An interesting piece in the FT saying that "big banks and their clients are gearing up for possible post-credit crunch lawsuits that may start hitting the courts within six months, leading lawyers said yesterday.
Lawyers report high demand for advice about contract flexibility and banks' vulnerability to legal action alleging mis-selling and mis-valuation of investment products.
The comments suggest all sides are trying to work out details of losses and potential culpability before launching lawsuits that will be costly and could shred reputations."
It is not all great news for litigation departments as the article observes: "While post-credit crunch cases have started to emerge in the US, it seems investors in Britain are still wary of the huge lawyers' fees and the bad publicity that inevitably accompany a commercial lawsuit in London."
On this basis, lawyers should be educating their clients on the advantages of mediation in that it can lead to claims settling sooner(thus saving legal fees and time) as you can circumvent the disclosure process and as mediation is without prejudice, confidentiality can be retained.