According to the study, directors are now concerned that businesses will soon be forced to spend more time dealing with litigation issues. The report warns that the risk of liability is a real and expensive matter if they do not face up to growing litigation issues.

In a new report 'Directors in the Dock - is business facing a liability crisis?’ published by Lloyd’s in association with the Economist Intelligence Unit, businesses are urged to anticipate and prepare for future liability risks.

The study revealed that boards nationwide are feeling increasingly challenged by litigation and could soon be forced to spend more time and money addressing these issues.

According to the report, a growing number of business leaders are also concerned about the rise of a US style compensation culture in Europe and Asia and the liability fallout from the current instability in the financial markets.

It further mentions future liability issues that boards should be preparing for; including product recalls which the report says has now become a daily occurrence, rising 50% in Europe in the last year.

But the study’s most worrying revelation pointed at the sharp rise in shareholder activism and the fact that operating environments for businesses are becoming ever more complex.