Subprime Lawsuits Increase
Lawsuits tied to the subprime meltdown continued to increase. The heightened activity reflected a surge in investors lawsuits and contract disputes.
During the third quarter, 131 new subprime-related lawsuits were filed in federal court, Navigant Consulting reported today. Activity increased from 121 new case filings reported in the second quarter.
Third-quarter 2008 volume was the third-highest on record.
Activity during the latest period was driven by a sharp increase in the number of securities lawsuits and contract disputes.
From January through September, 448 subprime-related lawsuits were filed, Navigant said. Year-to-date filings were more than 50 percent higher than the 294 subprime lawsuits filed during all of last year.
During the 21 months ended Sept. 30, Navigant said 742 subprime-related cases have been filed — already exceeding the 559 U.S. savings-and-loan cases filed in the early 1990s.
“The bottom line is that new cases continue to be filed much more rapidly than existing cases are being disposed,” Navigant executive Jeff Nielsen said in the announcement. “We are looking at a traffic jam that will take many years to untangle.”
But Navigant noted that a decrease in borrower class-action filings suggest the current wave of litigation may be maturing.
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