1 | 2025 – the year that was (and where next)

2025 was a year of increased volatility with heightened geo-political tensions, conflict in Ukraine and Gaza, and a dynamic US trade policy. Markets remained largely resilient. However, signs of strain are starting to show as major economies struggle with intermittent growth and increasing strain on public finances. Against this backdrop, we have seen a variety of claims in the banking and financial markets sector – with a number of significant decisions in the areas of misselling, sanctions, banking duties, swaps and listed securities. We expect claims activity in these areas to continue in 2026.

Investment banks have benefitted from significant trading revenues. However, sustained periods of higher volatility continue to compound difficulties in the valuation of assets and derivatives, with related disputes arising in the context of margin calls, close-outs and pricing. Counterparties are increasingly challenging the assumptions used in mark-to-market processes, particularly where differing valuation methodologies have material regulatory or balance-sheet consequences. We also expect the interplay between valuation uncertainty and regulatory capital treatment to drive disputes between commercial counterparties, lenders, borrowers and regulators.

2025 also saw the continued expansion and diversification of private credit. Whilst a seemingly attractive asset class for many investors, its potential risks were underlined by the high-profile collapse of First Brands group. As discussed in our recent series, we anticipate that the greater concentration of risk in this market, together with the tensions inherent in these structures, lend itself to a range of potential future disputes.

Businesses across the sector seek to harness the benefits, and manage the risks, presented by advances in technology and generative AI. The increasing involvement of such tools in investment management and execution will inevitably have a substantial impact on both market practice and litigation risk.

Technology businesses themselves, led by the so-called ‘magnificent 7’, experienced record-breaking valuations – albeit with other sectors struggling. It seems inevitable that not all investors will come out of the AI goldrush as winners. If and when the music stops, those that don’t may well look to litigation to recoup their losses.