Across the lawyers' liability field, experience continues to be that claims volumes in general are down, although the severity of claims continues on an upward trajectory (albeit we are seeing a growing difference between the sums initially claimed and ultimate settlement or judgment values). What is driving the reduction in claims numbers, where are the claims still coming from, and what are the current issues which might give rise to future claims?
The economic climate
Our experience is that claims arising from the financial crisis have now largely worked their way through the system or become time-barred. The teams lenders put in place to review loan books and pursue potential claims are, we understand, being wound up, or are keen to dispose of the last remaining claims.
However, it remains to be seen how long this period of relative calm in terms of lender claims will last. We have started to witness once again some of the trends and behaviours in the residential property market which contributed to the last spate of claims: rapid price increases; significant lender appetite including willingness to lend at high loan-to-value ratios; and interest rates which many take the view can only go up. Against this backdrop, a fall in the property market, perhaps in the event of a Brexit (as to which see further below), could see a resurgence of this type of claim.
This is not the only sphere in which the economic climate might lead to vulnerabilities for lawyers. As oil and other energy prices fall, contractual arrangements entered into by companies in those industries may well come under scrutiny.
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