 "legal, law, judiciary, order")
Legal expenses for Indian corporations surged by 17 per cent in the last financial year (FY24), driven by increased international deal activity, substantial costs related to dispute resolution, and higher compliance expenses, according to annual reports from the top 500 local companies, as reported by The Economic Times (ET).
For the financial year ending March 2024, the Nifty 500 companies incurred Rs 52,568 crore ($6.26 billion) in legal costs, marking a 17.03 per cent increase from the previous year's Rs 44,920 crore, as reported by ET Intelligence Group (ETIG), ET's research arm.
The top 50 companies by market capitalisation account for a significant portion of these legal expenditures. Data indicates that their legal costs rose approximately 17.40 per cent to Rs 21,389 crore, the report said.
Key factors contributing to the rising costs include expansion efforts both domestically and internationally, regulatory expenses, and the high costs associated with litigation and arbitration.
The report quoted Nishith Dhruva, managing partner of law firm MDP & Legal, saying, "The cost of non-compliance has gone up significantly and hence most companies are trying to spend on compliance and other regulatory, which generally goes in the bucket of ‘legal spend’ for several listed companies. It’s a sign of a maturing market and one may see this cost going up continuously.”
Legal costs encompass various expenses such as litigation and arbitration fees, professional services, regulatory submissions, fines, and general stamp duties, among other items.
More From This Section
 "Environment-conscious Indians are turning to sustainable clothing. (File photo)")
 "Delhi airport, Airport")
 "fsn e-commerce nykaa")
 "K Rammohan Naidu, K Rammohan")
 "India-UK, India UK flag")
In FY23, the leading spenders on legal costs were Reliance Industries with Rs 3,286 crore, Sun Pharmaceutical Industries with Rs 2,953 crore, Infosys with Rs 1,726 crore, Larsen & Toubro with Rs 1,550 crore, and Samvardhana Motherson International with Rs 1,287 crore, the report said.
The leading sectors for legal expenditures are infotech with Rs 9,901 crore, pharmaceuticals with Rs 9,496 crore, finance at Rs 5,110 crore, capital goods amounting to Rs 4,321 crore, and oil & gas with Rs 4,065 crore, the report stated.
 "Kejriwal, Arvind Kejriwal, Delhi CM")
 "infosys")
 "Travis Head")
 "nse stock exchange stock market")
 "Doctor Protest, AIIMS Protest, Protest")
