Mourant Ozannes managing partner Robert Shepherd sums up the key topics from this year's Funds Litigation Forum in London

Kenneth Krys (pictured below) is well-known as the liquidator of the Fairfield group of funds. In an amusing and illuminating speech at Legal Week's Mourant Ozannes Funds Litigation Forum last month, he compared his personal experiences as an ultra marathon runner to the type of endurance required of a liquidator of offshore funds. Like a long-distance runner, the company liquidator has to go the extra miles to get his hands on the relevant documentation and information, often across international borders.

The first of three panel sessions at the event was led by Peter Hayden, head of litigation and insolvency at Mourant's Cayman office. This panel focused on the litigation that has been taking place in the British Virgin Islands (BVI) and Cayman Islands in the last three years.

The clear conclusion was that there had been a significant increase in the quality of the administration of justice in both Cayman and BVI over the last 10 years. Most importantly, this meant that the users of the system, such as Michael Crystal QC and Jim McCarroll of Reed Smith (representing US parties), both expressed confidence that the right outcomes were being achieved within reasonable timescales and costs.

The second panel focused on regulation and corporate governance and was led by Christopher Edwards of Mourant's Guernsey office. Flanked by Sidney Myers of Berwin Leighton Paisner, John Fordham of Stephenson Harwood and David Heroy of Baker McKenzie's Chicago arm, this was a lively panel that examined the aggressive, sometimes police-led approach of the Financial Services Authority (FSA) in the UK (as elaborated by Myers) against the more shareholder-led approach pursued in the US to bring financial services institutions to book.

Fordham talked about the recent case of Mr Pottage, the managing director of Credit Suisse London in respect of which judgment was still pending. In the case, the FSA sought to prosecute Pottage for an alleged failure to instigate a fundamental review centred around its due diligence and client take-on procedures. Pottage had, in fact, started such a review but, according to the FSA, not quickly enough.

The third and final session was chaired by Rob Duggan of Mourant's Cayman practice. This panel looked more closely at the way in which the events of the last three years have impacted upon the practice of fund creation and promotion. Flanked by Ben Robins of Mourant's Jersey office, Paul Dickson of Slaughter and May, Jeff Bronheim of Cheyne Capital and David Heathfield of Baronsmead Partners, this panel gave a clear insight into the overwhelming burden of regulatory and other responsibilities under which a fund promoter has to operate.

Dickson and Robins talked at length about the nervousness among their clients in the face of such regulatory burdens which are quite different (and, occasionally, even contradictory) depending upon which jurisdiction is being used. They also talked about the increased rigour required in the documentation used by the funds world and the additional time and costs that this now entails.

In an odd exchange, funds lawyers were seen to thank contentious lawyers for their contribution in having, over the last three years, identified holes in their suite of documentation!

Robert Shepherd is managing partner at the Guernsey office of Mourant Ozannes. He chaired the Legal Week Mourant Ozannes Funds Litigation Forum held in London on 27 March.

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