Ever since 2007 we have had the CDO litigation's. These are in many ways no different to PPI type cases - in that one side says they don't know what they bought whilst the sellers ask otherwise.
Here is a typical example - a school fund allegedly swindled by RBC bank. Let's face it, RBS are one of the better banks too, they are not staffed by the Lehman's jocks or the Bear Stearns mob.
So even in a terrible recession, the litigators can still make fortunes as these cases are for serious money - $30 billion in this case.
The problem is too because of the leverage to trigger losses portfolio's only need to go down by 5% or 10%. In the past few weeks the Mezzanine level of CDO's are off by up to 50% and all equity holders are wiped out if they have any leverage at all. It is hard to see how this can be turned around and demonstrates again the serious dangers of extreme leverage.