court ruled that Vanguard Investments’ claims about an ethical bond were false and misleading.”

Of the 77 cases decided to date, 54 have been found for the claimant, the report noted.

The growing attention from regulators, shareholders, and investors on the risks associated with climate litigation highlights the need for insurers and reinsurers to evaluate and better understand their existing frameworks.

Aside from climate-washing cases, financial firms are also at risk from what the authors refer to as “turning off the taps” cases. Six such cases were filed in 2023, bringing the total to 33 since the 2015 Paris Agreement.听Governments, corporations, and company directors are also facing litigation that targets their failure to adapt, integrate climate considerations, and transition risks. Indeed, 97 cases filed in 2023 addressed firms’ consideration of climate risks.

Interestingly, 233 new cases were filed in 2023, including first-time actions in Portugal and Panama, with litigation cases now filed in 55 countries. The report used a dataset containing 2,666 climate litigation cases compiled by the Sabin Center for Climate Change Law at Columbia Law School. Around 70% of these cases were brought after 2015.

Increase in litigation hindering climate progress

In 2023, there was an increase in the number of lawsuits aimed at impeding climate progress. Last year, 50 such cases were documented, some of which fall under the category of strategic litigation against public participation (SLAPP) suit. The purpose of SLAPP suits is to intimidate, muzzle, and financially cripple non-governmental organizations, activists, and journalists. For instance, Shell and its partner Fluor initiated a SLAPP against Greenpeace in the United Kingdom, and TotalEnergies filed a separate (now dismissed) lawsuit against the same organization in France during 2023.

Despite the relatively low number of such cases in the databases, it is evident that SLAPP suits are among the various legal strategies employed by the fossil fuel industry to discourage its adversaries, according to the GRI report. In fact, the report refers to a study conducted by EarthRights International in the United States, which found 152 instances in the past decade in which fossil fuel companies resorted to SLAPP suits to suppress critics.

Additionally, financial regulators are taking a closer look at climate-related lawsuits to better understand how these actions might affect individual companies and the entire financial system, according to the report. The authors acknowledged the significant contribution of Frank Elderson, a member of the European Central Bank’s executive board, who presented a compelling case in 2023 on the potential devastating impact of climate litigation on the banking industry. Similarly, reinsurers are reassessing the risks that climate litigation poses to their current models.

The growing attention from regulators, shareholders, and investors on the risks associated with climate litigation highlights the need for insurers and reinsurers to evaluate and better understand their existing frameworks. Moreover, it emphasizes the importance of developing a forward-thinking strategy to minimize potential vulnerabilities and mitigate future exposures, the authors noted.

What developments mean for companies

Implications from this analysis suggest a shifting landscape in corporate responsibility, legal accountability, and financial risk management concerning climate-related issues. Specifically:

Increased accountability for misleading claims 鈥� With a success rate of 70% for claimants in climate-washing litigation cases, there is a growing trend towards holding companies accountable for misleading claims regarding climate neutrality and sustainability. This high success rate could serve as a deterrent for many companies.

Financial and legal risks increase 鈥� The spike in climate-washing cases, along with other climate-related litigation, poses significant financial and legal risks for corporations. This, in turn, may prompt businesses to invest more in genuine sustainable practices and thorough due diligence to avoid such litigation.

Growing scrutiny indicates a likely spike in regulation 鈥� The increased attention from financial regulators and reinsurers on climate litigation outcomes suggests that the impact of these cases extends beyond individual companies and into the broader financial system. This scrutiny may lead to stricter regulations, changes in risk assessment models, and potentially higher insurance premiums or reduced coverage for companies vulnerable to climate-related litigation.

As climate litigation continues to evolve and expand globally, companies across all sectors must prioritize genuine sustainability efforts, transparent reporting, and proactive risk management strategies to navigate the increasingly complex legal and regulatory landscape surrounding climate change.