Litigators start to lose those BCCI blues

I wouldn't want to accuse litigators of delighting in the miseries of others, but there is a definite spring in the step of the delegates at today's Legal Week Litigation Forum, which is taking place in London throughout the day.

Last year, the forum was collectively wringing its hands over the fall out the from the Bank of England/BCCI debacle and the dampening effect it was having on big-ticket litigation. This year, attention has turned to the inevitable opportunities the current credit crunch will present to litigators.

At the outset, Lloyds' chief UK economist, Trevor Williams, did his best to manage expectations by reminding everyone that the world economy was expected to continue growing strongly over the next few years. But there was standing room only during a session entitled 'Litigation for private equity and hedge funds - are we prepared?'.

From the sound of it, litigators have in fact been giving quite a bit of thought to the kinds of disputes that private equity houses and hedge funds will throw up in a turbulent market. One delegate said clients had already become noticeably more willing to take courtesy calls in recent months in order to discuss their exposure to risk. It was even suggested that the UK's leading law firms may be forced to revisit their policy of not acting against the major banks in the face of a rash of inter-bank disputes.

Elsewhere at the forum, expectations that class actions will start to take off in Europe were underlined by the presence of two partners from US claimant firm Cohen Milstein Hausfeld & Toll - which recently opened an office in London - Anthony Maton and Rob Murray.

Gillian Eastwood of Freshfields Bruckhaus Deringer said attitudes to class actions in Europe were "littered with misconceptions". She went on to outline a series of reforms taking place across the Continent to facilitate collective action by claimants against defendants with deep pockets. Germany, Spain, the Netherlands and Norway are all current class action hot-spots. The consensus appeared to be that the efforts of legislators to make it easier for people to club together in order to pursue grievances in the courts would lead to a rise of class actions in Europe, but that they would avoid the excesses associated with the US model.

As Andrew Sandler of Skadden Arps Slate Meagher & Flom observed: "In the US it is more the exception than the rule that members of the class end up with meaningful recovery."

The presence of Washington DC-based Sandler at the conference can be explained by the fact that Skadden is one of a number of firms gearing up in London in order to respond to this new trend.

Memories of BCCI are finally starting to fade.

john.malpas@legalweek.com