Lawyers warn that when the music stops, retribution will costlier and messier than any other mini-crash

A meltdown in the credit markets could lead to banks, hedge funds and private equity firms finding themselves embroiled in years of costly litigation, lawyers warned today.

They revealed clients are "lining up" for advice on their legal exposure to the crisis.
The sheer complexity of financial instruments could make it almost impossible to determine liability and the extent of losses if the worst is to happen, experts said, and predicted it could take years for the courts to sort out.

In the past few weeks, law firms have received an increasing number of inquiries from clients wanting to know if they can be held to their commitments if the credit markets collapse. At the same time, private equity and corporate clients want to know if the banks can be forced to make good on their lending promises.

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