A prominent American class action law firm that plans to sue British companies on behalf of cheated consumers has poached an insider from the Office of Fair Trading (OFT) to spearhead its new London office.

Cohen, Milstein, Hausfeld & Toll, the first major American class action law firm to establish a permanent presence in London, has hired Vincent Smith, senior director of competition at the UK regulator.

Mr Smith, who joined the OFT from communications regulator Oftel in 2002, will work alongside Rob Murray, until recently a member of the Competition Commission panel and former head of the competition group at lawyers DLA, who has also joined the US firm.

News of the pair’s arrival at Cohen, Milstein comes less than two weeks after the OFT officially encouraged consumers to club together and sue businesses that have formed cartels or otherwise infringed competition law.

UK consumers were given the legal means to bring so-called private enforcement claims last year following an amendment to the Competition Act, but such lawsuits remain rare.

Which, the consumer group, is running a group action against JJB Sports on behalf of football fans who overpaid for replica kits as a result of price-fixing amongst the retailer and kit manufacturers.

Mr Smith believes that changes in UK and European competition law – including the OFT’s recent consultation paper - mean that such cases will become more popular and Cohen, Milstein’s expertise in this area makes it well placed to win business.

The firm will also represent businesses, or groups of businesses, that have lost out due to rivals or suppliers operating cartels. This morning the OFT said it had launched a criminal investigation into an alleged global conspiracy to fix the market in the marine hoses that are used to transfer oil to tankers.

If the allegations are found to be accurate, individuals and businesses that have lost out as a result of the cartel will be able to bring civil claims for damages.

As in the US, the Cohen, Milstein will only represent claimants and so will not defend businesses accused of competition breaches.

Cohen, Milstein’s London launch has been greeted with scepticism from some lawyers who believe the market they wish to serve does not exist.

A competition partner at one top ten London firm, said: “Cohen, Milstein are undoubtedly the best at what they do and I would love for them to be successful because their targets might come to me to defend them - but I just can’t see an appetite for these kind of claims at the moment.”

However, Trevor Soames, head of the European practice at Howrey, a competition law firm that represents claimants and defendants, said Cohen, Milstein’s move is well timed.

“The UK market for private enforcement might not become as large as the US but it is definitely going to grow. Undoubtedly there are clients to be won and a market to serve in the UK,” he said.

Cohen, Milstein will also offer to represent UK pension funds and other institutional investors in securities class action lawsuits, although these are likely to be filed in the US.

The firm is already representing a group of bondholders, including some European pension funds, in a securities lawsuit against banks and auditors that are alleged to have helped Parmalat, the bankrupt Italian dairy group, hide its debts.

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