So the class-action lawyers haven't gone away after all. After several years of decline, the number of US lawsuits filed on behalf of angry investors jumped by 43 per cent in 2007, according to statistics compiled by Stanford University's Securities Class Action Clearinghouse. Much of the spike appears linked to the subprime lending crisis - 32 of the 166 fraud complaints directly mention the issue, and financial services companies were the most targeted sector. This is hardly surprising. In the US, reports of potential scandals are a sure way of attracting the litigation sharks. Brouhahas over the allocation of shares in initial public offerings and stock options backdating inspired litigation in past years.

The more intriguing issue is the core litigation rate, which measures lawsuit filings not directly connected to the scandal of the month. Some had hoped that the steady declines in such filings from 2004 through to the first half of this year signalled a fundamental change in the litigation climate. Either reforms were weeding out weak cases, or fraud itself had dropped because high-profile white-collar crime convictions had scared corporate executives honest.

But something else appears to have been at work. The years 2004 to 2006 were marked by rising share prices and low stock market volatility. In other words, investors were fat, happy and not getting many unpleasant surprises. That changed after the credit crunch, as even companies not directly involved with subprime lending started revealing problems - private equity bids falling through or revenue restatements. Investors once again dialled their lawyers. When Cornerstone Research analysed the Stanford data, they found quarterly lawsuit filings track the Vix, the Standard & Poor's 500 implied volatility index. The relationship is hardly perfect - filings rose in 2004 though the Vix was down - and correlation is not causation. But with forecasters predicting rough economic times, the lawsuit lull looks over.

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