Legal Business

Asia Pacific move: Harbour Litigation Funding opens Hong Kong office

Asia Pacific move: Harbour Litigation Funding opens Hong Kong office

Third party financier Harbour Litigation Funding (HLF) has opened an office in Hong Kong to meet a rise in class actions in the Asia Pacific region.

The litigation funder which is one of the world’s largest, has appointed Hong Kong International Arbitration Centre (HKIAC) managing counsel Ruth Stackpool-Moore to head the office as director of litigation funding.

HLF head of litigation funding Susan Dunn said: ‘Ruth is recognised as a leading authority on arbitration and litigation issues and is the ideal person to drive further growth for us in this region. Given our rising case demand from Asia Pacific, particularly class actions in Australia, opening an office in Hong Kong gives permanent in-region presence deepening our local connections.’

Before joining HKIAC, Stackpool-Moore was an associate specialising in international commercial arbitration and litigation with Debevoise & Plimpton in London, Orrick, Herrington & Sutcliffe in Paris and Coudert Brothers in Paris and Sydney.

Stackpool-Moore said: ‘I’ve seen first-hand how litigation funding can increase and improve access to justice and I’m looking forward to accelerating its progression across the world. We will be lobbying for change and increasing corporate and institutional awareness of third party funding in litigation and arbitration.’

HLF acts as the sole investment sub-advisor to the Harbour Funds which total £410million, and includes claims in Australia, Hong Kong and New Zealand with an expanding Australasian portfolio which includes new cases from Singapore.

In March the funder raised £230m to bankroll disputes as it looked to capitalise on rising demand.

Dunn said at the time: ‘demand for funding continues to outstrip supply of funding in the market. The fact remains there are still only a handful of funders in the world with access to meaningful sums available to fund disputes.’

victoria.young@legalease.co.uk

Legal Business

A 17-year dispute: Roadchef workers win legal battle against DAC Beachcroft client over employee shares

A 17-year dispute: Roadchef workers win legal battle against DAC Beachcroft client over employee shares

Hundreds of workers at motorway service operator Roadchef are set to share a windfall after a 17-year long legal battle against the company’s former chief executive regarding an employee share option scheme.

More than 600 people working for Roadchef, which has 21 service stations in England, Wales and Scotland, were due to benefit after former managing director Patrick Gee, who led the 1983 buyout of the firm, decided to allocate them around 20% of the company’s shares in the mid-80s. Gee died, however, before the scheme was completed and his successor, Timothy Ingram Hill was accused of cheating staff out of millions of pounds by disregarding Gee’s wishes. When Roadchef was bought out in 1998 by Delek, an Israeli multinational, the shares made Ingram Hill almost £27m.

Bankrolled by Harbour Litigation Funding, the claim involved the 1998 transfer of shares in Roadchef between two trusts, EBT1 and EBT2. EBT1 operated an employee share ownership plan for the benefit of employees while EBT2 was used to provide share incentives to senior management. The dispute brought to court concerned the circumstances in which the senior management trustees granted options over the shares to Ingram Hill personally, who served in several high powered positions at the company over a period of time including as managing director, chairman and chief executive.

Hardwicke Chambers trio Nigel Jones QC, PJ Kirby QC and Emily Betts were instructed by Capital Law for the claimant, while Fountain Court Chambers duo Michael Brindle QC and Giles Wheeler were instructed by DAC Beachcroft for the defendants.

The claimant argued that transfer of shares from EBT1 to EBT2 was void and that the transfer made was in breach of trust or breach of fiduciary duty owed to the beneficiaries of EBT1. There were further allegations that Ingram Hill dishonestly assisted in the breach, as he received the shares in the knowledge that they had been transferred in breach.

Having considered whether or not the transfer of the shares was entirely valid, void or voidable, in January 2014 Justice Proudman found that, irrespective of any wrongdoing on the part of Ingram Hill, the transfer was void as it was outside the power of the trustees. Proudman held that the claimant could therefore void the transfer of the shares. The High Court also found Ingram Hill liable for breach of fiduciary duty as he did not obtain the informed consent of other directors because he did not tell them he intended to secure the options over the shares.

The success for the claimants at trial ultimately led to a settlement between the parties. In a statement today (2 February), Capital Law said: ‘The terms of the settlement with Timothy Ingram Hill (and others, including his wife, Mrs Ingram Hill) remain confidential. The Roadchef Employee Benefits Trustees Limited will now undertake negotiations with HMRC and other parties to determine precisely how much money will be available for distribution. They will continue to work to administer the trust as swiftly as possible so that the beneficiaries can receive their respective share without further undue delay.’

sarah.downey@legalease.co.uk

Legal Business

Harbour Litigation funds claimant in dispute with Barclays

Harbour Litigation funds claimant in dispute with Barclays

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.’

sarah.downey@legalease.co.uk