Slaughter and May has been instructed by the Serious Fraud Office (SFO) to defend it against claims totalling as much as £300m resulting from its failed investigation into businessmen and brothers Robert and Vincent Tchenguiz.

The SFO today (28 February) confirmed the appointment of the magic circle firm, which comes after the collapse of the long-running investigation into the brothers for suspected impropriety in relation to the 2008 failure of Icelandic bank Kaupthing.

Disputes partner Jonathan Cotton is leading the magic circle firm's team.

The Tchenguiz brothers were arrested in March 2011 in a dawn raid that received widespread media coverage; however, the fraud agency later conceded that there were errors in the evidence it used to obtain search warrants against the brothers.

Last October, SFO director David Green announced it had dropped its investigation into Robert, having abandoned its probe into Vincent in June 2012.

In November the High Court ordered the SFO to pay up to £3m in legal costs after ruling that the handling of the investigation was unlawful.

The judges ruled that the SFO's former director Richard Alderman "wholly failed to discharge this duty in circumstances in which the claimants' reputations were bound to be seriously damaged by the issue and the execution of the warrants, given the very public manner in which this was done".

Lawyers acting for Vincent include Wilmer Cutler Pickering Hale and Dorr partner Stephen Pollard, Ben Emmerson QC of Matrix Chambers and Lord Goldsmith QC, the former Attorney General who is now head of European litigation at US law firm Debevoise & Plimpton.

White collar crime specialist BCL Burton Copeland has been advising Robert, with partners Ian Burton and Richard Sallybanks leading the firm's team.

The SFO was also ordered to make indemnity payments to Rawlinson & Hunter, the trustees of the Tchenguiz Family Trust, for which Stephenson Harwood took the lead role.