Lawyers are preparing for an onslaught of fraud cases this year as a result of the financial crisis.

James Bagge, a consultant at Norton Rose, the City law firm, said that the first signs of an upturn had already emerged in recent weeks as suspicious investors began seeking legal advice. He predicted the amount of fraud work would increase dramatically in the next six months.

Although a major financial scandal had not appeared so far in the UK, Mr Bagge said: "It really wouldn't surprise me. In fact, I'd be amazed if we didn't get one."

Fraud cases typically increase during a recession as management, investors, regulators and creditors begin scrutinising companies’ financial positions more closely.

Often, wrongdoing is exposed as a result of an insolvency or as a result of lawsuits brought by disgruntled investors. “People go looking to see what’s left in the cupboard and at that point discover that it’s completely bare,” Mr Bagge said.

The number of fraud cases also increase during a recession as individuals sitting on losses becoming increasingly desperate and resort to fraud in an attempt to hide them.

Explore Law

• Columnists

• Law Panel

• Law Reports

• Student Law

Times Recommends

• Linklaters trounces rivals as UK's biggest firm
• Clifford Chance profits plunge 37 per cent
• Casual drinkers hit by spread of 'dry' zones