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Editorial

London's top disputes practices report high-value cases continuing to emerge from events such as the collapse of financial services firm, Lehman Brothers, and the Icelandic banking sector; moreover, with the expiry of contractual limitation periods in late 2014, even more claims have arisen.

2014 also saw the continuation of large disputes and major regulatory investigations involving financial institutions, as a result of their misconduct; these involved dishonesty, mis-selling and breach of duty allegations, with the number of enforcements and size of fines increasing. Other specific scandals generating litigation included PPI, Libor manipulation, forex manipulation and anti-money laundering failures.

Pharmaceutical, healthcare and energy-sector businesses are also under the regulatory spotlight, and cross-border antitrust, competition and tax cases have meant significant demand for high-quality litigators. Further, the oil price's descent, the Rouble's decline, a possible interest rate increase and the greater use of sanctions have all produced an environment that is likely to produce an increase in litigation.

Recent reforms have also impacted significantly on litigation. Forthcoming court fee increases are likely to effect the ability of some small and medium-sized enterprises, and individual clients, to commence legal proceedings, which could mean an increased use of alternative dispute resolution methods.

Further, the limited commercial viability of conditional fee agreements – whereby a solicitor and client agree to share the litigation risk through a financial arrangement, and part or all of the solicitor fees will be payable by the client only in the event of success – has led to legal advisers developing new funding options; consequently, third party funders have been more than happy to oblige with hybrid arrangements. Some lawyers have also been reluctant to act under the Damages Based Agreements Regulations 2013 (DBAs), introduced as part of the Jackson reforms, because of drafting defects in the governing regulations. But with a working group currently considering changes to DBAs, they could receive greater attention in the future.

International arbitration remains a favoured method of resolving cross-border disputes across all industry sectors, with English law popular as governing law, and London a popular choice of seat; the market also saw a rise in the number of bilateral investment treaty arbitrations.

The trend for leading arbitral institutions to issue modernised arbitration rules also continued during 2014. A number of arbitral institutions enacted new procedural rules; for example, the revised London Court of International Arbitration rules, which became effective in October 2014.

The debt recovery market faced the increase in FCA regulations; with more demanding and more expensive compliance and regulatory requirements, both law firms and clients face new challenges.

On the one hand, lenders, such as financial institutions and their subcontractors, who now have to comply with stricter levels of compliance and regulation, are minimising their panels to control the customer journey, thereby lowering the resources needed for performing the audit requirements, which in turn reduces their costs. The legal market, on the other hand, is witnessing an increased number of consolidation, as both smaller firms and full-service firms, as opposed to those specialising in debt recovery, cannot match the resources and expertise required to satisfy the lenders’ demands.

Powerhouse law firms such as Freshfields Bruckhaus Deringer LLP, Herbert Smith Freehills LLP and Hogan Lovells International LLP, as well as Allen & Overy LLP, Clifford Chance and Slaughter and May all field exceedingly strong, broad dispute resolution practices. However, in recent years, the London dispute resolution market has also seen the successful establishment of several new litigation firms, which have developed new business models and now occupy key segments of the market. Examples include Quinn Emanuel Urquhart & Sullivan, LLP, Stewarts Law LLP, Enyo Law LLP and Signature Litigation LLP.

The most recent high-profile investments in London's litigation market mostly involved the US firms, including: the headline arrival of Cooley LLP in January 2015, which picked up litigators Kevin Perry and Laurence Harris from Edwards Wildman Palmer LLP, which merged with Locke Lord LLP; Akin Gump Strauss Hauer & Feld expanding its dispute resolution offering in London when it acquired much of the litigation team of Bingham McCutchen (London) LLP, which merged with Morgan Lewis; and Cahill Gordon & Reindel launching an English-law City-based litigation practice after hiring litigator Richard Kelly from another US firm, Shearman & Sterling LLP. Also of note, five years after establishing itself in London, Ropes & Gray LLP launched a City-based commercial litigation practice with the hire of K&L Gates LLP former disputes partner, Thomas Ross.

Headline partner moves included: Wendy Miles QC joining Boies, Schiller & Flexner LLP to head its international arbitration team; King & Wood Mallesons hiring investigations, fraud and compliance group head Ian Hargreaves from Addleshaw Goddard LLP, with its own former London litigation head, Alex Leitch, joining Covington & Burling LLP; Fried, Frank, Harris, Shriver & Jacobson (London) LLP's former international disputes head Nick Cherryman joining King & Spalding International LLP; Memery Crystal LLP's former dispute resolution head Bree Taylor being hired by Fladgate LLP; and Stephenson Harwood recruiting commercial litigator Mike Pullen from DLA Piper, where he headed the international trade group and competition department.

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Legal Developments in London for Overview

  • Finding the 
right words

    In the recent case of Newbury v Sun Microsystems [2013], the defendant argued that an offer to settle proceedings was ‘in principle' only and that a binding contract could not be formed until further terms had been agreed and a formal contract had been signed. It supported this argument by referring to a statement, in the offer letter, that the settlement was to be ‘recorded in a suitably worded agreement'. 

    - Macfarlanes

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