See you in court

10 January 2008 By John Christy

Actions by the plaintiff’s bar have been plumbing historical lows. But litigation remains a significant burden on US companies. Thanks to the subprime mess, lawyers will still have plenty to keep themselves occupied.

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The US Supreme Court has as recently as this week reviewed or declined to review several cases relating to classaction investor lawsuits. Last week's Stoneridge case was seen as particularly important. The 53 ruling said investors can't sue a company's suppliers, bankers accountants and others in a similar position unless the investors had relied on such third parties in making their investments.

A report issued on January 3 by Stanford Law School and Cornerstone Research said securities litigation activity for 2007 as a whole was 14% below the tenyear historical average. Still, litigation rose 43 percent between 2006 and 2007, fuelled by a jump in activity in the second half of the year as the subprime mortgage crisis unfolded and stock market price volatility increased.

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