Stephen Alexander, the ebullient partner who founded Class Law in 1998 with Howard Epstein, says that the firm's group action expertise came about through circumstance.

What started the firm off was when a client asked the firm to block the merger between the Royal Life and Sun Alliance pension funds. The Royal & Sun Alliance action, in which Slaughter and May represented the other side, was successful, forcing the renegotiation of the terms of the deal.

It became the first in an array of high-profile cases to pitch the firm against some of the UK's best-known litigation practices. Class Law now represents clients dealing with the aftermath of some of the City's biggest controversies in recent years including Equitable Life, Railtrack, Independent Insurance, Claims Direct and British Biotech.

What sets the firm apart, according to Alexander, is the fact that he and Epstein have commercial backgrounds which provide them with a level of expertise that exists in few small litigation firms. "Because we have been involved for many years in areas such as banking, we actually understand the issues," Alexander says. "The big firms also have conflicts of interest, both legal and commercial, which prevent them from taking on these types of cases."

Class Law's successes have led to it being portrayed as an anti-establishment practice, always standing up for the rights of the little guy, the small shareholder. "Small shareholders are very badly treated – who is their representative on the boards?" Alexander asks. "Short of selling their shares, what can they do? Nothing."

But he is keen to emphasise that the firm is now as likely to represent a multinational that wants to join a class action as individual claimants. "We do not want to be perceived as anti-establishment – we are pro-establishment," he claims. "We want to act for the good guys, whether they are multinationals or the little guy."

He is however extremely critical of the UK's regulatory system. "I don't think the regulators do a job well enough," he says. "The real effect of the collapse of Independent Insurance for example is that lots of people have lost their jobs as a result. I know of people that have committed suicide as their businesses gave gone bust because they have had claims and not been covered."

Alexander says institutions are beginning to overcome their reticence at getting involved in class actions as they realise their duties to their shareholders. "Over the last year there has been a change in attitude," he adds. "We are now getting the institutions coming in as claimants as they recognise that it is not their money but their shareholders' money, and that they have a duty to recover it if they have been cheated."

Alexander is however still frustrated at the reluctance of some corporate clients to bring claims. "They have been ripped off by another corporate and they should be able to get damages. And yet they worry about suing the supplier who ripped them off."

Alexander is equally keen to put to rest what he sees as another misunderstanding about the firm, that it is at the forefront of an explosion in US-style litigation over in the UK. He admits to having closely observed the working of the system in the US during his 20 years of doing business there, but he claims that there is no chance of UK companies being swamped by class actions.

"There is no comparison if you look at the number of filings connected to small shareholder actions in the US," he says. "We have probably got about 10 to 12 group actions here, which makes us the biggest practice (in the UK), but then, that is like being the admiral of the Swiss Navy."

While seeking to import some of the best aspects of the US system, Alexander is adamant that the worst will not cross the Atlantic. In a group action in the UK, defendants will be treated as a group in terms of liability, but as individuals when it comes to quantifying damages. "This is not like in the US where they win a billion dollars and then it is split up by percentages," he points out.

The preservation of the adverse costs rule – where you pay the other side's costs if you lose – will also prevent the bringing of unmeritorious cases that the US has a reputation for.

Another reason for confidence in the English system is that it is very much the client's case rather than, as often happens in the US, the lawyer's.

"(In the UK) it is driven by the client even if they ask you to organise it," he says. "It is not so easy for clients to get rid of their lawyer in the US – control here is with the clients, which has to be a good thing."

Alexander argues that the increasing use of group litigation orders – introduced by the Woolf reforms – should actually be welcomed by defendants. "The orders will prevent the great British habit of fence-sitting," he says. "It is good for defendant companies," he adds. "They can see that the group will be closed and they can work out more easily what their final liability will be."

US-style litigation therefore may not be about to hit the UK, but Alexander has a warning for the 'bad guys' who have exploited the differences between the two systems. For example, defendants in antitrust actions have often refused to settle cases globally – despite usually operating the cartel on a worldwide basis – because it was much more difficult for claimants to bring a case for damages in the UK and Europe than in the US. So while companies have made big payouts in the US, they have resisted doing the same over here.

Class Law has recently sealed an association with Washington-headquartered class action firm Cohen Milstein Hausfield & Toll with a view to forcing them to settle here as well.

The two firms are working on a number of cases together including the already announced action against the Sotheby's and Christie's auction houses over their alleged price-fixing cartel in the 1990s.

Alexander says that so far the reaction of City firms – with one notable, unnamed exception – to Class Law's growing presence has been fine. This he says is partly because the firm's approach tends to be a corporate finance one rather than a litigious one.

Indeed, on the firm's website the biography of Alexander's co-founder Epstein proudly relates how in the course of his career only two of his cases have ever gone to court with the rest settled by negotiation.

Although he does point out that he won both times, this is not the average claim a litigator would make. But then, it would seem, Class Law is not your average firm.