Law: Making waves in the City: Despite decline in the industry, shipping lawyers are busy, says Diarmid Nicolson

A long-term decline in British shipping has adversely affected associated industries and services, but there is still a place for the City shipping lawyers, and even for new specialist firms.

Holmes Hardingham is a 10-partner firm formed in 1989 by a breakaway shipping department from a larger City practice. Ken Scott is one of the partners. 'A lot of people were good to us at that time,' he says. 'It's true that solicitors usually take their clients with them, but the process of breaking away and forming a new partnership is generally long and uncertain.'

The introduction of interim billing and time recording made it easier for smaller firms to develop, Mr Scott says. 'Before that, the best chance was representing salvors, where completion of an average case might take a year. Having to wait three years for payment would put the smaller firm out of business.'

The 25 fee-earners at Holmes Hardingham are all marine lawyers but with diverse specialist areas, broadly divided into 'wet' and 'dry'. These range from accidents at sea to ongoing cargo and time- chartering disputes. 'I work mostly in collision and salvage,' says Mr Scott, a former ship's officer. 'Instructions may come from an insurer, a salvor, or direct from a shipowner.'

The client is usually foreign, because while shipping in the UK has almost disappeared, Mr Scott points out that it has flourished in other countries with sympathetic government initiatives, noticeably absent in this country, like the Canadian zero-tax regime.

Nevertheless, most of the firm's business comes from 'a few hundred yards away', says Mr Scott, because of the City of London's strong marine insurance market. There is a story, Mr Scott says, about a firm that moved half a mile away from the City but returned because it was losing business.

Incidents and initial inquiries may occur abroad, but many clients opt for hearings in London. The UK is one of the few countries with an Admiralty court and a strong maritime arbitration system. 'This works very well for the client too,' Mr Scott says, 'but it is geared to solicitors and other experts being instantly available.'

Being on hand at short notice is all-important for shipping lawyers, as local hearings normally start within 12 hours of an incident. 'Before leaving work in the evening, we agree whose home number to leave on the office answering machine,' says Mr Scott.

In the interests of immediate availability, Mr Scott keeps a mosquito net in his luggage. Being ready to go also means being within easy reach of an airport. 'To give you a recent example, I was wakened by a phone call from an insurer at 5.30 on a Monday morning,' he says. 'A few hours earlier a tanker loaded with crude oil had collided with a cargo vessel in the Bosporus. Both vessels had caught fire and there was a heavy loss of life. I was asked to be on the 8.15am Heathrow flight to Istanbul to protect the interests of the tanker.'

In the week following his arrival in Istanbul, he appeared before the local public prosecutor on behalf of the crew when they gave evidence, visited both vessels, located further witnesses and liaised with the company salving the tanker.

London is not the only place with airports, so there has to be a more compelling attraction to the City. 'What it really comes down to is confidence,' Mr Scott says. 'Clients know they will be best served here in London, and in the long run it will probably cost less where there is a specialist court, good arbitration and a pool of expert solicitors, barristers and consultants who are concentrated in one area and are used to working together.'

He says that he has been called to attend a casualty at a UK port some distance from London, although there were local firms on the doorstep. Robert Tym, a senior claims executive from the Newcastle P & I Association, which insures vessels for third-party claims is not surprised by this. 'We do well in Newcastle, but we'd still expect to find the service Ken Scott offers here in the City.'

Mr Tym's firm had provided cover for the other ship involved in Istanbul. 'It makes a difference having someone you can work with on the other side,' he says. 'You know there won't be any funny moves. Antagonism only rockets the costs.' There are worries in London, however, as arbitrators tend to be drawn from shipowners and charterers, and with British shipping in decline, are in short supply. Further concern stems from the Government's apparent reluctance to appoint sufficient commercial-court judges.

'Of course we need to be competitive pricewise, but if that was the only factor, suburbia would be full of shipping firms,' Mr Scott says. 'The client needs a sound service tailored to his own requirements. If an injunction or ship arrest is required, it has to be obtained within a few hours.

'Competition in the long term could come from the west coast of Canada and some of the Continental countries, but it's not an easy business to break into,' Mr Scott says. 'It takes a lot of time to build up confidence, and London has an enduring reputation.

'I can't envisage any radical changes provided we keep on top of things, which means quality control and staying in touch with both my assistants and my clients. We will continue to be the main insurance market, and the court system we rely on will remain in place.'