The vast majority of the
According to the results of the latest Legal Week/EJ Legal Big Question survey, nearly 25% of senior lawyers are forecasting a substantial rise in class action work with a further 50% of respondents anticipating at least some scope for growth.
Clyde & Co dispute resolution partner John Whittaker said: “If class actions are given a platform through proactive law firm initiatives, it is likely that claimants will seize the opportunity to litigate their claims.”
Just 3% of those polled see no potential for growth, despite a string of major firms — including DLA Piper and Skadden Arps Slate Meagher & Flom — turning their attentions to the sector in recent months.
Clifford Chance dispute resolution partner Matthew Newick said: “We have already seen an increase in multi-party activity such as Railtrack in the
“Across
However, Newick warned: “The procedural mechanisms in the
Herbert Smith dispute resolution partner Anna Pertoldi said: “There is far more fertile ground in the
The survey also revealed that 52% of respondents have singled out product liability as the sector likely to see the largest increase in class actions, followed by shareholder claims (36%), competition cases (9%) and personal injury (3%).
In a surprise result, none of the respondents predict US-style class actions to take off in employment and labour disputes.
Pertoldi explained: “Shareholder actions could be an area for increased group litigation in
Whittaker added: “Some firms are looking at class actions as a means of developing business. This means that lawyers will probably take an active interest in areas where class actions have potential and advertise the opportunity to claimants and, of course, the services of that law firm.”
Nearly three-quarters of respondents (72%) also broadly backed the concept of litigation funding models, such as contingency fees and third-party funding, with 9% branding them essential for access to justice and 19% supporting them for many cases.
However, the models, which are designed to encourage claimant lawyers to take on risky claims, were rejected by 28% of respondents, who fear they could encourage frivolous actions.
According to the research, nearly a quarter of lawyers (24%) think the UK’s general funding model for civil litigation provides very little access to justice while 76% believe the current system works to some degree.
Newick said: “The idea of allowing small claimants access to justice has got to be right. However, we must have controls such as costs penalties to avoid frivolous claims. I am not in favour of contingency fees due to the personal conflict that can put a lawyer in a difficult ethical position.
“There is an increasing perception of legal recourse. However, for many, bringing an action would be impossible, or at least very difficult on an individual basis, due to funding — not least the possible liability to costs.”
The results come after it emerged last week that a number of firms, including Herbert Smith, are considering offering third-party funding options to clients after the sector’s first specialist broker, Calunius Capital, secured approval from the Financial Services Authority to act in litigation and general dispute risk.
The results come in the wake of a series of developments in
In addition, a pioneering claim saw Royal Dutch Shell pay out $450m (£226m) to European investors in relation to allegations of securities fraud.
