The drawn-out legal battle between property billionaires, Vincent and Robert Tchenguiz, and those they hold responsible for the Serious Fraud Office (SFO)’s botched investigation into their business dealings has proved a costly affair. It has emerged they have already paid out a collective £5.1m legal bill to date in their £3bn litigation against Grant Thornton and others, surpassing the SFO’s £4.5m settlement to the pair two years ago.
First filed by Vincent Tchenguiz after a settlement with the watchdog in 2014, the pair allege defendants, includingGrant Thornton, conspired to pass information, dishonestly, to the SFO in order to instigate and encourage an investigation by the watchdog into his relationship with collapsed Icelandic bankKaupthing, and that they did so for their own commercial gain.
Robert Tchenguiz followed suit and filed against the same defendants in 2015.
The brothers have lost several court hearings to date and consequently were ordered to pay out large sums to the defendants, either in adverse costs or by way of security as a condition of their cases proceeding.
A breakdown of costs so far shows Robert Tchenguiz and his associated business interests have in total paid £2.7m while Vincent Tchenguiz and associated entities have shelled out £2.4m. This includes a £230,000 payment toKaupthing, a defendant, by Vincent in respect of its costs of the proceedings, as well as a £2m payment to Icelandic lawyer Jóhannes Rúnar Jóhannsson, who helped wind up the bank. Both of those parties have had their claims dismissed, a decision the brothers are appealing.
All parties have been ordered to pay the SFO’s costs, which so far total nearly £90,000 – or around £23,000 each.
A judgment handed down by Mr Justice Flaux in November on the security for costs application in the Robert Tchenguiz case showed the defendants collectively estimate their costs through to trial to be between £12m and £16m.
Travers Smith is acting for defendantsKaupthing and Jóhannsson, while Simmons & Simmons is acting for Grant Thornton. Travers instructed 4 Stone Buildings’ Robert Miles QC and South Square’s Jeremy Goldring QC. Vincent Tchenguiz is advised by McGuireWoods, which instructed Selborne Chambers’ Romie Tager QC and One Essex Court’s David Cavender QC. Robert Tchenguiz is advised by Stephenson Harwood, which instructed One Essex Court’s Alain Choo Choy QC.
The spiralling costs have now surpassed the SFO’s £4.5m payout to both brothers two years ago in civil damages prior to the beginning of trial – a stark reduction from the lawsuit against the SFO – claiming around £300m in damages. The £5.1m sum does not include their own legal fees, which are understood to run into the millions.
Other high-profile cases proving expensive at London’s High Court include the £4bn shareholder group action againstThe Royal Bank of Scotland, with the bank’s adviser firm Herbert Smith Freehills exceeding its cost estimate of £92m earlier this year.