Dechert has strongly condemned retired white-collar partner Neil Gerrard after the High Court today (16 May) ruled that he and the firm itself breached their duty of care to mining giant and client ENRC.
The £70m claim brought in 2019 was heard by the High Court in an 11-week trial between May and September 2021. It centered around allegations that Dechert – which represented ENRC between 2011 and 2013 – colluded with the Serious Fraud Office (SFO) during an investigation into the company. Gerrard led on the matter for Dechert, with ENRC specifically alleging he passed on confidential information to the fraud watchdog and the press.
Today’s judgment from Justice Waksman found that the ENRC’s allegations of misfeasance against the SFO had failed on balance. But the agency was only partially spared from another high-profile setback, as Justice Waksman upheld ENRC’s claim that the SFO induced breach of contract by encouraging Gerrard to leak confidential information.
The judgment made for scathing criticism – describing Gerrard’s actions as ‘extraordinary’ and ‘almost unimaginable.’ It detailed how Gerrard had told individuals associated with ENRC that he had been approached to become director of the SFO, with his Dechert online biography claiming as much until February 2016. However no evidence supported this claim, and Justice Waksman concluded: ‘At best, this was a considerable exaggeration of the reputation which he claimed he had at the SFO; at worst it is simply untrue. Either way, it was a misleading statement by a professional to potential clients.’
Justice Waksman additionally determined that Gerrard was ‘the instigator’ of three leaks of confidential ENRC information to the press, and also found that in doing so he had contrived to expand the scope of the SFO’s probe.
The ENRC alleged that this was to increase his own fees – according to the judgment, Dechert billed ENRC £13m for the 2011 to 2013 period, an amount ENRC deemed to be inflated by ‘unnecessary fees’ of £11m.
Justice Waksman also declared that the SFO had acted with ‘bad faith opportunism’ in following up on the relevant pieces of information wrongfully communicated to it by Gerrard.
A spokesperson for Dechert said: ‘We recognise fully the seriousness of the judge’s findings in relation to Mr Gerrard’s conduct. We are considering the judgment to see what we should learn from it. Trust among partners is integral to any partnership, and throughout this litigation, Dechert has always acted in good faith in reliance on the assurances given to us by our former partner.
‘The court has now found Mr Gerrard to have committed conduct that is completely at odds not only with our values, ethos, and culture as a firm, but also with the high ethical and professional standards adhered to on a daily basis by our lawyers the world over.’
Gerrard said in a statement: ‘I and my family are devastated by today’s judgment. After over 30 untainted years as a solicitor I remain sure of the appropriateness of my actions, of my advice in relation to my former client and of my personal and professional integrity. I gave evidence to the best of my ability and believed I was telling the truth at all times. I would like to thank Dechert for their support. This is my only comment at this time.’
ENRC was represented by Hogan Lovells litigation partner Michael Roberts, who instructed Nathan Pillow QC, Tim Akkouh, Freddie Popplewell (Essex Court Chambers), Claire Montgomery QC (Matrix Chambers), Anna Boase QC, Matthew Hoyle, Alyssa Stansbury (One Essex Court), James MacDonald (7BR) and Jack Rivett (Erskine Chambers).
Clyde & Co disputes partner Richard Harrison acted for Dechert, instructing Andrew Onslow QC (3VB), Nicholas Purnell QC, Jonathan Barnard QC, Rachel Kapila (Cloth Fair Chambers), Michael Bools QC, Edward Harrison and Kyle Lawson (Brick Court Chambers).
The SFO fielded Eversheds Sutherland disputes partner Gary Pellow, who enlisted Simon Colton QC (One Essex Court), James Segan QC, Tom Richards, George Molyneaux, Tom Lowenthal (Blackstone Chambers), Rachel Scott (Three Raymond Buildings) and Joyce Arnold (One Essex Court).
Roberts commented: ‘Sadly, it is now clear that ENRC was betrayed and exploited as Dechert sought to maximise its own billings, even to the extent of leaking privileged material in order to prompt action by the SFO. Far from the integrity and fairness to be expected of a government law enforcement agency, the SFO was itself complicit in Dechert’s dishonest conduct.’
An ENRC spokesperson said: ‘We repeatedly urged both Dechert and the SFO to examine the evidence, and to draw the obvious conclusions. At every turn, we were rebuffed, and both Dechert’s and the SFO’s leadership chose, at great expense, to defend the indefensible. As much as ENRC welcomes today’s judgment, it is also profoundly concerned by the very serious implications for other Dechert clients and other subjects of SFO investigations.’
ENRC also confirmed it would be pursuing costs orders against both Dechert and the SFO, despite it claiming the counterparties refused ‘multiple invitations by ENRC to resolve the claims without the need for litigation.’
An SFO spokesperson said: ‘We welcome that the judge found against ENRC for the majority of its allegations against the SFO. We are considering the implications of this lengthy and complex judgement for the SFO and other law enforcement authorities.’