San Francisco, CA – February 12, 2025 – Securities class action (SCA) settlements reached record highs in 2024, even as litigation activity continued its upward trend. According to Woodruff Sawyer’s 16th annual Databox Report, 206 securities class action lawsuits were filed in 2024—a 9% increase from 2023. Meanwhile, total settlement dollars soared to $4.1 billion, setting a record for aggregate annual settlements (excluding billion-dollar cases).
These findings highlight key risk factors for directors and officers (D&O) insurance buyers and carriers, particularly as litigation activity expands beyond IPOs and de-SPAC companies to established, high-profile public companies.
Increased Filings Despite IPO Market Decline
Woodruff Sawyer’s Databox Report underscores a critical divergence: while IPO activity has remained sluggish since 2022, SCA filings have continued to climb. Historically, IPOs have been a key driver of securities litigation. However, recent years have seen a shift, with plaintiffs increasingly targeting large, well-known public companies across industries.
Among the top industries facing litigation in 2024:
- Technology: AI-related disclosure risks have emerged as a new area of scrutiny, with “AI washing” lawsuits becoming more prevalent.
- Retail & Consumer Goods: Companies with evolving consumer demand dynamics post-pandemic remain at risk.
- Healthcare & Biotech: Regulatory scrutiny and market volatility continue to fuel lawsuits in this sector.
Additionally, 19% of lawsuits were filed against companies headquartered outside the U.S., highlighting the continued global reach of securities class action litigation.
2024: A Landmark Year for Settlements
Beyond increased filings, 2024 saw record-breaking settlement activity, with total settlement dollars reaching $4.1 billion—the highest in history outside of billion-dollar cases. Notably:
- Six of the ten largest settlements in 2024 involved technology companies, with total tech industry payouts reaching $2 billion.
- Large-cap, mature companies dominated settlement activity, with 53% of total settlement dollars concentrated in just ten high-profile cases.
Looking Ahead: What This Means for D&O Insurance in 2025
Priya Cherian Huskins, SVP, of Management Liability, notes, “With high-dollar settlements on the rise and litigation risks diversifying, the implications for D&O insurance are significant. While the market remains favorable for buyers, the question remains: How long can this pricing stability last in the face of growing litigation risks?”
About Woodruff Sawyer
As one of the largest independent insurance brokerage and consulting firms in the US, Woodruff Sawyer protects the people and assets of more than 4,000 companies. We provide expert counsel and fierce advocacy to protect clients against their most critical risks in property & casualty, management liability, cyber liability, employee benefits, and personal wealth management. An active partner of Assurex Global and International Benefits Network, we provide expertise and customized solutions where clients need it, with headquarters in San Francisco, offices throughout the US, and global reach on six continents. For more information, call 844.972.6326, or visit woodruffsawyer.com.
