Posted Nov 05, 2007 11:18 pm CST
As the subprime mortgage meltdown and a resulting global credit crunch have created a surge of litigation against lenders, some of the world’s major law firms are caught in a quandary.
Traditionally, they have represented banks. But now that litigating against banks is a hot practice area, many are relaxing, just a bit, their customary hands-off approach to bringing suit against lenders, reports Legal Week.
Although they are keeping a low profile on the bank litigation issue, two law firms that now appear to be more open to the idea of suing banks than they used to be are Boston-based Bingham McCutchen and Allen & Overy, one of London’s Magic Circle law firms.
“The whole culture of lending has changed so there are different types of institutional lenders,” one unnamed Bingham partner told Legal Week. “I do not think you will be able to have a financial institution litigation practice if you are unwilling to sue financial institutions.”
Says Tim House, who heads A&O’s banking and finance litigation group: “We would never litigate against major banks, with one exception. If a dispute is purely technical, for example where a point of contractual interpretation was in dispute between two banking clients and the market wanted certainty, we would act in the dispute if both clients consented to us doing so.”