Widespread expectations of a litigation frenzy following the financial markets meltdown are ‘wishful thinking and unrealistic’, according to the head of litigation practice Bivonas.

Tony Brown, chief executive of the London firm, said that while increases in fraud, corporate restructuring and insolvency work could be expected, excessive litigation is unlikely in a recession because of lack of money to pay the bills.

Brown said: ‘The magic circle firms and even Lord Goldsmith and Lord Falconer are expecting an avalanche of litigation. Yet as we approach recession, who exactly do they expect to pick up the bill for all this? The taxpayer, the government and insurance companies? This fighting talk from the legal profession is unfounded.’

Brown also suggested that regulators, such as the Financial Services Authority, should outsource some of their enforcement work to private practices because they are not making full use of their powers.

‘A privatised external agency with an incentive to secure results may be the way to bring the transgressors to heel and shake off the civil service culture of regulation,’ he said.

‘This already happens in Australia and is extremely effective. The Revenue (HMRC) has recently outsourced major civil tax recovery work to City law firms.’