Much has been written over recent months about the prospects for a wave of credit crunch related litigation in London similar to that experienced in the US.
To date that wave has not materialized, but the reasons for this are debatable. Our experience is that clients have until now largely been focused on reducing their exposure – fixing the problem, rather than who to blame for it.
Certainly, many of us have been busy over recent months advising our banking and financial institution clients about their contractual rights and how best to leverage their commercial positions.
Lehman’s collapse dramatically reduces the options for those looking to manage any losses. It also takes out of the equation the concern of most financial institutions at taking positions adverse to those with whom a continuing business relationship is a commercial necessity.
Given the global nature of the business, it creates a route for litigation to spread between jurisdictions. Some (Lord Falconer among them) identify Lehman as a turning point and are predicting a flood of cases as parties seek to offload losses and liabilities which have now crystalised.
That is perhaps overstating it but the process of apportioning blame will now begin in earnest.
Clare Canning is a litigation partner at Mayer Brown