Legal Business

Signature Litigation acts for Ivanishvili as the Georgian billionaire sues Credit Suisse

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Litigation Signature Litigation
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Signature Litigation has been instructed by the investment fund of Georgian billionaire Bidzina Ivanishvili and his family in a dispute against Credit Suisse for losses over mismanagement of his portfolio in Switzerland, which have led to criminal proceedings against the bank’s fund managers.

Having forged his estimated $5bn wealth in post-Soviet Russia through banking, metals, and real estate, and serving as the prime minister of Georgia in 2012 for one year, high profile tycoon Ivanishvili (pictured) entrusted his money to the bank and claims that unauthorised hazardous trading caused significant losses to his portfolio.

In particular the claim relates to former banker, Patrice Lescaudron, who was in charge of Ivanishvili’s account. Ivanishvili filed criminal complaints with Geneva’s public prosecutor in December and January 2015, alleging fraud and mismanagement.

Signature has now been instructed to oversee global strategy and coordination of claims reported to be worth hundreds of millions of dollars, although the firm declined to comment on the value of damages pursued. Recovery actions against are being brought against the bank’s private wealth team in Geneva and its Bermudian-based life insurer.

In a statement the firm said it is currently considering claims against other parts of the Credit Suisse Group for ‘various alleged failures by Credit Suisse to manage client funds and investments, and as regards monitoring, commissions and preservation of trust assets.’

The most recent financial statements for Credit Suisse, for 2015, made a provision of CHF821m in relation to litigation including claims arising from the various parts of the group which are exposed to similar claims from other wealthy groups.

It is understood Credit Suisse has not yet appointed external counsel for the action – although it is known to primarily use Freshfields Bruckhaus Deringer for disputes work.

In addition to criminal proceedings in Switzerland, Signature is working with its overseas instructed law firms including offshore firm Harneys and has applications pending before the courts in the British Virgin Islands and the Bahamas for permission to bring derivative claims in the name of investment companies in the Credit Suisse structure that was set up to manage the client funds and investments. Signature confirmed it is in the course of preparing proceedings in other jurisdictions.

The upcoming legal battle is an unwelcome distraction for Zurich-based Credit Suisse, which is struggling to shift strategy under new chief executive Tidjane Thiam. In 2014 the Zurich-headquartered bank pleaded guilty to criminal charges that it helped Americans evade taxes, and was fined $2.5bn by the US justice department.

Signature’s appointment to a multijurisdictional dispute signals the increasing acceptance and recognition of the disputes boutique model. Signature’s team is led by partner Adam Rooney who joined the firm from Greenberg Traurig Maher in November 2015, and is working with founding partner Graham Huntley.

Huntley told Legal Business: ‘It is perhaps unusual to see a niche litigation practice instructed to bring such wide-ranging international claims but this is a strong validation of the niche firm offering that may be a sign of more to come.’

Credit Suisse declined to comment.

sarah.downey@legalease.co.uk

Legal Business

Signature Litigation: Policing arbitration – can accountability deficit be addressed?

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Disputes Signature Litigation
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Natalia Chumak

Partner, Signature Litigation

natalia.chumak@signaturelitigation.com

Nick Storrs

Senior associate, Signature Litigation

nick.storrs@signaturelitigation.com

Over recent decades, arbitration for dispute resolution has become increasingly popular. Commercial parties are becoming far more amenable to resolving their differences by private means rather than through national court systems, which can be more costly and time-intensive. There is, of course, nothing wrong in engaging in a private, consensual process and there are numerous advantages of doing so. But the framework within which such disputes are resolved must be unimpeachably robust in order to meet the objective in any dispute resolution process: to do justice between the parties in accordance with the law. Accordingly parties’ autonomous right to submit disputes to arbitration needs to be structured within a legislative framework which governs and regulates the arbitral process. This is in part to:

Legal Business

Signature Litigation: Legal privilege: far from resolved

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Litigation Signature Litigation
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Abdulali Jiwaji

Partner, Signature Litigation

abdulali.jiwaji@signaturelitigation.com

Daniel Hayward-Hughes

Associate, Signature Litigation

daniel.hayward-hughes@signaturelitigation.com

The right of clients to preserve the confidentiality in advice provided by their lawyer is fundamental to English common law. Other common law jurisdictions such as Australia, New Zealand, Singapore and Hong Kong have all gone one step further than England by entrenching legal advice privilege and protection from disclosure into statute. Legal advice privilege applies to confidential communications between a lawyer and client for the purpose of seeking or obtaining legal advice. Problems can arise though when it is unclear who the instructing client is and whether the lawyer is actually a ‘lawyer’ for the purposes of the common law test for privilege.

Legal Business

Funding issue sees Signature Litigation replace Fladgate on RBS litigation

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Litigation FladgateSignature LitigationThe Royal Bank of Scotland
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Having helped secure third-party funding, City boutique Signature Litigation has been instructed by the RBS Shareholders Action Group in its high profile £1.2bn court battle against the Royal Bank of Scotland (RBS), the second change for the case and a move which has replaced Fladgate.

In November last year Legal Business revealed that Bird & Bird had lost its high profile advisory role on the complex RBS shareholder dispute over its 2008 rights issue, a significant instruction that was given to Fladgate.

But that has now been handed to Signature, with founder and partner Graham Huntley going on the record in mid-July. Huntley has instructed 3 Verulam Buildings duo Jonathan Nash and Peter de Verneuil Smith, who appeared for the group at the case management conference last week, along with junior Ian Higgins.

Bird & Bird had been representing the bank’s former chief executive John Greenwood and the RBoS Shareholders Action Group Limited, with around 12,000 retail and around 100 corporate, institutional and charitable members (the BB Action Group). At the time the firm said it had continued to ‘work on their behalf despite issues with receiving payment of fees from the Action Group’.

According to one source close to the case, this time there has been no disagreement between the claimants and Fladgate in relation to fees but rather the absence of funding for the case as the ‘money ran out’. However, John Campbell QC, a representative for the client group, said in evidence to the Court that ‘the instruction of Signature brought to the Group some legal advisers who clearly had more experience than many in funding, and funding negotiations’, adding that ‘all the previous stumbling blocks have been overcome as we have secured an agreement with respect to our current funder’.

A statement issued today (3 August) stated that funding had ‘hampered the group’s ability to participate in recent months’, something which Mr Campbell said in evidence Signature had ‘worked hard to resolve’.

Signature’s claimant group is the largest of three currently in dispute with RBS, with the others represented by Quinn Emanuel Urquhart & Sullivan and Stewarts Law.

The action is being brought against the bank’s former chief executive Fred Goodwin and three other directors, and relates to a rights issue in April 2008, in which RBS sold its shares at £2 per share. The claimants allege that the prospectus on which the rights issue was based was ‘defective’ and contained material misstatements and omissions.

Herbert Smith Freehills continues to defend RBS in both cases.

sarah.downey@legalease.co.uk

Legal Business

Comment: Legal boutiques – unheralded, thriving and coming after your lunch

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Comment Enyo LawSignature LitigationVolterra Fietta
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The rise of boutiques has been yet another development shaping the legal industry that no-one predicted. Conventional wisdom for years held that law firms should go global or specialise but that was largely in the context of mid-tier players becoming more tightly defined around a handful of profitable practice areas (which pretty much hasn’t happened either).

What we have seen instead – as we address this month – is a flourishing of highly specialised and lean law firms launched or expanded since the financial crisis reshaped the market. Obviously, much of this is due to the post-

Lehman emergence of litigation shops, among them Enyo Law, Signature Litigation and Volterra Fietta, off the back of a disputes boom and the stifling conflicts stored up by global law firms. And these firms have been very successful in a short space of time, in some cases generating levels of profitability comparable to elite City practices and eye-watering top-line growth.

But perhaps it was the 2014 launch of arbitration super-boutique Three Crowns that demonstrated the ambition of this new breed.

Since boutiques have proven that they can operate in a number of areas profitably with considerably lower costs than corporate law firms, the pitch is starting to look very attractive for clients, who benefit from more partner time and relative value.

The appeal for departing partners is obvious: they escape the conflicts and compromises of Big Law and regain the autonomy City leaders in reality only grant to the 20% of their partnerships viewed as strategically key. This attraction is further magnified if you are practising in one of the expanding range of product lines deemed secondary or surplus to the business.

But the appeal goes way beyond pounds and pence. Malcolm Gladwell’s celebrated book on over-achievers, Outliers, puts forward a great criteria for what makes work meaningful for individuals in the context of high performance. The book suggests meaningful work has complexity, to provide mental stimulation and sense of achievement; autonomy, which grants the individual a feeling of dignity and control of their own life; and has a strong link between effort and reward, which speaks for itself.

Well, you only have to look at those three factors to see how major law firms can fail to provide meaningful careers for many partners on at least two criteria and the seductive appeal of the boutique in comparison. Throw in the fact that partners have substantial resources to invest and the low start-up costs and you almost wonder why we haven’t seen more legal launches.

A question remains as to whether the boutique model can be applied to deal work as has happened in investment banking. There are obvious factors playing against that but I’m not sure they’re insurmountable. Perhaps the biggest barrier is that the kind of M&A veterans who might be inclined to strike out on their own are joining the City arms of US practices instead. But even if the specialist M&A shop never really emerges in law, boutiques are surely more than just here to stay, they look set to thrive.

alex.novarese@legalease.co.uk

For more analysis of the growth in boutique law firms see: Go your own way – legal boutiques and the seductive appeal of being your own boss

Legal Business

Grow your own – Signature Litigation plans trainee scheme with other law firms

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Trainee retention Signature Litigation
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On the back of robust financial growth for the 2013/14 year, high-flying boutique Signature Litigation is exploring developing a trainee scheme, with a proposal to match itself with non-competing firms and ‘facilitate a programme of reciprocal secondments’.

Although talks are in the early stages, Signature’s proposal is that it and participating firms would enter into a secondment agreement which would see trainees being placed for six month seats in the other firm but with each retaining the employer obligations of their respective trainees. It is expected that the trainee swaps will be simultaneous.

Speaking to Legal Business, Graham Huntley (pictured) said: ‘It is driven by a desire to ensure that we are able to provide opportunities for everyone in the firm to reach their maximum potential which includes providing a career path for our paralegal team. It also offers an opportunity for us to “grow our own” high quality associates of the future with exposure to high quality work from the outset as a supplement to our future pipeline of external recruits.’

Huntley added that the firm’s desire to remain focused on contentious work made it difficult to provide the full range of experience required. The firm has drafted in Kindleworth, a specialist provider of managed services to law firms, to consult with other non-competing firms practising either contentious or non-contentious work over the potential to conduct the secondment swaps.

The firm is aiming to launch the programme during the next six months with an initial intake of one, rising to an annual intake of two in the longer term. Its initial approaches so far have been ‘received with interest by firms who have previously not considered the option of offering trainee contracts’.

Founded in 2012 by former Hogan Lovells partners Graham Huntley and Helen Brannigan, the 30-member firm has seen its revenue surge by 70% in the last financial year from £4.82m to £8.17m while profit margins are estimated at 50%.

sarah.downey@legalease.co.uk

Legal Business

Signature Litigation grows revenues 70% to £8m and unveils team profit-sharing model

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Financial results 2013/14 Signature Litigation
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High-flying disputes boutique Signature Litigation has seen its revenue surge by 70% from £4.82 to £8.17m in 2013/14, despite having only launched two years ago, while profit margins are estimated at 50%. The firm has also taken an innovative approach by operating an all-inclusive, fully transparent, profit-sharing model.

Founded by former Hogan Lovells partners Graham Huntley and Helen Brannigan, the 30-member firm has seen some substantive disputes mandates come its way since its inception, taking on a role in the heavyweight Fortress v Blue Skye litigation, a dispute that arose out of the reorganisation of the €200m Blue Skye Investment Group in Italy. Listed for trial over 12 weeks from May this year, Signature represented the defendant Blue Skye while Slaughter and May and DAC Beachcroft acted for Fortress Value Recovery Fund. ‘There can be no more testing mandate for a niche firm than taking on a massive case of that nature in mid-course against two very well-resourced opponents,’ said Huntley.

It is apparent that Signature wants to foster a different culture from the traditional Big Law model. The firm’s budget includes a proportion of profit that is pooled and generates a profit share divvied up among all members of staff, from partner to paralegal. These are not meagre figures, with year-one profit shares for members equating to 21% of their base salary, in year two rising to 33.4%. Huntley says it is near impossible to execute such a strategy in a major law firm and the collegiate culture a small-sized firm breeds is much more amenable to the idea.

Huntley and co have also brought in operational support in order to focus wholly on clients. From launch, the firm hired members of Kindleworth, a specialist provider of managed services to law firms, to take on administrative tasks, including Kevin Munslow, former chief executive of Olswang, who acts as Signature’s chief executive and is responsible for developing the firm’s agenda; and Tom Arrowsmith, Olswang’s former head of risk and compliance, who serves as risk management director.

The firm has committed to further expansion plans and last month hired Simmons & Simmons litigator Abdulali Jiwaji. Having trained at legacy Lovells before working as an associate for two years in Allen & Overy’s litigation team, he moved to Simmons’ Hong Kong practice in 2011 as a partner. He has now relocated back to the City, and will continue to focus on complex financial market disputes.

When asked about growth plans, Huntley was agnostic about what comes next, but pledged to limit Signature’s growth. ‘We’ll lose too many advantages. If we started getting bigger than 15 partners, it would be a problem. Often, firms try to diversify and lose the ability to be small, nimble and fast. There is a huge advantage in staying small. That is a particularly important feature of the litigation market.’

For more disputes analysis, see Legal Business’s ‘Disputes Yearbook 2014’ here.

sarah.downey@legalease.co.uk

Legal Business

Signature Litigation grows revenues 70% to £8m and unveils team profit-sharing model

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Financial results 2013/14 Signature Litigation
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High-flying disputes boutique Signature Litigation has seen its revenue surge by 70% from £4.82 to £8.17m in 2013/14, despite having only launched two years ago, while profit margins are estimated at 50%. The firm has also taken an innovative approach by operating an all-inclusive, fully transparent, profit-sharing model.

Founded by former Hogan Lovells partners Graham Huntley and Helen Brannigan, the 30-member firm has seen some substantive disputes mandates come its way since its inception, taking on a role in the heavyweight Fortress v Blue Skye litigation, a dispute that arose out of the reorganisation of the €200m Blue Skye Investment Group in Italy. Listed for trial over 12 weeks from May this year, Signature represented the defendant Blue Skye while Slaughter and May and DAC Beachcroft acted for Fortress Value Recovery Fund. ‘There can be no more testing mandate for a niche firm than taking on a massive case of that nature in mid-course against two very well-resourced opponents,’ said Huntley.