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On 7 March 2016 Debenhams Ottaway commercial litigator Luke Harrison introduced David Wolfson QC from One Essex Court at the Commercial Litigation Association (CLAN) Annual Conference in London. David spoke about the trends in financial services litigation.

Below is the speech given by Luke, a CLAN executive.

Before I introduce our next speaker I just want to give you some food for thought on current access to justice issues in banking and financial services litigation.

Banking and financial services litigation, as would be expected, saw a significant upturn as a result of the aggressive growth culture in banks and financial services organisations during the last decade. Unlike previous recessions which led to an upturn in recovery work for non performing debt the sorts of battles we have seen in the courts over the last six years have been much more significant. They have included

  • financial mis-selling claims
  • rigging of LIBOR and other financial benchmarks
  • negligence claims
  • fraud claims.

As someone who qualified long after the last major recession I am intrigued as to whether such serious irregularities in financial services are new phenomenon or whether claimants now have better access to lawyers who can take on the David vs Goliath actions against banks and other financial services institutions.

I was struck recently by an article in the Obiter column of the Gazette on 1 February 2016. It reproduced a piece from February 1966 entitled “The negligent solicitor”. It read

“The Society receives numerous letters which contain a complaint that an action for negligence against a solicitor cannot be pursued because another solicitor cannot be found to take on a case against a fellow member of his profession. ‘Dog won’t eat dog,’ the client says, and then asks the Law Society to find a solicitor for him who will take up the action on his behalf.”

Now I have no problem with eating dog and I am sure that there are a number of other ‘dog eaters’ in this room. It is no longer difficult to find a solicitor willing to take on an action against one of their brethren.

Equally the rise of the boutique litigation firm over the last 10 years has provided access to justice for ‘victims’, and this is in my view an appropriate word, of banks and financial institutions. These firms, as well as conflict free ‘mid-size’ firms now afford affordable access to justice. They offer ‘bank beating’ expertise and at affordable rates often hiring associates from the larger firms who have spent some time ‘on the other side’.

But is access to justice in financial services under threat?!

Those of us who sue banks know that it is a hard fight with cases often won or lost, not at trial, but through interlocutory skirmishes over disclosure and expert evidence amongst other things. In one such case, Property Alliance Group Limited (PAG) v Royal Bank of Scotland PLC, resulted in interlocutory judgments on matters that include specific disclosure and issues of privilege. More recently in November 2015 Mr Justice Birss gave PAG permission to amend its Particulars of Claim to plead various allegations of fraud. In his judgment on PAG’s successful application he said

“In my judgement the material relied on by PAG…provides ample prima facie support for an inference of fraud and dishonesty at the highest level of RBS. The materials show that, arguably, members of the RBS board were aware that LIBOR was “broken” during a period in which RBS was selling swaps to PAG referable to LIBOR.”

Commentary on the judgment includes the view that the judgment would “be sending shock waves through the upper echelons of RBS management”.

Was it a coincidence then that RBS went on the offensive? I, for one, was shocked but, not surprised, to read Tabby Kinder’s article in the Lawyer on 29th January 2016 entitled ‘RBS declares war on Cooke Young & Keidan in Libor case’. What we know about this case from Tabby’s article is that RBS alleged Cook Young & Keidan were conflicted in continuing to act for PAG. The application for an injunction filed on 27 January alleged that Mike Cumming-Bruce, who joined Cook Young & Keidan in December 2015 as an associate, had access to confidential documents concerning RBS whilst working for Clifford Chance. He had left Clifford Chance in March 2014 for off shore firm Carey Olsen.

Cook Young & Kiedan recently bowed out of the litigation in favour of the 2 Birds. Was kicking a 20 lawyer boutique off the case and replacing them with a top 20 firm a victory for the bank? What is concerning, however, about the preface of the application is the suggestion that if you have worked for bank clients at a big firm you are somehow tainted from moving to a firm that sues banks. This would have the effect of restricting the talent available to law firms that take on the banks and by consequence restrict access to justice.

Banks also continue to include ‘no sue clauses’ in their panel agreements with law firms. Some are rumoured to contractually prevent law firms bringing certain types of claims, event against other banks. Is this anti competitive? CLAN is shortly going to be participating in some research being undertaken by the competition and markets authority into access to justice in legal services so I would be interested to hear from any of you today as to your experiences of market distortion in this area.

No doubt our speaker will be able to take questions on the issues that I have raised at the end of his talk. So without further ado may I introduce David Wolfson QC from One Essex Court who is going to talk through ‘Trends and Insight’ in financial services. David is one of the most sought-after commercial Silks at the Bar which must make him an adept giant killer. His experience includes a number of Lehmans cases. Chambers 2016 comment that

“He has a formidable grasp of highly complex issues and is usually the quickest person in the room, very commercial as well”. “He has a level of commitment and client service that is admirable. He is smart, practical and gets what you are trying to achieve. He is very pleasant to work with.”

David, I hope your slingshot is ready, over to you.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.