White & Case has been fined £250,000 in the largest-ever sanction imposed by the Solicitors Disciplinary Tribunal (SDT) against a firm, as it said today (19 July) that the firm had breached conduct rules by acting recklessly in failing to identify a conflict of interest and failure to protect confidential information regarding a $2bn Ukrainian commercial dispute.
The Solicitors Regulation Authority (SRA) referred the case to the SDT after the High Court found in 2014 that the firm had failed to identify a conflict of interest and barred it from acting on the case.
On 31 January 2014, Mr Justice Field ordered that the firm cease representing a Ukrainian oligarch, Victor Pinchuk, suing Ukrainian tycoons Igor Kolomoisky and Gennadiy Bogolyubov.
At the time, a White & Case spokeperson said it was disappointed by the judgment but that the judge did not find that any actual breach of client confidentiality had occurred, according to media reports.
After considering all the evidence, the SRA and SDT ordered that White & Case pay £250,000, and partner David Goldberg £50,000, in an agreed settlement of the disciplinary body’s case.
The SDT, however, did not allege that the firm or Goldberg had acted dishonestly, nor did it pursue allegations of lack of integrity against either him or the firm.
The SDT found that the firm allowed work to be carried out without adequate steps taken to ensure that no conflict of interest existed, and without ensuring the confidentiality of information provided by clients was protected. In addition, the firm admitted to acting ‘recklessly’ in respect of the two matters.
The SDT said the firm had allowed instructions to be accepted to undertake further work for clients without causing adequate steps to be taken to ensure the confidentiality of information provided to the firm by clients was protected, and in so doing breached the SRA code of conduct and principles.
As the lead partner for the matter involved, Goldberg provided confidential information concerning the work undertaken to another partner in the firm involved in acting on a conflicting matter.
A firm spokesperson told Legal Business: ‘While it would not be appropriate to comment until the Solicitors Disciplinary Tribunal has published its judgment, we have been cooperating fully with the SRA and accept the orders which will be made by the SDT. We are committed to upholding the legal industry’s highest standards at all times, in all of the jurisdictions where we operate.’
The SRA’s previous highest sanction of a law firm was against Clyde & Co. in March, when the SDT fined the firm and three of its partners £80,000. Partners Christopher Duffy, Simon Gamblin and Nick Purnell were fined £10,000 each for breaching accounting and anti-money laundering rules after admitting allowing a client bank account to be used as a banking facility.
While the SDT judgment made on 18 July has yet to be published, the SRA has announced the decision today.
