"But we're in this together aren't weeeeeeee?" Dechert and Gerrard part ways.
Dechert has agreed to make an interim payment of £20m on account of costs, to former client Eurasian Natural Resources Corporation (ENRC).
In May, the court ruled that Dechert and its former head of white-collar crime, Neil Gerrard, committed deliberate acts of wrongdoing.
That verdict was the culmination of over a decade of twists and turns since Dechert was instructed by mining conglomerate Eurasian Natural Resources Corporation to review a whistleblower's allegations in 2010 that the company's operations in Kazakhstan were riven with corruption. The source alleged that ENRC's local directors had taken monthly kickbacks of up to $300,000, and were buying shoddy machinery for ENRC from their relatives at vastly inflated prices.
Dechert was sacked in 2013 when ENRC accused Gerrard, a former Met Police officer, of wrongly expanding the scope of his investigation in order to generate more fees. The High Court agreed, finding that the firm's rainmaking partner leaked information to the newspapers and liaised with the Serious Fraud Office, without his client's knowledge, in order to give it ammunition that would in turn create more work for the firm.
As a result of his innovative approach to client care, Dechert's bill swelled to £13 million when, argued ENRC, it should have been no more than £2 million.
Gerrard was "so obsessed with making money from his work that he lost any real sense of objectivity, proportion or indeed loyalty to his client", said Mr Justice Waksman.
At a hearing this week, the court was told that Dechert has since "jettisoned" Gerrard. And the firm has now agreed to make an interim payment of £20m on account of costs by 1 September (with Dechert’s insurers standing behind the firm).
Dechert and Gerrard are “jointly and severally” liable for ENRC’s costs. But since they have parted ways, the parties are no longer being represented together. Gerard has instructed Charles Fussell & Co, while Dechert is advised by Clyde & Co.
ENRC is seeking indemnity costs from Dechert and Gerrard on the basis of the parties' "aggressive resistance, unreasonable and uncooperative conduct and, most seriously, dishonesty".
ENRC's barrister, Nathan Pillow QC, told the court that Dechert and Gerrard's defence was "based on lies from start to finish", according to a report in the Gazette.
"Gerrard and therefore Dechert, vicariously...knew that ENRC’s case was essentially true and that he had committed some of the most serious professional misconduct an officer of this court could commit," said Pillow.
ENRC's barrister added that although Dechert has "belatedly parted company with Mr Gerrard...it does not disguise the fact that until June...they were standing shoulder to shoulder."
However, Dechert's position is that the original judgment in the claim made no finding of dishonest conduct on the part of the firm itself.
Both Dechert and Gerrard argued that indemnity costs are not appropriate.
Andrew Onslow QC for Dechert said that ENRC’s total costs for its claim against Dechert and Gerrard could be "in the region of £50m", compared to the approximate £26m quantum of the claim, and Dechert and Gerrard’s previously-forecast costs of £37.5m.
"It is immediately obvious that ENRC's likely level of costs vastly exceeds any potential recovery in damages. Yet an award of indemnity costs will deny Dechert any scrutiny of the proportionality of the totality of costs claimed," said Onslow.
A spokesman for Dechert told RollOnFriday: “We recognise the seriousness of the judge’s findings in relation to our former Partner, Neil Gerrard’s conduct. Trust among partners is integral to any partnership, and up to and including the trial, Dechert acted in good faith in reliance on the assurances given to us by Mr Gerrard.”
The hearing continues.
£20 milly! And more to come! I could have sworn Neil promised to bring that amount in, not send it out.
Does anyone else look at him and get reminded of Bruce The Shark from Finding Nemo?
It's probably just me, but there's something about the fake smile and dead, dead eyes...
Oh Neil, Neil, orange peel, when will I see you again?
This is absolutely outrageous. Neil did nothing wrong. Everything in line with market practice. The firm and his fellow partners were supportive of him, as they should have be, and a credit to them - what was he found guilty of? Working diligently for his clients, helping the regulators, and helping his clients further with some under the table market standard reports.
Neil trained up basically every big balls white collar and investigations partner in the City. They all came out DLA, and later Dechert. He was a market maker. His juniors are all now partners and they all do these things in the best interests of his clients and the regulator, and whilst they interests cannot always be easily reconciled, there are ways of reconciling them, and whilst some people may not find those ways palatable, they are delicate flowers unalive to how the real world works and needs to work.
Let him who is without sin...
Dechert - you did absolutely nothing wrong whatsoever. You haven't apologised, you shouldn't apologise and you will not apologise! Do not cave.
Oh so no payrise then?
I assume Anon @11.56 is trolling!
Agreed with 11.56 Anon. Some people are so special nowadays. Neil was a forthright, straight up kind of guy. Not a lot like him anymore. So many stay in the shadows. Absolutely also - making reports to regulators is the right thing to do. It helps the regulator. It helps the client build more robust procedures. I'd go further to say that it's built into the regulatory and legislative practice. The SFO just doesn't have the funding. It can't win anything even with help, but a helping hand is the only thing which can give them a signal where to look, and some ammunition to direct their firearms. Which are really just water pistols. I disagree with 11.56 only to say that I think Dechert should have put up a lot of a stronger front and urged an appeal of the matter. Neil has done the industry a real service, and it sad state to see how he has been repaid.
I think people have got to read the case before coming to a judgment themselves. And even where it isn’t charitable about him, judges do get it wrong. Just in another story, a judge got it wrong and was very nasty about a certain associate, who acted perfectly appropriately.
Judges are very far removed from the cut and thrust of real legal practice. Wearing a wig and reading a textbook doesn’t qualify you on the business practices in every area.
If Neil hadn’t reported, his client wouldn’t have improved their procedures. Inept internal legal counsel and aggressive principals who believe they can do anything are the problem. Not an outstanding private practice legal practitioner who sought to assist both his client and the regulator navigate through challenging circumstances. The regulator got some work out of it, the client bucked their ideas up - and yes, they paid him a few million for the pleasure, but that’s nothing in terms of what they make.
Dechert should stick to its guns. It was known for white collar work off the back of big guns like Neil. Neil built the foundations which Dechert in London sits today. Dechert is Neil and Neil is Dechert - be proud and don’t disassociate yourselves.
Gerrard sounds like my sort of chap! I will arrange a peerage for him!
Judge was off his rocker.
Failing to record your own advice is negligent. Come off it.
Failing to advise about certain risks. No - he gave all the advice, good advice, possible the best advice over calls and things.
Basically it's all hearsay. Case essentially said - he didn't record all the advice he gave in memos all the time, but the judge admits he gave lots of advice over the phone etc. So Gerrard lost because the judge said he knew the advice was probably given, but because he can't prove it, the existing advice is possibly wrong and Gerrard was negligent for not having his trainee take notes of every cough or sneeze at a meeting.
No, no, no. And a little tip off here and there, and the judge went bananas.
The judge was simply not qualified to hear this matter. He's a construction / real estate guy. He does TCC disputes. He went to the University of Manchester for Christ's sake. This isn't a guy who knows anything about this kind of thing. What's going on. Why do we have these rando uber specialist punters trying to do something they know nothing about.
That's how you get injustice. That's what this is.
I am in total agreement with the others in the comments above. I really do hope this gets appealed. It's a terrible, terrible injustice.
It's actually bizarre the way so many solicitors who practise white collar crime and fraud cases...end up doing dodgy stuff. It's almost like they think, ah now I've seen the mistakes people make, I won't make them. They forget of course that they do not have an conclusive knowledge of all possible mistakes - and therefore go one to make some new and innovative ones of their own.
I give you, for instance Christopher Grierson (who acted on the Maddoff fraud) who ended up doing bird for nicking over £1m from Hogan Lovells and spending it on ladies of variable repute and Colombian marching powder.
Really appreciate all the clarifications Neil & his new sol team have provided from 1156 onwards!
tbf I'm a 6 pqe in white collar and don't really disagree with the comments here. Our clients wouldn't too, this is the way that the practice area has, and must, operate. Hollistically.
Seems that Bridge_05 has never previously heard of Waksman J or bothered to look up anything about his practice when he was a junior and/or Silk.
@5th @16.48 - why do you want to arrange to peer at him for ages?
I think that 18:32 is probably right, Gerrard has been unfairly stitched up here. Time will no doubt clear his name and future generations will come to recognise that he was a man treated most unkindly in his day, but ultimately cleared of all wrongdoing.
It is a not uncommon experience in the legal profession. It has happened to various high-profile others.
But I am of course not naming any names.
Even though you may know who I have in mind.
Though I am not going to name them.
But you know who I mean...
Nudge nudge, wink wink.
I'd supposed he brought much more in, why are they getting rid of their own son? :D
@8th @2.19 - yes, just like you, you mean. In your case people already realise you were treated unkindly.