Liability in the credit rating space

The concept of liability, within the credit rating perspective, is a concept which is fundamentally attached to the lived experience of every form of ‘rating’. Credit reference agencies, credit rating agencies, and now ESG rating agencies all place their exposure to liability at the forefront of their operational thinking, arguably more so than the usual and reasonable level of concern. One reason for this is the core issue of what a ‘rating’ is, and the processes of how a rating is developed. In this chapter, the focus is on how the agencies, particularly the credit rating and credit reference agencies before them, have approached the issue of liability and protecting against it. The chapter will also examine the key issues affecting credit rating regulation regarding applying civil liability.