It's yet to break, but a litigation storm is expected to blow through corporate America. And as the US banks brace themselves, their European counterparts look set to get drenched too.
The insurance broker Marsh has warned that European financial services – banks, ratings agencies, insurance companies and hedge funds – will have to weather numerous liability claims in the coming year.
Northern Rock's band of small shareholders took their claim for compensation to the courts last week, while SRM Global, the hedge fund that was the biggest institutional shareholder in the company when it was nationalised, also revealed plans to pursue legal recourse.
Lawyers have warned that the next wave of litigation could come from borrowers who will argue that lenders failed to disclose the full degree of risk taken on board.
However, legal firms in the City are thought to be loath to represent small claimants against giant banks for fear of jeopardising lucrative revenue streams.Reuse content