A Reuters report has stated that the volume of cases involving FTSE 100 companies in London’s High Court had declined by nearly a quarter as a result of litigation concerning the financial crisis dropping off.
As per data collected by Reuters, the number of legal cases declined from 279 in the 12 months to June 2016 to 206 in the 12 months ending in June 2017. Most of these cases involve financial services companies and typically deal with loan disputes or allegations of mis-selling of financial products.
Cases involving FTSE 100 financial services companies in particular have gone down from 194 in the 12 months ending June 2016 to 146 in the 12 months ending June 2017.
Group Lawsuits On The Rise
The Reuters analysis has also identified a growing trend of group lawsuits.
These kinds of lawsuits are largely financed by third-party litigation funders like Harbour Litigation, wherein the backers cover legal costs in exchange for a share of any compensation won.
Such third-party funders have financed several high-profile legal cases in recent months, including the one involving 6,000 Lloyds shareholders. This ongoing case where the shareholders are suing the bank is backed by Therium.
Therium is also backing the collective lawsuit filed against Google by a former Which? executive director, concerning claims that the company was illegally gathering the personal data of millions of iPhone users in the UK.
Large Corporate May Face More Class Action Lawsuits In Future
.As per a report by law firm RPC with more money getting invested in litigation funders, there is likely to be an uptick in such group cases which may soon start extending to new areas such as asset tracing and arbitration.
Raichel Hopkinson, head of practical law dispute resolution at Thomson Reuters, stated businesses could start facing more class action lawsuits that are financed by litigation funders in specific areas like data protection after the EU’s General Data Protection Regulation comes into force in May.
She added further that major corporates, particularly banks, are now under lesser pressure after spending a decade “fighting off credit crunch-era lawsuits,” but “this could be shortlived respite,” as there could be a jump in class actions financed by “the growing pot of third-party litigation funding.”