Banks’ legal liabilities rose to £9.1bn in 2013, up from £6.4bn the previous year, due to the cost of settling claims to customers over the mis-selling of interest rates.

According to research from Thomson Reuters, banks now account for 37% of the entire legal provisions of companies in the FTSE 100. These totalled £24.6bn, up 29% from last year's figure of £22.1bn.

The oil and gas industry was the largest sector for legal liabilities (40%), with the mining industry representing 7.5%.

In 2013, the big four UK banks set aside nearly £2.5bn – more than a quarter of all banking sector legal liabilities – to cover the cost of settling claims by customers over the mis-selling of interest rate hedging products, the research found.

Last month Royal Bank of Scotland revealed it has set aside £1.9bn to cover the cost of litigation, while Barclays said it would take a £330m charge ‘relating to litigation and regulatory penalties'.

Raichel Hopkinson, head of Thomson Reuters’ Practical Law Dispute Resolution arm said: ‘The unfortunate news for the financial sector is that the government’s plans to reform the UK consumer law regime and the possibility of smaller claims being aggregated to secure third party litigation funding may encourage more claims against banks – and a continuing need for increased legal provision.’

Hopkinson said: ‘With legal risk going from being a minor annoyance to a threat to balance sheets it is not surprising that in-house legal teams are being given more resource and authority and are being asked to report directly to the board.’

Compliance is the top areas of priority for general counsel this year, according to the Chief Legal Officers 2014 Survey for the Association of Corporate Counsel.