Key Finding
Credit rating agencies are facing growing civil liability as regulators and courts increasingly treat credit ratings as professional assessments rather than protected speech, with emerging liability rules across jurisdictions
Abstract
Credit ratings assess the creditworthiness of an issuer or financial instrument. They help overcome information asymmetries and facilitate the functioning of financial markets. Credit ratings also serve a regulatory function, as they are used, inter alia, to determine the regulatory capital requirements of banks. Credit rating agencies thus act as private gatekeepers in financial markets. The global financial crisis of 2008 revealed serious shortcomings in the credit rating industry and led to a significant tightening of regulation and oversight. This paper focuses on the civil liability of credit rating agencies.
The central issue concerns the liability of credit rating agencies towards investors who suffer losses as a result of excessively optimistic ratings. Credit rating agencies have traditionally been considered largely immune from civil liability. While this remains true to some extent, the paper demonstrates that the legal landscape is evolving. Some jurisdictions have adopted specific liability rules (China, the EU). Courts have tested concepts of quasi-contractual liability, as known in civil law jurisdictions (e.g., Austria, Germany, Portugal, and Türkiye), and in mixed legal systems (e.g., Israel). Similarly, courts have adjudicated cases on the basis of the common law tort of negligent misrepresentation (e.g., Australia, Singapore, the United Kingdom, and the United States).
As a general finding, the emerging public regulation of credit rating agencies appears to trigger corresponding civil duties and, in turn, to enhance liability risks. Credit ratings are increasingly treated as professional assessments. It is therefore less likely today that a court will deny liability on the ground that the rating constitutes protected speech.
The paper presents the key findings of a cross-country study conducted under the auspices of the International Academy of Comparative Law. It examines the relevant law and policy in 18 jurisdictions, including the European Union.
© Patrick C. Leyens, 2026
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