FTSE100 companies have been involved in 193 cases in the UK High Court over the last year, with cases involving non-financial services companies rising 29% to 85, up from 66 in 2016/17, says Thomson Reuters.
Thomson Reuters says there has been a growing number of group action claims launched against FTSE100 companies in recent years. Although such claims have been brought against financial services firms on multiple occasions, the latest data suggests this trend towards group action is spreading into other sectors as well.
Group actions against FTSE100 companies in the High Court last year included:
- An action by over 5,000 employees and former employees of a food retailer against the company after an internal auditor stole payroll data, including salary and bank details, of nearly 100,000 staff and posted it online
- Claims by over 100 investors against a food retailer over the effects that revelations of false accounting methods had on the company’s share price
- An action brought by more than 2,000 citizens of a West African country against an oil and gas company as a result of pollution caused by leaks from oil pipelines and associated infrastructure
Thomson Reuters says there could be a further rise in group action claims against FTSE100 companies as a result of the increasing availability of litigation funding. This is when a specialist funder pays the costs of legal claims in exchange for a share of any damages awarded.
Raichel Hopkinson, head of Practical Law Dispute Resolution at Thomson Reuters, says: “The gradual spread of US style class actions to the UK poses a potent threat to large corporates.
“Recent high-profile claims have attracted interest from litigation funders who are now often competing to fund claims. It is safe to assume that if money continues to flow into litigation funding then more FTSE100 companies will face claims from litigants.”