One of the key findings from The Lawyer’s annual round-up of the top 50 global disputes practices is that international arbitration is one of the main battlegrounds for the world’s top litigation teams.
What is also clear is that London is at the centre of the action, a fact that has not gone unnoticed by the top international firms.
“London certainly has to be a place where you increase resources,” argues Gibson Dunn & Crutcher partner Larry Shore. “The way we look at the world, there’s certainly significant growth in international arbitration in London and New York, with arguably some levelling off in Paris.”
Shore’s perception is backed up by statistics from the ICC International Court of Arbitration, which shows London is gradually closing in on the French capital as the world’s favourite city for arbitration (see below).
Globally, however, there is much more than just arbitration keeping firms busy. This year’s top 50 litigation practices, based on the proportion of firms’ 2008 revenue derived from disputes, reflects increasing levels of activity across a wide range of areas.
The list is inevitably dominated by US firms. Strategically and historically litigation is not as important to UK firms, a fact underlined by the presence of only five UK-headquartered firms in the list.
That said, the current performance of some UK firms with strong countercyclical practices (think Stephenson Harwood, where revenue was up 8 per cent at the half year) might encourage firms on this side of the Atlantic to invest a little more in building disputes teams.
Upside of the downturn
One thing is certain – the financial meltdown and the response to it by the world’s regulators is slowly but surely generating increasing levels of work for firms’ contentious practices.
“There’s no question that there are a very large number of cases being developed by regulators,” says Debevoise & Plimpton partner John Kiernan. “We have an SEC that is very busy and hiring staff. It’s a principle of physics that when the SEC increases its staffing, it increases its actions.”
The Lawyer’s figures are based on the most recently completed financial year for both US and UK firms. This means that there is, of course, a time lag in the results.
Debevoise, for example, enjoyed a banner year in 2008 thanks to its Siemens investigation. This year the litigation revenue is expected to dip slightly from 37 per cent in 2008 to around 34 per cent.
But as a general proposition, the proportion of revenue derived from contentious matters among the world’s leading firms grew in 2008 and is continuing to grow during 2009.
“Litigation business is clearly picking up, but it’s not the surge or as dramatic as people expected,” argues Cravath Swaine & Moore London-based partner John Beerbower. “Certainly the initial reluctance to litigate was due to clients conserving cashflow and not wanting to take on any additional discretionary spend. Cash is the principal consideration when there’s uncertainty.”
But although litigation levels may not have sky-rocketed, the world’s top contentious lawyers have had plenty to keep them busy during 2008 and 2009. A snapshot of some of the highest-profile matters confirms this.
On 15 April Washington DC Covington & Burling partner Thomas Johnson confirmed the importance of international arbitration to his firm’s practice when he secured a major victory against Russia for the Spanish holders of Yukos American Depositary Receipts.
Leading WilmerHale arbitrator
Gary Born did the same for his firm when he and partner Wendy Miles won a favorable decision for the Sudan People’s Liberation Movement/Army in an arbitration against the government of Sudan in a dispute over the definition and delimitation of the Abyei Area.
And while Debevoise may have picked up the plum role regarding the Siemens bribery case, Gibson Dunn was appointed as independent US counsel to the Department of Justice and SEC-appointed compliance monitor, Dr Theo Waigel (the former German Minister of Finance) for the next four years. Gibson Dunn partners Joseph Warin, Michael Walther, Mark Zimmer and Benno Schwartz are taking the lead on this matter.
Elsewhere, Orrick Herrington & Sutcliffe partners Peter O’Driscoll in London and Robert Sills in New York spent much of the past three years representing a subsidiary of Norwegian telecommunications provider Telenor in litigation with Russian financial industrial group Alfa Group.
Kirkland & Ellis London partners Rajinder Bassi and Chris Colbridge scored a major victory earlier this year for Egyptian billionaire Naguib Sawiris stemming from the 2005 acquisition of Wind Telecommunicazioni by Weather Investments.
While in New York, Dewey & LeBoeuf represented Mark Cuban, owner of the Dallas Mavericks on one of the most widely publicised SEC insider-trading cases in recent
history, a case that was dismissed with prejudice in August 2009.
And, of course, fraud scandals such as the $50bn (£30.12bn) Bernie Madoff saga have provided a raft of firms – notably Cleary Gottlieb, Latham & Watkins and Lovells – with chunky work.
Lower class action
Sadly for Lovells, its work on Madoff – primarily during 2009 – and in other areas during 2008 was not enough to secure it a berth in the 2008 table. But it should not worry too much. Assuming its merger with Hogan & Hartson goes ahead, it is certain of a place next year.
Globally however, Freshfields still lagged behind most of its US competitors.
As for London, if international arbitration is where it’s at, the much-vaunted era of the class action is yet to take hold.
Although several US firms such as Cohen Milstein, Quinn Emanuel and Hausfeld have launched in the UK in recent years to capitalise on an expected increase in work in this area, there is yet to be a major class action case in the UK.
Quinn Emanuel managing partner Peter Calamari believes cultural differences is the real barrier to class actions taking off in Europe and the UK.
“There’s a cultural bias against litigation in the UK and I think that is much stronger than people realise,” he argues. “In the case of class actions, it’s not something that is well thought of. Then when you look at the most common kind of class action – shareholder disputes – these are much less frequent in the UK.”
The recent passing of a law in Italy that allows class actions is clearly a significant development for the European market, Calamari adds.
“But,” he says, “it will take something particularly spectacular for it to take off in Europe.”
In the meantime, when it comes to disputes, the US will continue to lead the way.
According to the ICC International Court of Arbitration, during 2008 activity in arbitration levels intensified considerably. Demand for ICC arbitration grew by 10 per cent, with 663 new requests for arbitration. The number of ongoing cases rose to above 1,300, more awards were rendered than in any previous year, and the participants in ICC proceedings – both parties and arbitrators – were more numerous and diverse than in the past.
A total of 93 different cities in 50 countries were selected as places of arbitration in 2008. Of these, 72.7 per cent were seated in Europe, 14.1 per cent in Asia and 12.4 per cent in the Americas.
The five most frequently chosen cities, which were the same in 2008 and 2007, accounted for half of all cases.
Additional reporting by Julia Berris
Please click below to view the ‘Top 50 Litigation Firms’.