Compensation claims against company directors are set to soar over the next 18 months as Britain embraces US-style corporate litigation, revealed a survey.
According to a report, research by law firm Mishcon de Reya found that stock market lows had prompted dissatisfaction among British shareholders.
Mishcon de Reya commercial litigation partner Adam Epstein predicted that, encouraged by an apparent crack-down by financial regulators, investors would attack executives of major companies with multi-million pound lawsuits.
The research surveyed leading insurers and brokers on the future of Directors' and Officers' (D&O) insurance, said the report.
More than 70% of the survey's respondents said they had seen a rise in D&O claims over the past year.
The law firm predicted another difficult 18 months for executives after almost 95% of respondents said they expected a further rise in D&O claims.
According to the report, more than 70% of insurers and brokers said they expected some businessmen and women to become completely uninsurable.
Epstein said Britain was playing "catch-up" with the US where company directors have been hit by multi-million dollar claims over recent years.
"Post Enron, all eyes have been on the US because of the scale of claims, but it's happening in the UK and will get worse. In the past 18 months alone the volume of claims made against directors' liability policies has rocketed, according to the insurance industry professionals we spoke to, and they're convinced it's just the tip of the iceberg."
Epstein said recent stock market dips and greater regulatory vigilance had contributed to the rise in claims, concluded the report.
