The number of big-ticket commercial claims launched in the High Court has jumped by 10% over the last year as credit crunch litigation started to reach the courts, says City law firm Reynolds Porter Chamberlain LLP (RPC).
The number of claims for over £25,000 in the High Court has increased to 3,090 in Q4 2009 up from 2,799 in Q4 2008.
Comments Geraldine Elliott, Partner at RPC: "The number of big-ticket commercial court claims climbed rapidly last year. Many of these cases are going to make a real difference to the future of the businesses that are involved, because the amount at stake can be so high."
"A significant number of the claims now coming into the UK courts are likely to be pure credit crunch related cases."
For example, one area where credit crunch claims have started to emerge is litigation relating to the collapse of the Icelandic Banks. There have already been at least five cases relating to their collapse (see box below) and the smallest of those is worth more than £15m.
Says Geraldine Elliott: "The credit crunch was linked to the banking crisis. As London is one of the few global banking centres, much of the banking and capital markets litigation is inevitably going to go through the UK courts."
Geraldine Elliott explains that as many of the financial instruments issued around the world such as bonds, or derivative contracts are written under English law they are also likely to end up in the UK courts. However, some claimants, as in the dispute between Terra Firma and Citigroup, may prefer to see cases fought in the US where damages can be higher.
Geraldine Elliott adds: "As the economy starts to recover it will be interesting to see whether businesses are less motivated to litigate or whether further regulatory investigations relating to the credit crunch will throw up the necessary evidence for a new set of claims."