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Subprime-related litigation skyrocketed in the first three months of the year, with the number of cases approaching filings seen in the early 1990s after the savings-and-loan crisis, according to a new report. In the first quarter of 2008, 170 cases related to subprime litigation were filed in U.S. federal courts, which is close to the 181 cases filed in the last six months of 2007. Over a 15-month period ending March 31, there were 448 subprime-related cases filed, which is soon expected to surpass the 559 savings-and-loan cases of the early 1990s, according to the report. The report, “First Quarter 2008 Update: Reaching New Heights,” was released Wednesday by Navigant Consulting, a global consulting firm. “Subprime litigation in the first quarter really hit with tsunamic force,” Jeff Nielsen, managing director at Navigant Consulting, said during Wednesday’s teleconference with reporters. “If you look at 2007 by comparison, that was a mild breaking wave.” In March 2007, one case was filed every three days, compared to one case a day by the second half of 2007, Nielsen said. But last month, there was an average of two cases a day, he said. Nielsen pointed out that it could take years to resolve the cases. Eight-six percent of the cases filed in the last 15 months are still active, he said. Of the 191 class actions filed in 2007, only four have been class certified. “We are still in the first leg of the race here from the litigation standpoint,” he said. “There is a long road ahead as far as litigation goes and this is a process that’s likely to drag on for some years to come.” In the first quarter of the year, 46% of the cases filed were borrower class actions, 25% were securities cases and 10% were commercial contract disputes. While class actions accounted for 76% of the 170 cases filed, some unusual plaintiffs also entered the scene, such as the cities of Baltimore and Cleveland. Geographically, about half of the cases were filed in California and New York courts. While the report tracked filings in U.S. federal courts, Nielsen said there could be global implications because of the number of multi-national companies involved. In the 448 cases filed over the last 15 months, 42% involved at least one Fortune Global 500 company as a defendant, the report found. Information about obtaining the report can be found on Navigant Consulting’s Web site, www.navigantconsulting.com.

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