Survey highlights £31.1bn set aside for litigation by FTSE100 firms
FTSE100 companies have set aside £31.3bn in the past 12 months to meet legal claims, a 22% rise on the previous year, in anticipation of increased litigation.
Research by Thomson Reuters found widespread expectation of higher legal costs, regulatory fines and compensation claims. Banks, in particular, are stockpiling resources in preparation for a hike in lawsuits and fines, and have set aside £17.4bn, a rise of 27% on the previous year.
Currently, UK-listed banks face claims relating to LIBOR and FOREX manipulation, Ponzi schemes, manipulation of energy markets and PPI mis-selling.
Oil and gas and mining companies account for the next biggest slice of the anticipated legal liabilities, having set aside legal provisions of £7.9bn, or more than one quarter of the £31.3bn total. Energy company BP continues to face litigation in connection with the 2010 Deepwater Horizon crisis despite reaching a settlement last year with the US government and five Gulf states.
The construction and construction materials sector has increased its legal regulatory provisions fivefold from £54.1m in 2014 to £251m in 2015.
The results of the research echo the findings of the Norton Rose Fulbright 12th annual global litigation trends survey of more than 600 corporate counsel at leading global companies. It predicted increased litigation due to a variety of factors, including market volatility and rising regulatory intervention. Class actions were a growing concern among respondents.
Earlier this month, a £14bn claim—believed to be the biggest class action in UK legal history—was filed against Mastercard over its processing fees.
