Third party financier Harbour Litigation Funding is to bankroll a claim against Barclays alleging the bank mis-used confidential information in its 2010 takeover of Tricorona.
The £164m claim is being brought by UK trading and investments firm CF Partners, which alleges that Barclays used confidential information it supplied to the bank when requesting funding for its own bid for Tricorona.
The claimants say the bank breached a confidentiality agreement CF Partners held with Barclays for an advisory service on the acquisition of Tricorona and used the confidential information to secure a £100m takeover of Tricorona – after the deal stalled in the wake of the financial crisis.
RPC’s Tom Hibbert and Andy McGregor are advising the claimants alongside Brick Court Chambers’ Tim Lord QC, One Essex Court’s Orlando Gledhill and Brick Court Chambers’ Richard Eschwege.
‘CF Partners approached Barclays in the context of securing financing to purchase Tricorona,’ says RPC’s Tom Hibert. ‘[It] was understandably surprised when Barclays subsequently purchased Tricorona in breach of duties of confidence.
‘Meanwhile, Freshfields Bruckhaus Deringer’s Simon Orton is representing Barclays and Tricorona along with 3 Verulam Buildings’ barristers Ewan McQuater QC, Sandy Phipps and David Quest QC.
Barclays has issued a statement claiming the case is ‘entirely without merit’ and ‘will be contesting it vigorously.’
‘Barclays never had an advisory relationship with CF Partners,’ said the statement. ‘[It] has traded carbon since 2004 and is one of the world’s largest emissions traders. Barclays has also actively facilitated the trading of secondary market Certified Emission Reductions (CERs) since 2006. Being a leader in emissions trading, Barclays already had a relationship with Tricorona before it had any involvement with CF Partners.’
The eight-week litigation begins in London’s High Court on May 13 and is expected to be keenly observed. It, along with a £4bn action filed by the shareholders of RBS in early April over the bank’s 2008 rights issue, will be a source of guidance for practitioners in particular.
According to Hibbert, in the Barclays case the court’s assessment of ‘the confidentiality of that information and its quantification of any loss will serve to act as further guidance for future cases’. The RBS quasi-class action, meanwhile, is set to test the prospectus provision of s90 of the Financial Services and Markets Act 2000 for the first time.
Harbour’s head of litigation funding Susan Dunn confirmed to Legal Business that it had decided to fund the Barclays case based on its usual case criteria assessment. That assessment is a fourfold approach that considers whether the defendant is creditworthy; if the cost of the case is proportionate; if the case it has strong legal merit; and how experienced the legal team is.
‘We are increasingly seeing clients with strong cases consider the option of third party funding in order to spread risks and share the funding obligations,’ says RPC’s Hibbert. ‘For cases where we, counsel and the funder consider that the merits are good enough, it can be a win-win situation for both the client and the funder.’
‘Anyone who has ever sought third party funding on behalf of a client will be well aware how exacting the process is and that funders are only minded to fund cases where they see substantial prospects of success,’ he added.
Harbour is the UK’s largest litigation and arbitration funder, with capital reserves worth £180m. This week it appointed as non-executive directors Michael Napier QC, the former president of the Law Society, and Nicola Mumford, the former London managing partner of Wragge & Co.
Harbour chief executive Brett Carron, said: ‘With Harbour’s continued growth in a fast-developing market, we welcome their leadership and business judgment. As non-executive directors on the board, their experience will help us maintain our record of strong governance.’