According to a recent report from the Financial Times, big banks were named as defendants in 157 High Court lawsuits in the 12 months preceding September 2016, causing the number of lawsuits the world’s largest banks were forced to defend at London’s High Court to increase by a third from 115 the previous year.1 A study of court filings by the law firm RPC, which is headquartered in London, found the increase resulted from the continued fallout from the 2008 financial crisis, increased litigiousness on the part of companies, and a surge in the number of third-party litigation funders, who foot expensive legal costs in exchange for a share of any award.
RPC found that during the past five years, the Royal Bank of Scotland was a defendant in the highest number of cases with Barclays coming in second. Cases against the banks include allegations relating to Libor and mis-selling of hedging products.
RPC banking disputes partner Simon Hart said, “The number of claims against banks over the past five years shows the sheer impact of the credit crunch on the litigation market. Litigation was slow to arise in the immediate aftermath of 2008, but since then the banks have borne the brunt of the resulting disputes.” Hart noted that “many financial disputes are settled by banks before lawsuits are formally lodged.”