Securities class action filings in the US are expected to return to pre-pandemic levels over the coming year as economic uncertainty and an increase in litigation funding fuel more disputes, according to a report from specialist insurer and reinsurer Inigo.
The Inigo 2025 Defense Counsel Survey found that almost 72% of respondents anticipate a rise in new claims over the next year compared to 25% last year, with a slowing US economy flagged as the main factor for that expected increase. The number of new claims in the first quarter of the year was already 25% higher than the same period in 2024, with Inigo predicting filings will hit pre-pandemic levels for the whole of 2025.
More than three-quarters of respondents believe that US states and law firms are likely to file more antitrust claims this year, while the boom in AI technology is also likely to see filings increase. Some 73% of respondents expect AI to become central to securities litigation due to risks around AI washing and missed earnings, with Inigo predicting there will be 20 AI-related securities class actions filed in 2025.
At the same time, litigation funding is growing, with Inigo predicting that one in 10 securities class actions will be backed by litigation funding this year. In addition, almost 80% of respondents say more plaintiffs’ law firms are entering the market while firms are litigating cases more aggressively. Some 78% of respondents said they had seen plaintiff lawyers asking for higher settlements.
While filings are expected to return to pre-pandemic levels, Inigo also predicts that this year will see the fewest number of new enforcement actions filed by the Securities and Exchange Commission since 2020, given cuts to headcount across the SEC and the Department of Justice.
Tariffs and global tensions may also impact US securities class actions as disclosure around tariff impacts and earnings guidance triggers investor lawsuits over alleged misstatements. Inigo predicts there will be five or more securities class action filings over the next 12 months related to tariffs or geopolitical issues.
Ed Whitworth, head of financial lines at Inigo, said: “This year’s Defense Counsel Survey underscores the profound transformation underway in securities litigation. From the rise of AI-related claims to the growing influence of litigation funding and geopolitical tensions, the landscape is shifting rapidly.”
Earlier this week, a report from CMS found that the value of UK class actions was rising even as the total number of filings across Europe fell.
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