The post-financial crisis wave of professional negligence suits against law firms appears to have passed, as RPC figures show a 47% drop in High Court cases against law firms last year.
While the number of cases spiked by 192% to 418 for the year 2013-14, the number of law suits against solicitors for the 12 months to June 30 2015 is lower at 221. However last year’s figure is still a 55% increase on the 143 cases brought in 2012-13.
Simmons & Simmons senior partner Colin Passmore told Legal Business it was hard to identify a trend but it was possible GFC-related litigation had subsided, and law firms were taking better preventative actions.
‘It is difficult to pinpoint why there would be such a dramatic fall year on year. But lot of cases came out after the financial crisis, and we expect that to fall at some point, and that is the more general view, and what we are seeing in America.
‘Risk management is something that law firms have been taking very seriously over the last few years – just what the accountants or the big four have been doing – law firms have been doing the same and it may be having an impact.’
RPC partner Joe Bryant said while the drop was largely due to a fall in cases arising out of the financial crisis, some cases relating to the sale of subprime mortgages were subject to standstill agreements, which meant the figures would not be entirely reliable, as the ‘pain’ of last year’s cases was yet to be felt.
He added: ‘A large number of property and conveyancing cases are still sitting there dormant for now, whilst the claimants and their legal teams accumulate the evidence they need to bring their cases in front of a court.’
Clyde & Co partner Richard Harrison added: ‘My view is the situation at the moment is relatively benign – and that’s been reasonably long lived, but the issue with claims against professionals is that there is a long tail.’
Harrison said there was likely to be a spike in claims due following economic uncertainty, the stock market volatility and oil prices collapsing.