Alison Clarke says that despite a drop in work at the bar, financial services barristers are working harder than ever
Although some areas of the bar may be facing a downturn, the financial services sector is not one of them. If anything, it is booming. Indeed, solicitors and barristers predict an increase in growth in this area as a result of the introduction of the Human Rights Act in October and the Financial Services and Markets Act in the early part of next year.
According to Blackstone Chambers’ Charles Flint QC, the Human Rights Act is likely to generate (at least initially) a number of challenges to the current regulatory set-up. For instance, Flint predicts that Article 6 (the right to a fair trial) will raise questions about how far the current disciplinary structure of self-regulating organisations meets the requirements of the new act.
Other changes facing the financial services bar are being ushered in with the Financial Services and Markets Act, which will introduce one disciplinary tribunal in order to unify the financial services regulatory bodies. Flint predicts that once the new act is in force, there will be an increase in contentious regulatory cases.
Neil Micklethwaite, head of the financial regulatory group at DLA, also believes that the volume of work has grown because of an increased awareness among clients of the need to ensure that their rules comply with those of the regulators. “Clients are more cautious and so they come to us earlier. They are now seeking advice on how they should comply with the system and whether their controls are satisfactory, rather than waiting until things go wrong,” he says.
But unfortunately for the bar, this increased need for advice does not always lead to more work. If anything, solicitors are doing more non-contentious business in-house, partly because of the increased demands of clients to keep costs down. For instance, Lovells partner Keith Gaines says that he only goes to the bar for cases that are complex or need a heavyweight silk and not for advisory work.
However, cost is not a major factor for solicitors once they decide to use a barrister. Allen & Overy partner Nick Segal says that depth of knowledge and experience are far more important. “Cost is important and I am sensitive to that,” he says. “But if there is a major problem, I am really trying to find someone who I can trust, someone with sound judgement who can give sensible guidance on the difficult issues.”
Overall, if the firm of solicitors is based in London, then so is the chambers favoured by them. For that reason, there are few, if any, sets of barristers outside London that are recommended by City solicitors, with the possible exception of Enterprise Chambers in Newcastle and Leeds.
Leading chambers include One Essex Court and Brick Court Chambers. At 3/4 South Square, where financial services work accounts for about half its fee income, Michael Crystal QC is often mentioned, as is Gabriel Moss QC. William Trower was recently instructed to appoint the provisional liquidators in the Boo.com meltdown.
At 3 Verulam Buildings, leading lights include Michael Blair QC (until July this year he was general counsel to the Financial Services Authority) and Christopher Symons QC, who has been involved in three major pension mis-selling cases, including the leading case of Rothschild v Collyear. Also worth a mention are John Jarvis QC, William Blair QC and Natalie Baylis who does a lot of advisory work.
At Blackstone Chambers, where the fee income from financial services is about 15 per cent of the total, Barbara Dohmann QC, Charles Flint QC, Thomas Beazley and Javan Herberg are highly thought of.
Because of the increasing demand by solicitors for more specialist barristers, the bar is seeing many members move from general sets to those with a niche practice.
Paul Cooklin, senior practice manager at 3/4 South Square, says: “Basically, there is strength in numbers. People want to work with like-minded practitioners so that they get more in-depth work.”
That drive to specialism is also causing an increasing (albeit limited) number of mergers among sets. Whether that trend will continue is unclear, but there are certainly pressures on the small to medium-sized chambers to achieve economies of scale.
The only potential long-term cloud in the sky for the financial services bar is the uncertainly over the UK’s membership into the euro. There is concern in some quarters that failure to join may lead to a loss of London’s reputation as a financial centre, with the inevitable knock-on effect on the amount of work available to the lawyers.
ONE ESSEX COURT
Fee income from financial services accounts for about 25 per cent of the total, with about 30 to 40 per cent coming from company work. It derives a lot of work from banks, some self-regulatory organisations and Lloyds disciplinary tribunals. It has also taken cases on Stock Exchange practise and insider trading.
The head of this 57-strong set is Lord Grabiner QC, a company and commercial lawyer who was made a Labour peer in mid-1999. Last year, he appeared for the Equitable Life Assurance Company in the Chancery Division and Court of Appeal, in a high profile case that ultimately went to the House of Lords.
Elizabeth Gloster QC is another well-known member with considerable experience in litigating high profile cases on financial issues. She recently acted for the defendants in the House of Lords in Canada Trust Company v Stolzenburg, an appeal against fraudulent misappropriations from a pension fund.
Neil Kitchener and Nicholas Strauss QC were involved in the high profile case brought against West Bromwich Building Society in 1998, when they successfully represented almost 100 pensioners whose mortgages were being foreclosed by the society.
BRICK COURT CHAMBERS
This 60-strong set specialises in commercial work, with a heavy emphasis on all aspects of financial services. It has been involved in a number of leading cases over the last few years, including the Maxwell litigation, BCCI and Barings Bank. About 20 of its members are involved in “hardcore” financial services work. Fee income from this specialism accounts for about 20 to 25 per cent of the set’s overall income (a slight increase on last year).
One of the best known of the set is Jonathan Sumption QC, a deputy High Court judge, who recently successfully represented a pensioner against the Equitable Life Assurance Company in his claim for a guaranteed bonus that Equitable had allegedly failed to honour. Sumption was supported by one of the set’s up-and-coming barristers, Simon Salzedo, who is also a chartered accountant.
The set has just notched up another success in the Court of Appeal in the case of Lloyds Bank v Smith & Hayward, in which Mark Hapgood QC successfully represented the bank, arguing that it was not liable to pay on fraudulently altered cheques.
In July this year, Michael Swainston, another of the set’s up-and-coming barristers, successfully represented Eversheds against a claim of professional liability for a takeover that went wrong.