Compensation

High Court cases against FTSE firms fall but threats remain

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Litigation funding firms have the capital to bankroll class actions

The number of High Court cases involving FTSE 100 companies has fallen 33% to a seven-year low in the last year, from 193 court cases in 2017-18 to 130 in 2018-19, according to Thomson Reuters.

It says the drop is driven primarily by a decline in claims against banks. Cases involving lenders have fallen 65% from their peak of 179 in 2015-16 to 63 in 2018-19.

It has also been helped by fewer claims from the credit crunch era, such as those relating to alleged mis-selling of interest rate swaps.

But Raichel Hopkinson, head of the practical law dispute resolution service at Thomson Reuters, says the amount of cash available to "litigation funders" means firms cannot be complacent about the risk of court action.

Litigation funders are third parties - with no prior connection to the legal action - who agree to finance all or part of the legal costs of a claim in return for a fee or percentage payable from any proceeds recovered

FTSE 100 businesses increasingly face the threat of class actions backed by litigation funders, says Ms Hopkinson.

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