Big City firms have caps in hand

City transactional lawyers have been talking about little else but liability caps today, after our story that Clifford Chance has introduced a formal policy on the issue.

Today’s edition of The Lawyer reveals that the magic circle firm now asks all clients for a liability cap of €70m (£47.54m) on buy-side due diligence. Ashurst and Linklaters are in the same camp. It’s the beginning of a bandwagon.

Lawyers are also asking how the banks will react. All eyes are on Royal Bank of Scotland (RBS), which dislikes liability caps so much that it has banned its panel firms from using them.

Other banks have quietly accepted that liability caps are here to stay. Unusually, it looks as if RBS may be one of the very few sticking to a hard line.

We predict lots of frank talking over the next few months.