January 16, 2013
Haar has posted a draft of Civil Liability of Credit Rating Agencies – Regulatory All-or-Nothing Approaches between Immunity and Over-Deterrence. This paper helps to fill in a gap in the literature about potential liability of rating agencies across the globe. Most attention has been given to lawsuits filed in the US, but the recent landmark case in Australia imposing liability on Standard and Poor’s has reminded us that rating agencies may face liability wherever they may rate.
Haar identifies some cases that may also result in rating agency liabilty: Wochenüberblick, Betriebsberater (BB) 2010, p. 1482 and Bathurst Regional Council v. Local Government Financial Services Pty Ltd (No. 5)  FCA 1200.
She also references a recent French law that expands liability for rating agencies: Loi n° 2010-1249 du 22 octobre 2010 de régulation bancaire et financière (available here). This is in addition to the bill expanding liability that is now being considered by the European Parliament.
She also highlights developments, such as a possible new wave of litigation that may follow from the Australian case in countries where similar products were mis-rated, citing P. Durkin and H. Low, IMF talks of new wave of litigation, Australian Financial Review, November 7, 2012, p. 14.
It would be a great public service if someone maintained a list of cases around the globe involving rating agency litigation. Any takers?