| Nowadays, any UK law firm active in financial transactions will have its complement of US lawyers, and vice versa. The rationale is that English and New York law the two most prevalent governing laws in international financing transactions are virtually fungible these days. What determines the governing law of a transaction will be the preference of the parties involved, the lender or underwriters' country of origin or location, or the whereabouts of the borrower's assets. However, a line of cases involving attempts by US Names (investors in the Lloyd's of London insurance market) to avoid their liabilities has demonstrated that the two legal systems are not identical. The cases are relevant to the capital markets in general because they concern the ability of non-US issuers of securities to circumvent the application of US securities laws by choosing a governing law other than that of New York. The cases came to the fore over the last three years when Lloyd's was putting in place its reconstruction and renewal plan (completed in September this year). During the booming 1980s, Lloyd's had attracted an influx of new Names at a time which, in retrospect, was inauspicious: US courts were making awards against US companies for long-tail liability pollution and asbestosis cases going back decades. |