The thorny issue of legal costs is set to be the mark of 2010’s top cases, which The Lawyer unveils today ahead of the publication of Lord Justice Jackson’s year-long review into civil litigation costs in England and Wales.
Among the cases that are set to define the year in litigation, Barclays Bank and RBS are both facing multimillion-pound claims from European banks in matters that predate the recession.
Nabarro partner Michael Hales has instructed 3 Verulam Buildings’ Jonathan Nash QC to represent Italian bank Banca Popolare di Intra in a dispute with Barclays dating back to 2001-02 that relates to collateralised debt obligations. The case has taken more than three years to get to the Commercial Court, with the claim issued in July 2006.
Meanwhile, Antony Zacaroli QC of 3-4 South Square will go head-to-head with Essex Court Chambers’ Jeffrey Gruder QC in a dispute relating to a syndicated loan brokered by RBS between Austrian bank Raiffeisen Zentralbank Österreich (RZB) and an Enron subsidiary. Memery Crystal partner Harvey Rands instructed Gruder for RZB.
Such trials mark the return of major bank-on-bank litigation – cases that were few and far between during the economic boom.
Several banks are believed to be exploring legal options in an attempt to recover losses suffered during the recession. So far, however, the sector has refrained from issuing major claims because of the reputational damage such actions could cause.
“Banks don’t want to be seen to be spending taxpayers’ money on lawyers,” one litigator said. “So they won’t sue, or rather they want to keep it quiet.”
Legal costs have not prevented Russian oligarch Boris Berezovksy from pursuing his $5bn (£3.14bn) claim against his ex-business partner and Chelsea FC owner Roman Abramovich – the largest claim currently going through the Commercial Court. Addleshaw Goddard partner Mark Hastings instructed One Essex Court’s Laurence Rabinowitz QC to represent Berezovsky.
By contrast, Russell Jones & Walker (RJW) has assumed the £1m costs risks at stake in its group litigation order against Argos Home Retail Group. The so-called ‘toxic sofas’ case, in which RJW is representing more than 4,000 claimants, is being handled on a conditional fee arrangement (CFA) basis.
The CFA regime is constantly under attack, most recently from the Conservative Party, which recently highlighted the fact that legal costs paid by the NHS Litigation Authority often outweigh the size of the original claim.
Jackson LJ is expected to respond to CFA critics by proposing that alternative litigation models be considered and fees capped in certain areas, such as in personal injury claims.
One source said: “We’re waiting to see what [Jackson LJ] has to say about CFAs. It wouldn’t be too surprising if he wanted to scrap them altogether, but it would be a disaster for access to justice.”
The High Court judge has not been tasked with examining libel legal costs, which falls under the remit of the Department for Culture, Media and Sport.
There will be a renewed focus on libel costs in February, when 5 Raymond Buildings’ Adrienne Page QC goes to the Court of Appeal to fight a libel ruling handed down by Mr Justice Eady on behalf of client Simon Singh, who is appealing the judgment in an earlier case brought by the British Chiropractic Association relating to an article written by Singh and published in The Guardian.
Such are the implications of the case that it has attracted three of the country’s leading judges: Lord Chief Justice Lord Judge, Master of the Rolls Lord Neuberger and Lord Justice Sedley.
For more on the top cases of 2010 please click here.