It is a common complaint that banks are effectively immune from litigation because no law firm wants to sue them. But with markets tumbling, investment portfolios collapsing and deals going sour since the "credit crunch", it seems inevitable that some of the losers will turn on the banks that brokered, structured and advised on the transactions that cost them money.

Opinion is divided over how much litigation will actually emerge as a result of the summer's financial crisis. Litigators say there has been an increase in enquiries from disgruntled investors who claim they were sold low-risk assets that ended up being worthless re-packaged American mortgages.

Similarly, banking and corporate partners at large firms are starting to refer concerned clients on to their litigation teams for advice on where they stand now that the market has changed.

In August, Standard & Poors said that legal action brought by disgruntled investors was now one of the leading threats to investment banks. The size of that threat, the research and ratings agency said, not very helpfully, was "unquantifiable".

A quick look at bank results and hedge fund closures in recent weeks suggests the situation has deteriorated since.

It is true that the majority of litigators at large London-based law firms flinch at the mention of suing the banks that provide their corporate and banking colleagues with such a steady and lucrative stream of income. But that doesn't mean the banks are entirely litigation-proof. Indeed, there are a number of experienced City lawyers willing to take on the banks in court.

So who can you turn to? This is by no means a comprehensive list, but you might try a few of the following:

Barlow, Lyde & Gilbert
Long-established as one of London’s top litigation outfits, BLG is currently acting for British Energy in a Court of Appeal dispute against Credit Suisse. Existing relationships and a City corporate practice mean the firm is more restricted than some of its smaller rivals, but anyone thinking of suing a bank would be foolish not to consider them.

Cohen, Milstein, Hausfeld & Toll
A recent entrant to the London market, US firm Cohen, Milstein has so far focused on competition-related litigation but is happy to draw on its US experience and its position as a claimant-only law firm to expand into acting against banks. According to London partner Anthony Maton: “The firm has no banking department, sits on no bank panels and has no desire to do so. This means we can litigate against any bank on any claim without fear of either legal or commercial conflict." In the US, the firm has successfully taken on some of the biggest names in finance in cases related to the Holocaust.

Edwin Coe
Led by David Greene, best-known for suing the Government on behalf of Railtrack shareholders, Edwin Coe’s litigators have been hired by a group of Northern Rock investors to examine their options following the bank’s recent share price collapse.

Finers Stephens Innocent
Philip Rubens, head of Finers’ dispute resolution team, said the firm is willing to consider taking action against the “vast majority of banks”. Although he insists it is early days, Rubens believes investment funds with exposure to the kind of structured credit products that have suffered in recent weeks are scrutinising their portfolios — and that some of them will bring mis-selling claims against the banks that packaged them.

Fox Williams
The firm that backed a Belgian investment fund to sue Goldman Sachs for €100 million in the summer is gearing up for further claims against big banks. That case was unsuccessful but Tom Custance, their head of dispute resolution, believes other investment funds and second tier banks are scouring the market for people they can turn to when larger firms shy away.

Manches
Led by Clive Zeitman, a former Herbert Smith lawyer who ominously lists his only hobby as litigation, Manches is happy to take on banks and other financial institutions. The firm may lack the litigation pedigree of its rivals but Zeitman has been in the business for over 20 years and ran his own specialist litigation practice prior to joining Manches’ commercial litigation and arbitration group in 2004.

Masseys
Founded in 2004 by three former Baker & McKenzie litigators, this firm has quickly established itself as one of the go-to outfits in the field. Partners Sean Upson, Gerald Cooke and Jane Colston specialise in large and complex litigation and recently boosted their team with the hire of Philip Young, another former Baker’s colleague. Upson recently acted for an investment fund in a dispute against Bear Stearns that arose after the fund tried to cancel a distressed debt deal that had been agreed but not signed. The High Court sided with Bear Stearns but Masseys are appealling aspects of the case in the New Year.

Mishcon de Reya
Already established as one of the best firms to have on side when tackling an investment bank in an employment dispute, Mishcon’s litigation team can also help with general financial disputes. Earlier this year it won a landmark £700,000 claim against Scottish Equitable on behalf of a pensioner who was given unauthorised advice. The firm is also preparing a case against banks and individual executives involved in last year’s €26 billion Arcelor-Mittal merger on behalf of hedge funds that believe they were short-changed on the deal.

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