Nomura Holdings Inc.'s (NMR) U.K. unit and London-based recruitment firm Hogarth Davies Lloyd Ltd. have issued lawsuits against each other over a contract dispute following the Japanese bank's employing of staff after the bankruptcy of Lehman Brothers last year.

Rival headhunters to Hogarth Davies Lloyd, which was unavailable to comment after several calls and an email, said the legal action was unprecedented in its potential scale.

Stephen Sidebottom, head of human resources in Europe for Nomura, told the Times newspaper: "There is a dispute about the extent of HDL's (Hogarth's) role in the Lehman Brothers acquisition and the fee that is properly due. The claim is misconceived and HDL is seeking a commercially absurd sum."

A Nomura spokeswoman confirmed Sidebottom's statement but declined to comment further.

The Times said Wednesday that Hogarth was suing for up to GBP90 million and that a counter-claim by Nomura had also been lodged at the High Court in London, although a banking source close to the dispute said it was only a guess as to how much the figure in dispute was.

Nomura confirmed it previously had a contract with Hogarth Davies Lloyd to recruit investment banking and fixed-income staff.

The Times said the dispute was about Nomura hiring 250 former Lehman fixed-income bankers after its bankruptcy Sept. 15.

The banking-sector person familiar with the matter said the dispute was about the level of fees appropriate for the service provided by Hogarth Davies Lloyd.

Nomura regards the ex-Lehman bankers it now employs as being the result of an acquisition, covered by the U.K.'s Transfer of Undertakings Regulations, known as TUPE, rather than covered by the Hogarth Davies Lloyd contract for individual hires that the firm is claiming payment for, the person added.

Hogarth is regarded by peers who declined to be identified as a boutique and specialist in this area.

James Hogarth, one of the three founding and equal-share-owning partners of HDL, was unavailable for comment but, according to the company Web site, has "global responsibility for all FICC (fixed-income, currency and commodity) assignments."

The head of financial services practice at a rival recruitment firm said legal action was extremely rare between headhunters and clients.

He added: "I am surprised. Disputes do not normally go to a lawsuit as (recruitment firms) and clients do not want them, although the sums of money involved are not insignificant. In my 25 years' experience, I have not heard of a case of similar stature."

Hogarth Davies Lloyd's latest filing at Companies House of its accounts for the year ended April 30, 2008, showed a profit of GBP92,576. The creditors it owed GBP2.8 million by end-April 2009 were more than its then-assets of GBP2.6 million.

Company Web site: www.hogarthdavieslloyd.com

-By James Mawson, Dow Jones Newswires; +44 20 7842 9268; jmawson@penews.com