London has extended its lead over New York in the race to attract multibillion-dollar stock market flotations as the cost of fending off US securities lawsuits soars.

On the day that VTB Bank, Russia’s second-biggest bank, priced its $8 billion (£4 billion) flotation on the London and Moscow stock exchanges, new figures show that only one of the top 15 company flotations since the start of the year has gone to a New York exchange.

Last year non-American companies paid out $2.4 billion to settle US securities lawsuits. That was an increase of 85 per cent on the previous year – a rise that lawyers and analysts on both sides of the Atlantic said had deterred overseas companies from raising money on the American markets.

Figures from PricewaterhouseCoopers, the accountants, reveal that, although the number of lawsuits filed in US courts against companies of all nationalities has fallen, those claims are resulting in companies making far bigger payouts, frequently worth more than $100 million.

Meanwhile, London and the emerging markets of China and the Middle East have dominated the first four months of the year for stock offerings, according to data from Dealogic.

VTB’s dual-listing ranked ahead of the China CITIC Bank’s $5.9 billion flotation, the Industrial Bank of China’s $2.05 billion debut on the Shanghai exchange and Ireland’s Smurfit Kappa, which in March raised $1.94 billion in London and Dublin.

London accounted for five of the largest stock offerings this year, including this month’s listing of Russia’s AFI Development for $1.4 billion.

MetroPCS Communications gave New York its biggest stock offering this year with a $1.32 billion fundraiser.

Andrew Gordon, a partner in PwC’s forensic services team, said that companies had been frightened off listing in New York by the cost of class action lawsuits. “They may have no merit, but there is the cost of defending them. Then once a lawsuit has got over its initial hurdle – not been dismissed at first hearing – there is an incentive to settle,” he said.

Linklaters, the City-based international law firm, has doubled its New York litigation presence over the past six months to about 45 lawyers. Larry Byrne, its US litigation head, said: “Companies are becoming increasingly reluctant to list here and to raise money due to litigation risk both on the regulatory and class action side. It certainly preys on companies’ minds more than ever before.”

Peter Watson, litigation partner at the lawyers Allen & Overy, said: “Are we seeing the US regulators pulling back? The view from New York is no, and as sure as night follows day when regulators flex their muscle, behind those investigations come the class actions.”

Meanwhile, all the big London law firms, including Herbert Smith, Freshfields and Clifford Chance, are boosting their Chinese presence to capture an expected wave of red-chip flotations.

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