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I hear this excuse all the time, but can anyone give first hand knowledge of how realistic this fear is when giving feedback about performance during a technical portion? Any lawyers or managers here that have faced actual consequences for giving feedback?

Having now been on the hiring side of things for technical interviews, I'll give feedback when asked, but I think that most people don't give feedback because its kind of a pain in the ass if you aren't organized.

Yeah, I think the risk is that there is a larger surface area for recruiters or hiring managers to do it badly: https://www.sfgate.com/tech/article/zenni-49ers-glasses-disc...

Even in countries where said litigation couldn't happen.

In most non-dictatorships, private parties are free to start almost any civil case against each other. The judge may grant a motion to dismiss for things that are obviously bogus, but a decently filed grievance about the hiring process, supported by the counterparty's own statements, would likely require more scrutiny.

That is: the litigation could probably happen in most countries and even not be summarily dismissed.