In the latest Legal Week/EJ Legal Big Question survey, nearly half (47%) of respondents said they believe City firms’ unwillingness to litigate against banks is undermining public interest.
More than two-thirds of respondents believe there is a shortage of law firms with sufficient expertise to act for those seeking to sue banks, with 34% citing it as a major shortage and 37% as a slight shortage. This is a result of the conflicts caused by the size of panels that banks operate.
Stephenson Harwood head of commercial litigation John Fordham said: “There is a shortage of law firms to act against banks for fear of losing out on lucrative transactional work. This is further compounded by the fact that there are only a few firms in the mid-tier who have the track record and expertise to deal with what is often very complex banking litigation.”
Slaughter and May head of dispute resolution Elizabeth Barratt added: “With the very complex financial cases that arise, it is important to know how the market works — and there are not many firms operating regularly in the realm of major commercial transactions, as well as sophisticated financial products.”
The survey follows a recent scenario in which Clifford Chance (CC) missed out on a major instruction for top corporate client British Energy in its dispute with Credit Suisse — a major banking client of CC.
The dispute saw Barlow Lyde & Gilbert instructed by British Energy for the first time. Barlows remains one of the few major litigation practices in the
Just under three-quarters (70%) of respondents said their firm sometimes dropped clients that were not giving them enough work and prevented them from seeking out other opportunities in their sectors. Only 2% said their firm often dropped clients and 28% said they never would.
Hammonds Birmingham dispute resolution head Ann Benzimra said her firm would fall into the ‘sometimes’ category. She commented: “We have a number of tools to monitor the relationships with clients. Stopping a client relationship is not always related to the amount of work they give you. Profitability, labour intensive levels, suitability to our skills and how quickly we receive payments are all factors.”
The survey also showed a vast majority of respondents thought their firm had become a lot (50%) or a little (41%) more active in the management of its client base over the last five years.
In addition, 25% of respondents said they would support the introduction of a ‘cab rank’ type professional rule that ensured firms did not duck out of acting against banks for fear of upsetting them. Seventy-five percent rejected the idea.
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