A research by Lloyd’s suggests that employer liability claims in the UK could soon reach crisis levels following rising litigation challenges.

Lloyd’s report further warns that businesses must face up to growing litigation issues which are largely encouraged by the global credit crunch.

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.

According to the study, directors are now concerned that businesses will soon be forced to spend more time dealing with employer litigation issues.

The study revealed that boards nationwide are affected by the global credit crunch crisis and increasingly feel challenged by growing litigation figures which are costly and time consuming.

It also shows that 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 employer liability issues that boards should be preparing for in the wake of credit crunch; including product recalls which the report says has now become a daily occurrence, rising 50% in Europe in the last year.