Luvvies strike poses problems for film finance lawyers as union flexes muscles

A predicted bonanza for film finance lawyers hangs in the balance as an actors strike in the US threatens to spread to Europe.

New guidelines for the potential Screen Actors Guild (SAG) strike pose a serious threat to film finance lawyers, who were expecting to benefit from a temporary shutdown in Hollywood. SAG is ordering a strike on pay issues that will effectively stop filming in the US. Previous guidelines were specific to US members working in the US, and the UK film industry had hoped that US studios would switch production to Europe, bringing in more work for film finance lawyers.

But in an effort to prevent US studios wriggling out of the dispute by using foreign actors and shooting overseas, SAG has issued guidelines which say that UK members may work only on films shot outside the US with no US funding. There are few big film productions made in Europe with no US money involved.

Film finance partner Ken Dearsley of Denton Wilde Sapte, whose clients include Universal Television and Sony Pictures Entertainment, says that SAG is an extremely powerful union and that if it manages to control its members in the UK then a strike would affect the whole industry.

"Lawyers, studios, caterers, camera crew - the lot," he says.

But SAG's guidelines are controversial - there is conflict between the idea that all guilds should have their own territory and the argument that they should have control of their members wherever they perform.

Olswang media and communications partner Charles Moore, who acts for Twentieth Century Fox, Miramax and MGM as well as non-US clients, says that SAG's guidelines are not yet set in stone. He says the producers could still respond in an attempt to force the union to modify its restrictions.

Dearsley adds that in the event of a strike lawyers would look towards indigenous productions.

But whether small, low-budget UK films will fill the gap in work is another matter, as Moore says UK actors may refuse work on UK films in order to show solidarity with their US counterparts.

He does say, though, that law firms will not suffer. "We don't just do production work, we also do financing and structuring. We've also got to the end of the tax year, so leaseback work will be pretty buoyant over the next few months," he says.

The strike is planned to start on 1 July.