Compensation claims against directors will soar over the next 18 months as investors demand better levels of corporate governance, according to research by law firm Mishcon de Reya.

Crackdowns by financial regulators, together with corporate scandals at US firms such as Enron and WorldCom, have fuelled dissatisfaction among shareholders and could see a boom in lawsuits. This has already happened in the US and the trend will soon hit the UK, claims commercial litigation partner Adam Epstein.

“People have seen their investments go sour, and the regulators are determined to be seen to be rooting out bad practice,” Epstein told The Times newspaper. The trend would also spark a huge rise in premiums for Directors’ and Officers’ Insurance, he added.

This could create opportunities for recruiters, claims interim management company Executives Online. Many firms are having trouble recruiting financial directors willing to take on additional audit committee roles on top of their existing jobs, said managing director Norrie Johnston.