The volume of private lawsuits in the U.S. stemming from the current financial crisis has already surpassed levels seen in the aftermath of the savings and loan debacle two decades ago, according to a new study by Navigant Consulting reported by the Financial Times.
Plaintiffs filed 607 civil cases related to the subprime mortgage market meltdown in federal courts, Navigant found. That compares with 559 lawsuits stemming from the savings and loan turmoil, a six-year period widely viewed as the high-water mark in terms of litigation fall-out from a financial crisis.
“It is perhaps of little surprise that, as the current crisis takes on unprecedented scale, the related litigation would as well,” Jeff Nielsen, head of Navigant’s financial services disputes and investigations group, told the FT.
One lawyer called what’s happening on the state level “scary.”Veronica Rendon, a partner in the New York office of Arnold and Porter, said: “What is scary is that what is happening in the federal courts is only a piece of a picture…it’s an even worse trend once you picture in the states.”
More than half of the new lawsuits tracked by Navigant were filed in the first six months of this year, exceeding the total filed in all of 2007.