Third of all FTSE 100 litigation involve banks

Banks made up the largest share of High Court cases involving FTSE 100 companies in the year to June 2014, according to new research.

Data from Thomson Reuters shows that of the 178 cases involving the famous share index of companies that made it to the High Court in 2013/14, 39 per cent involved the FTSE 100's five banks; Barclays, HSBC, Lloyds Banking Group, RBS and Standard Chartered.

Furthermore, there were 81 cases involving companies in the financial services sector as a whole. This represents 46 per cent of all High Court litigation with FTSE 100 companies.

Moreover, banks accounted for being the defendant in 69 per cent of the cases in which they were involved, as they face claims brought by consumers for several scandals that arising in the aftermath of the financial crisis.

Commenting on the findings, Raichel Hopkinson, head of the practical law dispute resolution service at Thomson Reuters, said: "What is noteworthy is that, five years after the height of the banking crisis we are still seeing banks and other financial institutions make up the lion's share of big company litigation.

"Although the banking sectors share of all litigation has eased slightly in the last year there is the risk of a second leg of legal disputes resulting from the more recently identified failings in the conduct at banks around market manipulation."

The data from Thomson Reuters suggests the financial services sector has been the source of around half of all FTSE 100 High Court cases since the banking crisis with claims involving mis-selling and market manipulation.

With claimants having six years from the discovery of loss to file a claim, more recent allegations of mis-selling and price rigging may remain a source of litigation against banks and other financial institutions for several years to come.

While the claims relating to the interest rates swap mis-selling and LIBOR manipulation scandals have already come before the courts, allegations relating to 'dark pool' trading and forex market manipulation may lead to more headaches for the financial industry.

"With the financial services sector still accounting for one in two of all cases involving FTSE 100 companies it shows that the sector faces a challenge not just from direct action from the regulators but also from claims from customers and shareholders through the court system," added Hopkinson.

John van der Luit-Drummond is legal reporter for Solicitors Journal