Companies and auditors should be better protected against costly shareholder lawsuits to stem the tide of litigation endangering the competitiveness of US markets, a committee of experts backed by Hank Paulson, US Treasury secretary, recommended on Thursday.

The findings of the influential group are part of wide-ranging efforts by business leaders and politicians to rein in a regulatory and legal system they say is stifling the ability of the US to compete with financial centres such as London and Hong Kong.