As interest rates rise and multi-billion-pound bank mergers and acquisitions grab the headlines, law firms appear to be increasingly running scared of taking on the mammoth financial institutions.
The London firm Manches recently made a public stance of its own position, declaring that it does act against banks, even though other law firms are reluctant to do so. Clive Zietman, head of commercial litigation at the firm, says: “I think some banks are deliberately spreading work far and wide to put firms in a position where they can’t take a legal action against the bank because of a conflict of interest.” But others are less willing to offend what are among law firm’s most coveted of clients, with deep pockets and plentiful work.
“There is an environment where all big City firms act for banks in mergers and acquisitions and other major corporate deals and don’t want to set antibank precedents for fear of upsetting their clients. So firms are doubly hamstrung,” Zietman says. “There are remarkably few firms prepared to take action against banks. We’ve had a lot of referrals as a result of the situation.”
This nervousness means that the choice of firm for people wanting to sue a bank is severely limited compared with their choice for a similar case against other types of organisation. “It is difficult to say how many firms will act against banks,” Clare Canning, head of litigation at Barlow Lyde & Gilbert (BLG), says, “but we are reported as being one of a few ‘major litigation practices in the UK willing to litigate against the banks’. The fear is that public interest is being neglected as insufficient law firms are prepared to take banks on.