The past year will be remembered by litigators for a very long time. In the same year that civil procedure rule reformer Lord Woolf stepped down as Lord Chief Justice, two of the largest cases ever to have hit the English court system collapsed sensationally amid criticism of the system and the lawyers involved.

In September 2005 Equitable Life settled its £2.6bn negligence claim against its former auditors Ernst & Young. Over the following few months similar claims against its former executive and non-executive directors were also dropped. The last settlement came in December, when Simmons & Simmons and Allen & Overy (A&O), both acting on conditional fee arrangements, settled with Equitable on the basis that their fees would be paid.

But by December the Equitable debacle had been overshadowed by the extraordinary and unforeseen collapse of the BCCI trial. The £850m misfeasance claim brought by the liquidators of the Bank of Credit & Commerce International (BCCI) against the Bank of England reached court in January 2004 and had been rumbling on for 256 court days - nearly two years - before Mr Justice Tomlinson. The trial came to a sudden end, however, on 2 November 2005, when Gordon Pollock QC, lead counsel for the claimants, walked into court and announced that the case was being abandoned.

The Bank of England and solicitors Freshfields Bruckhaus Deringer went on to fight for, and win, an indemnity costs order amounting to £80m. The parties eventually settled the costs issue with the £73.6m payment paid to the bank by the liquidators in November.

Both Equitable and BCCI left the litigation community with uncomfortable questions to be asked, and answered, about case management, strikeout applications and whether some claims should ever reach trial.

Against such an environment it is not surprising that, at several City firms, litigation dropped as a percentage of overall turnover last year. Some managed to maintain actual income on a par with 2005 thanks to the boost provided by the resurgence in corporate work. Most contentious departments are hoping that the usual cycle will occur and the corporate boom will be followed by a rush of disputes, but this may not happen for another year or so.

The biggest drops came at Clifford Chance, CMS Cameron McKenna and Richards Butler. Clifford Chance's litigation income dropped from 20 per cent to 17 per cent of the firm's total income, or from £183m in 2005 to £175.1m this year. This year's fall came on the back of a decrease the previous year from £225m, which was due to the closure of the firm's US West Coast offices. Revenue per partner (RPP) has dipped below the £2m mark, coming in at £1.97m.

The results still leave the firm with the biggest litigation department, but the gap continues to shrink between Clifford Chance and its closest rival Freshfields.

Freshfields had a solid year, with its biggest achievement being the successful outcome of BCCI for the Bank of England. In monetary terms contentious revenue was up by £1m, but dropped slightly as a percentage of the firm's global turnover. RPP in litigation remained solid at £1.54m.

Just behind Freshfields, and closing the gap quickly with turnover of £130m, is Lovells, the magic circle firm's opponent on BCCI. While the Bank of England case brought a fair amount of negative publicity, with Tomlinson J criticising the way the claimants' case was handled, in general Lovells' litigators had a good year. The firm has one of the biggest contentious departments in the City and appeared on a large number of cases during the year. Along with Herbert Smith, Lovells is advising the official committee of asbestos creditors in the ongoing Turner & Newall administration, which was the subject of hearings in the Chancery Division in December 2005.

Lovells also successfully recovered funds from the Bank of India in another part of the BCCI liquidation litigation after a Court of Appeal trial in the summer.

Litigation remains an important part of Herbert Smith's total turnover, bringing in 36.4 per cent of global income, but this has dropped from 42 per cent in 2004 and 40 per cent last year. A strong year overall means that litigation now brings in £107.7m, inching up from last year's figure of £106m.

However, the firm had a difficult year in retaining its litigation forces, with the number of partners falling from 71 in 2004-05 to 68 last year. Assistant numbers are also down after a steady stream of departures during the year. The knock-on effect was that litigation's RPP was up slightly, breaking the £1.5m barrier for the first time at £1.58m.

Personal injury (PI) powerhouse Irwin Mitchell consolidated its place as the UK's fifth-largest litigation firm this year. Litigation turnover was up by 11 per cent in real terms to £89.6m while staying static as a percentage of overall income. Much of this was driven by a large fee-earner workforce handling small PI claims, making RPP a very respectable £1.4m.

Irwin Mitchell's biggest case, which has run on into the current financial year, has been Ann Marie Rogers' fight for controversial breast cancer drug Herceptin. Led by partner Yogi Amin, the case has hit the national headlines. However, the firm is also involved in a large number of group actions against companies in clinical negligence, product liability and major accident cases.

Hot on Irwin Mitchell's heels, and threatening to overtake it next year, is insurance specialist Clyde & Co.

Clydes has increased its litigation work value this year to £87.5m, a rise of nearly £20m, and 5 per cent of turnover. Many of Clydes' biggest cases are still insurance matters, such as the Court of Appeal hearing in Bonner & Ors v Cox & Ors, but the firm is also to be found on commercial issues and acted for the Government in the high-profile case brought by Railtrack shareholders. Aviation work is another growth area following the June 2005 merger with boutique Beaumont & Son.

Clydes has lengthened significantly the gap between itself and magic circle firms A&O and Linklaters. Although neither firm has changed the amount of litigation they do, the success of other firms is pushing them down the table. This year Linklaters, with a litigation turnover of £74.8m, has just sneaked past A&O's £74m. Linklaters' profile could well rise after the recent appointment of litigation and arbitration co-head Christopher Style as a QC. Style appeared as a solicitor-advocate on the March 2006 commercial case of ABB AG v Hochtief Airport GmbH & Another.

Simmons & Simmons jumped into the litigation top 10 this year after another solid performance. Litigation turnover was up by 24 per cent to £65.8m and now accounts for 29 per cent of total income. Average RPP is also increasingly good, reaching £1.2m this year.

There has been no change in the amount of litigation done at Eversheds in percentage terms, with 18 per cent of turnover coming from contentious work. The firm is on a mission to increase its litigation profile and has moved dispute resolution head John Heaps to London for that very purpose.

Also moving up the table is Beachcroft, which is continuing its push into financial services and regulation while maintaining its focus on areas such as healthcare litigation. Revenue was up by 19 per cent to £58.3m, and RPP up by 22 per cent to reach a solid £833,000.

Harder years were had by a number of litigation-heavy firms. Camerons' litigation revenue has dropped this year to £41.7m from £45m, with RPP falling correspondingly, from £1.36m to £1.3m. The department handled a number of financial and banking disputes during the year, but it has once again been unable to repeat its brilliant 2003, when it brought in £48.4m.

Richards Butler and Barlow Lyde & Gilbert (BLG) both had a difficult 12 months. BLG's contentious department accounts for 75 per cent of turnover, and the settlement of big cases such as Equitable - in which the firm represented Ernst & Young - meant that overall income stalled. However, RPP is still reasonably high at £1m.

Richards Butler, which recently announced its intention to merge with US firm Reed Smith, saw a drop in litigation turnover in terms of the percentage of overall income. Whereas in 2005 dispute resolution was half of the firm's entire revenue, this year it accounted for 46 per cent. The total number of partners went down too, from 50 to 48, so RPP dropped only slightly to £863,000.

The firm did pick up a huge piece of new litigation with the hire of BLG partner Richard Spafford, who brought with him the work for insurer Winterthur on the collapse of The Accident Group. Preliminary skirmishes have taken place throughout the year, but a full trial is yet to be heard.

Dropping out of this year's top 20 were Hammonds, Reynolds Porter Chamberlain and Slaughter and May. Slaughters still has one of the smallest litigation groups in the City, with just 11 partners, all of whom bring in significantly more than £2m a year each; but the aggregate total of £28.9m means the firm missed the top 20 by almost £8m.

Hammonds, meanwhile, is in the process of reviewing its practice groups. Litigation turnover now accounts for just 17 per cent of the firm's total turnover instead of 29 per cent, pushing it out of the table.

Most firms say the current financial year has begun better than last year for litigators, but partners are having to work harder than ever for the same results and that, at least, does not seem likely to change.