Post-crunch boom as in-housers lose confidence in slow and expensive arbitration procedures
Today The Lawyer reveals the top trials that will dominate the sector in 2011, as the litigation market goes into overdrive in the aftermath of the recession.
Across the country firms have bolstered contentious practices in anticipation of a litigation tsunami, but many were left disappointed last year as in-house counsel resisted the temptation to take disputes to the courts while they looked for more economic ways to settle claims.
Having exhausted more amenable avenues, companies are now going to the High Court to recoup losses running into millions of pounds.
Norton Rose litigation chief Deirdre Walker said: “It’s an alignment of two things: a lack of liquidity means it’s more difficult to settle, and the sums involved are just so enormous that cases can’t be settled.”
Many are also turning their backs on the arbitration process, which is proving costly and slow compared with the High Court.
“There’s a lack of confidence in the arbitration process,” Walker said.
Another leading partner commented: “The rise in the number of cases going to court has been driven by a move away from arbitration. The problem is you have to have three panel members [in an arbitration]. Many are high-ranking QCs charging several hundred pounds an hour to hear a case. Aligning their diaries is difficult enough, but then you have to pay them.”
Among the cases which will define 2011 are: five international matters involving several jurisdictions; major challenges to regulatory decisions involving the FSA, the OFT and communications regulator Ofcom; and two sets of judicial review proceedings, one against government cuts to school building budgets.
The Lawyer’s selection of the top cases – increased from 10 to 20 to accommodate the boom – shows that litigating parties are instructing huge teams made up of the country’s top legal minds to ensure their money backs a winner.
Brick Court Chambers barristers dominate the list, with 30 appearances. Leading commercial silk Mark Howard QC is instructed on two top cases, including Imperial Tobacco’s bid to overturn a fine imposed by the OFT in relation to the price-fixing of tobacco products.
Jemima Stratford QC, who is also a Brick Court member and who took silk only last year, is also gaining popularity with litigators. She has been instructed by Clifford Chance partner Luke Tolaini to act for tobacco company Philip Morris in its judicial review proceedings against the Government’s effort to bring in a display ban on tobacco products.
Blackstone Chambers barristers make 24 appearances in the list, with silks Dinah Rose QC, Monica Carrs-Frisk QC and John Howell QC brought in to lead on several trials.
Among City firms, Freshfields Bruckhaus Deringer continues to lead the pack. The firm, which saw an 8.1 per cent rise to £250.8m in dispute resolution turnover at the 2009-10 year-end, has six partners instructed in the list.
Freshfields partners David Scott and Simon Orton will lead the novel judicial review challenge launched by the British Bankers Association (BBA) against the FSA and Financial Ombudsman Service (FOS) over regulatory guidance on handling claims related to payment protection insurance.
The January trial will pitch Blackstone star David Pannick QC, leading for the BBA, against Fountain Court ace Michael Brindle QC and Blackstone’s Carrs-Frisk, who lead for the FSA, and 4-5 Gray’s Inn’s Hodge Malek QC, who has been instructed by Russell Cooke for the FOS.
Hogan Lovells is also flexing its litigation muscle with five appearances in the list. Although that is fewer than Freshfields’, the firm is heavily involved with the largest case of the year, JSC BTA Bank v Ablyazov. Partners Chris Hardman, Cary Kochberg and Jeremy Cole are leading for claimant BTA Bank.
On the defendant side, Stephenson Harwood comes into its own, with the firm’s investments in dispute resolution beginning to shine through. Partners Roland Foord, Alan Bercow, Lois Flannery, Stuart Firth and Richard Gwynne have been instructed to help lead the fightback against BTA Bank.
The mammoth legal battle involves 50 leading lawyers including 22 partners, and 32 barristers including eight QCs. The claim focuses on the alleged fraudulent behaviour of the former chair of the Kazakhstan-headquarted JSC BTA Bank, Mukhtar Ablyazov. Mr Justice Clarke and Mr Justice Teare are responsible for case management in the £1.5bn dispute, which has five sub-strands.
It is eclipsed in financial terms only by the battle between Russian oligarchs Boris Berezovsky and Roman Abramovich, which was listed as a leading case by The Lawyer in 2010.
For The Lawyer’s top 20 cases of 2011 click here.