Editors' Blog

Cab rank rule would suit firms, if not banks

Posted 3/05/2007 by John Malpas

Remember when Citibank got the hump with Freshfields after the firm acted against it in a piece of litigation?

That was back in 1999, with the row culminating in the magic circle’s firm’s ejection from Citibank’s panel (see story). The spat was the first inkling UK law firms had that the particular brand of loyalty major US companies expect of their clients - you don’t stock Pepsi in your office if you act for Coca Cola - was spreading to this country.

Such is the size of the US market – and the profitability of litigation – that there is never likely to be a shortage of firms with the expertise and prowess to take on the all-powerful banks. The same situation does not apply in the UK, where there are fewer firms and fewer still that are capable of handling big-ticket commercial litigation.

And most of the firms with the muscle to take on the banks are simply not prepared to jeopardise their deal flow – although, of course, they are all too happy to defend the banks. This explains why most senior lawyers in the UK recognise that there is a shortage of suitably-qualified law firms that are prepared to act against the major banks.

The Big Question in today's Legal Week (click here), also shows that many lawyers are uncomfortable with the implications of this, with 48% believing it is not in the public interest.

But what can - or should - be done about this state of affairs? The Bar Council has operated a rule for many years that is designed to stop barristers from shying away from taking on cases simply on the grounds that they don’t want to act for the defendants. It is called the 'cab rank rule' and is clearly designed to protect the public interest.

Could not the Law Society, or the City of London Law Society, propose a similar type of rule - one that, for example, prohibits law firms from refusing instructions on the grounds that it would upset the other side? Or perhaps in-house lawyers could be barred from punishing firms simply for acting on the other side - in non-conflict situations, obviously.

Such a rule would certainly prove popular with the law firms - or at least it would, if it could be guaranteed there would be no reprisals. And that is, after all, how things used to operate.

Fanciful? Probably. Still, when the respondents to the Big Question survey were asked if they would support the introduction of a cab rank-type professional rule, one in four said they would be in favour.