Ex-Dechert London partner leaked client details to press
After a closely watched 47-day hearing, a UK court rules in favor of former mining client ENRC
Ex-Dechert London partner leaked client details to press
After a closely watched 47-day hearing, a UK court rules in favor of former mining client ENRC
A former partner at Dechert has admitted that he violated the firm's values, ethos, and culture after being found guilty of leaking information about a client to the press by a UK court.
According to a High Court judgment handed down today, Mr Justice Waksman has confirmed a series of damning allegations concerning the conduct of Eurasian Natural Resources Corporation (ENRC)'s ex-London head of white-collar crime Neil Gerrard.
ENRC brought proceedings against Dechert and Gerrard in 2021, alleging reckless breach of fiduciary duty in relation to an internal investigation conducted by Dechert between 2011 and 2013. The trial lasted 47 days and was closely watched by many observers.
ENRC, primarily through Gerrard, commissioned Dechert in 2011 to investigate the activities of a subsidiary in response to a whistleblowing email.
The Times published an article in August 2011 that was highly damaging to ENRC and that was clearly based on leaked documents, of which some were privileged, Judge Waksman wrote in an executive summary of the judgment.
The Serious Fraud Office (SFO) contacted ENRC within days to request a meeting with the SFO's former director Richard Alderman regarding internal investigations involving corruption.
ENRC subsequently engaged with the SFO on the advice of Gerrard, thereby "substantially" increasing the scope of the investigation, according to the judge who stated that there were 30 "direct contacts" between the SFO and Gerard that were not attended by any representative of ENRC.
Before ENRC terminated Dechert's retainer in March 2013, the firm had generated fees of £13m for its work and generated further damaging newspaper articles about ENRC and the involvement of the SFO, based on confidential leaked information, according to Judge Waksman.
According to the judge, in June of that year, documents regarding ENRC were anonymously sent to the SFO in a brown envelope containing 'confidential and in some cases privileged information'.
In a summary of his findings, the judge wrote: 'In my judgment, I found that Mr Gerrard had indeed been responsible for all three leaks to the press. Furthermore, I discovered that he engaged with Mr Alderman without authority, at least alerting him to the August article. The following day, Mr Alderman informed Mr Gerrard of the upcoming SFO letter and Mr Gerrard was informed about it immediately.'
Moreover, the judge found Gerrard to have breached his duty in respect of 22 of his contacts with the SFO and was 'negligent (and for the most part reckless)' in relation to several other allegations, including: 'wrong advice' regarding 'the risks involved in engaging with the SFO in the way ENRC did'; 'unnecessary expansion of the investigation' and 'being the individual who transmitted the materials to the SFO in June 2013'.
In addition to finding that the SFO had breached its own duties in 15 of 30 direct contacts, the judge found that: "On the facts..." (providing proof of causation and loss) the tort of inducement to breach of contract had been established by Mr Gerrard. There were also some, but not all, of the elements of misfeasance in public office that were established, but they were not sufficient to establish the tort in and of itself.
A spokesperson for Dechert responded to the judgment by saying, "We fully acknowledge the seriousness of the judge's findings regarding Mr Gerrard's conduct." We will review the judgment to determine what we can learn from it. A partnership cannot function without trust among partners, and Dechert has consistently acted in good faith throughout this litigation based on the assurances that were provided to us by our former partner. A court has concluded that Mr Gerrard engaged in conduct that is completely at odds with not only our values, ethos, and culture as an organization but also with the high ethical and professional standards observed by our lawyers worldwide on a daily basis.
In a statement, Gerrard thanked Dechert for its support as he prepares to retire in 2020. In addition, he said: "My family and I are devastated by today's judgment. I am confident of the appropriateness of my actions, of my advice regarding my former client and of my personal and professional integrity after over 30 years as a solicitor. Throughout my testimony, I believed I was telling the truth to the best of my ability.
A spokesperson for the ENRC stated: 'We continually urged both Dechert and the SFO to investigate the evidence and to draw the obvious conclusions. Despite our best efforts, the SFO and Dechert chose, at great expense, to defend the indefensible.
ENRC was represented by a team from Hogan Lovells led by partner Michael Roberts. Judge Johnson stated that a further hearing may be scheduled in the near future to address questions of causation and loss.