Legal Business

Major LIA mandate for Enyo ends as SocGen settlement reached

Posted on |
Litigation Enyo LawHerbert Smith FreehillsMishcon de Reya

The Libyan Investment Authority (LIA) represented by Enyo Law, has settled its longstanding dispute against Herbert Smith Freehills (HSF) client Societe Generale (SocGen) and Mishcon de Reya client Walid Giamhi.

The LIA had sued Libyan businessman Walid Giahmi in 2014 in connection with an alleged $58m bribe paid to him by SocGen. The LIA has been fighting a number of cases to recoup losses made on deals during the financial crisis, including a separate action against American bank Goldman Sachs, which was dismissed after a two month trial last year.

But the LIA has now withdrawn its case against SocGen and Giamhi, and is liable for Giamhi’s costs. The LIA’s case was discontinued on the second day of trial, before oral openings could take place.

Giamhi was represented by Mishcon’s head of fraud defence Kathryn Garbett, with Enyo Law’s Simon Twigden acting for the LIA. HSF advised the French bank with a team led by Rupert Lewis.

Garbett, who described the LIA’s case as a ‘baseless conspiracy theory’, commented: ‘Giahmi provided full disclosure of all of his financial records and telephone communications dating back to 2006, which showed no illegal payments at all. Giahmi was also forced to seek confidentiality protection for the identities of other individuals in Libya giving evidence in the proceedings because of the risks to their lives and the lives of their families. The court agreed to impose these protective measures in the face of opposition from the LIA.

‘Giahmi is relieved that these proceedings, which had been brought in breach of Libyan Law, have come to an end.’

The LIA has been a key client for Enyo Law, which has advised it on this claim as well as LIA’s failed $1bn claim against Goldman Sachs over nine large financial derivative transactions that lost over 90% of their value.

In a statement Societe Generale said: ‘Societe Generale and the Libyan Investment Authority (LIA) jointly announce that they have signed a confidential settlement agreement that resolves all matters between both parties concerning five financial transactions entered into between 2007 and 2009 that have been the subject of legal action in the English High Court. The terms of the settlement are confidential. Societe Generale wishes to place on record its regret about the lack of caution of some of its employees. Societe Generale apologises to the LIA and hopes that the challenges faced at this difficult time in Libya’s development are soon overcome.’

Twigden’s team on the case consisted of Brick Court Chambers’ Mark Howard QC, Roger Masefield QC, Richard Blakeley and Craig Morrison. Lewis instructed 3 Verulum Buildings’ Adrian Beltrami QC, Nathaniel Bird and Emmanuel Sheppard alongside One Essex Court’s Sandy Phipps QC and Anthony de Garr Robinson QC. Garbett was supported in her defence of Giahmi by fellow fraud Mishcon defence partner Claire Broadbelt, and instructed Maitland Chambers’ Paul Girolami QC.

tom.baker@legalease.co.uk

Legal Business

HSF reaches settlement with eight White & Case-bound partners over exit terms

Posted on |
Litigation Herbert Smith FreehillsWhite & Case

A court battle between Herbert Smith Freehills (HSF) and eight of the firm’s former partners who quit to join White & Case has ended, with HSF reaching a settlement with the departing group.

According to orders made in the Supreme Court of New South Wales, the claimants, a group of 167 current HSF partners represented by Michael Pryse, came to agreement with the defendants, a group of eight former HSF partners including key project finance partner Brendan Quinn.

Under the terms of the settlement, the White & Case-bound partners will be restricted by a set of injunctions that were imposed at a previous hearing, including a condition that prohibits them from soliciting their former client bases. In addition, the group will be unable to join White & Case officially as partners until after 1 September 2017, but will still be able to practise in a general capacity. The injunctions had originally been interlocutory, but will now be made permanent until the end of 1 September 2017.

Aside from Quinn, the other defendants were Andrew Clark, Joanne Draper, Jared Muller, Tim Power, Joel Rennie, Alan Rosengarten and Josh Sgro.

A HSF spokesperson said: ‘We are pleased to announce we have reached a settlement in our proceedings. Under the settlement the current interlocutory injunctions will be made final. We are happy to bring this matter to a conclusion.’

A White & Case spokesperson added: ‘We are pleased that the parties have reached a settlement and that the matter has been resolved. All involved have agreed to keep the terms of the settlement confidential. The current interlocutory injunctions have been made final by the court and will continue to 2 September 2017. We are extremely pleased that the eight lawyers were able to join the Firm as of 2 March 2017 and are making a significant contribution to the Firm and its clients. We are happy to bring this matter to conclusion.’

Earlier this year, court documents revealed that the decision to classify White & Case as a ‘specified competitor’ was taken by the HSF Australia board on 31 August 2016, one day before the eight partners resigned en masse, within half an hour of each other.

White & Case’s move last year to hire the project finance team from HSF was considered one of the largest legal moves ever in the Asian market.

tom.baker@legalease.co.uk

Legal Business

‘Freeing up core teams’: HSF launches new alternative legal services hub in Johannesburg

Posted on |
Innovation Herbert Smith Freehills

Herbert Smith Freehills (HSF) announced today (25 April) that it is extending its alternative legal services (ALT) business to Johannesburg later this year.

The South African hub will run from the firm’s existing Johannesburg base, led by office managing partner Ed Baring. The service will be led by Lisa McLaughlin, director of ALT for the UK, US & EMEA.

The hub will combine a mix of legal expertise, process efficiency and technology to handle high-volume or document-intensive work more efficiently and cost effectively. The new team will be staffed by around five lawyers and 20 legal analysts initially.

‘We believe the introduction of an ALT team in South Africa will change the face of the local industry. Our clients will benefit enormously, not only through the realisation of value and savings but also because it frees up our core teams to focus on delivering support for more strategic high-value priorities,’ McLaughlin said.

Libby Jackson (pictured) HSF’s global head of alternative legal services, added: ‘ALT has developed rapidly over recent years from a successful nearshore “start-up” to an increasingly mature, complementary and seamless global part of the HSF offering for clients as a whole.’

The new hub will join the existing ALT hubs in Belfast, London, Shanghai, Sydney, Melbourne, Perth and Brisbane. Shanghai and Melbourne were launched last year, while London and Belfast were launched first in 2011.

The move marks a further expansion of HSF’s ALT business, which currently comprises of over 400 lawyers, legal analysts and technologists globally and became the sixth practice group of the firm on 1 May 2016.

georgiana.tudor@legalease.co.uk

Read more: ‘Taking over – one leader at HSF but is the culture clash over?’

Legal Business

Shearman, HSF and Milbank join Deutsche Bank panel as junior lawyer rules prove controversial

Posted on |
Adviser reviews Deutsche BankHerbert Smith FreehillsMilbank

Herbert Smith Freehills, Shearman & Sterling, Milbank, Tweed, Hadley & McCloy and Reed Smith have also taken places on Deutsche Bank’s controversial new legal panel.

The firms take their places alongside more than a dozen others – including the entire Magic Circle, on the panel which has made headlines after the bank attempted to remove fees for junior lawyers.

Others on the panel include Ashurst, Simmons & Simmons, Taylor Wessing and Hogan Lovells. US firms on the new panel include Latham & Watkins, Cleary Gottlieb Steen & Hamilton, Mayer Brown and White & Case.

The review process, which is understood to be mostly complete, stemmed from a request for proposal sent out to help Deutsche analyse its current policies and processes for external legal counsel. The process, dubbed ‘Project Eagle’, was led by global chief operating officer of legal and compliance Rose Battaglia, with appointments expected to last two years.

As part of the panel review, at tender stage, the bank attempted to implement a system under which trainee and newly-qualified lawyers would not be able to charge for work they carried out.

The system, which is more common in the US, has drawn some strong reactions from the profession. However, it is understood some firms on the panel were able to negotiate themselves out of the system.

One City partner from a panel firm said: ‘We were very concerned with it. Some firms pushed hard, some successfully, not to comply with that request. Those are the firms which offer the bank value for money.

‘I have some sympathy for Deutsche’s push. It doesn’t want to pay a one-year qualified lawyer, who is still an expensive asset, to do non-value-add work. It doesn’t want lawyers to learn on the job for them and get paid £250 an hour.’

However, one head of finance at a Deutsche panel firm said the trend for institutions to delete junior lawyer fees is ‘just for show’. He added: ‘For the purposes of presenting fee estimates, it’s a matter of the relationship between the institution and the relevant law firm as to how those numbers are presented.

‘If that means the client’s desire is not to show junior lawyer time because they feel the customer doesn’t want to pay for it, fine. But the figure will be the figure.’

A Deutsche Bank spokesperson declined to comment.

tom.baker@legalease.co.uk

georgiana.tudor@legalease.co.uk

Read more £- ‘Clients and rookie lawyers – some awkward truths’

Legal Business

HSF promotes 21 to partnership including alternative legal services head

Posted on |
Partnership promotions Herbert Smith Freehills

Herbert Smith Freehills (HSF) has promoted 21 associates globally across eight offices, with 12 based in the UK and EMEA region and nine in Asia-Pacific.

Among those promoted in the UK and EMEA region is Libby Jackson (pictured), the firm’s global head of alternative legal services. Jackson relocated from London to set up and lead the firm’s Belfast office.

London has come out on top in the UK and EMEA region, with three promotions in disputes, three in corporate, one in real estate, and one in finance.

Six out of the 21 partner promotions are women and across practices and all sectors including corporate, disputes, employment, pensions and incentives, finance, projects, real estate, energy, TMT and banks. The firm has publicly committed to having a 25% female partnership by May 2017 and 30% by May 2019.

This promotion round follows the promotions in December 2016 of five new partners in Australia, from the firm’s global project finance, projects and environment and planning teams.

Commenting on the promotions, Mark Rigotti, HSF’s chief executive officer said: ‘I would like to congratulate our new partners on their promotions. They are all highly-talented lawyers who represent the quality, breadth and depth of HSF around the world and demonstrate our ongoing investment in our business.’

The appointment of 21 lawyers to partner builds on the 20 partner promotions the firm made last year, when it made up ten lawyers in the UK and EMEA and ten in Asia-Pacific.

In 2015 the firm promoted 21 lawyers, with a majority being made up in Asia-Pacific as the firm invested heavily in Tokyo.

kathryn.mccann@legalease.co.uk

HSF partner promotions in full:

UK and EMEA

Greig Anderson, disputes, London

Rachel Campbell, finance, Paris

Paul Chases, real estate, London

David Coulling, corporate, London

Reza Dadbakhsh, corporate, London

Javier de Carvajal, disputes, Madrid

Nish Dissanayake, dorporate, London

Libby Jackson, alternative legal services, London

Rachel Lidgate, disputes, London

Nick May, finance, London

Donny Surtani, disputes, London

Christopher Theris, corporate, Paris

Asia-Pacific

Nick Carney, projects, Sydney

Hannah Cassidy, disputes, Hong Kong

Glynn Cooper, corporate, Kuala Lumpur

Peter Davis, corporate, Sydney

Jon Evans, finance, Melbourne

Tania Gray, disputes, Sydney

Clayton James, corporate, Sydney

Fatim Jumabhoy, employment, pensions and incentives, Singapore

Miles Wadley, finance, Melbourne

Legal Business

‘An industry-wide issue’: City reacts as Australian judge rules HSF partners can join White & Case

Posted on |
Australia Herbert Smith FreehillsWhite & Case

Leavers’ provisions in war for talent come under scrutiny

While the first round of a case that saw Herbert Smith Freehills (HSF) pursue an action against eight partners who quit to join White & Case in Australia has concluded, the dispute has highlighted the ongoing war over talent between UK firms and their US rivals.

Legal Business

Deal watch: Corporate activity in April 2017

Posted on |
Corporate Herbert Smith FreehillsKirkland & Ellis

HSF AND BLP ADVISE ON £1.1BN CHEESEGRATER SALE

Herbert Smith Freehills (HSF), Berwin Leighton Paisner (BLP) and Mayer Brown led as the owners of London’s tallest tower, known as the Cheesegrater, agreed to its sale for £1.1bn. HSF and Mayer Brown advised joint owners British Land and Oxford Properties Group, while BLP assisted buyer CC Land Holdings.

 

Legal Business

Fees to hit £125m for HSF client RBS as group action continues

Posted on |
Litigation Herbert Smith Freehills

The Royal Bank of Scotland (RBS) is set to accumulate around £125m in legal costs as it defends itself against 27,000 shareholders who lost money following its 2008 rights issue.

The shareholders, represented by Signature Litigation partner Graham Huntley, are the last remaining claimants after groups led by Quinn Emanuel Urquhart & Sullivan, Stewarts Law and Mishcon de Reya settled for £800m in December 2016.

Herbert Smith Freehills (HSF) is acting for RBS on the case, with a team lead by partners Adam Johnson, Simon Clarke, Kirsten Massey and James Norris-Jones. In June 2016, the firm came under scrutiny after it was revealed legal costs could exceed estimates of £92m.

According to an interim High Court decision, £6.5m of RBS’s costs were incurred in relation to defending four of the bank’s individual directors, including Fred Goodwin. A further £25m is estimated to be incurred from the date of settlement until the end of the trial.

In his judgment, Justice Hildyard stated: ‘The claimants are adamant that these costs are so unreasonable and disproportionate that only 50-60% would be recoverable on a detailed assessment: but even on that basis the figures would remain very large.’

In comparison, the judgment also reveals the claimants’ costs exceed approximately £20m, though not all amounts have yet been billed to the claimants.

Jonathan Nash QC, Peter de Verneuil Smith and Ian Higgins of 3 Verulam Buildings have been instructed by Signature Litigation, while David Railton QC, David Murray and Natasha Bennett of Fountain Court Chambers have been instructed by HSF.

The case has been dogged in controversy since it began 2014. In June last year Legal Business revealed Quinn, Stewarts and Signature were seeking millions worth of costs incurred from the claimants of Mishcon. Mishcon partner Richard Leedham, who took the instruction to lead the institutional clients from Signature last year, filed a costs estimate totalling £700,000 for legal work on the case up until that point. Mishcon settled the issue with the other firms weeks after.

RBS and HSF did not immediately respond to a request to comment.

tom.baker@legalease.co.uk

Legal Business

HSF public international law head to boost Boies Schiller City practice following Miles exit

Posted on |
Litigation Boies Schiller FlexnerHerbert Smith Freehills

US litigation specialist Boies, Schiller & Flexner has hired Herbert Smith Freehills (HSF) head of public international law Dominic Roughton.

Roughton (pictured) will complement the firm’s international arbitration group in London, following the exit of long-serving Wendy Miles QC who quit for rival US firm Debevoise & Plimpton last month.

The firm has also signed a lease to double its office space moving from its current location in Tower 42  to a 13,000 sq ft location on the top floor of 5 New Street Square.

Experienced in international state-to-state and investor-state disputes, Roughton has acted as counsel in commercial arbitrations under ICC, LCIA, UNCITRAL, SCC, SIAC, JCAA and CIETAC rules.

Boies Schiller managing partner Jonathan Schiller said: ‘International arbitration has been a key area of focus for our firm ever since it was founded 20 years ago, and we have built a record of which we are justifiably proud.

Managing partner for Boies Schiller’s London office, Natasha Harrison, told Legal Business: ‘He’s not a direct replacement [for Miles]. It’s about adding substantial depth to the international disputes practice, particularly in international arbitration. Dominic has an exceptional public international law background which complements our existing commercial arbitration offering.

‘Our strategy for growth is led entirely by client demand. That means finding the right people to meet that demand. Dominic and Matt Getz, recruited last year as part of the global investigations practice, are prime examples of exactly the right people.’

Harrison also indicated that the firm plans to make more partner promotions in London in the near future, after Fiona Huntriss’ promotion last year.

The arrival of Roughton follows the move Kenneth Beale made to Boies Schiller in June 2015, joining from WilmerHale’s arbitration group.

The firm generated £7.6m in the year to October 2015. The UK practice has handled major work for Barclays and M&G Asset Management, as well as acting for bondholders on a high-profile dispute impacting Canary Wharf.

In 2016, Boies Schiller brought a case against the Greek state on behalf of gambling company OPAP, after the state appropriated valuable license rights in the Greek lottery.

Exit terms at Australian firm HSF are notoriously stringent, with the firm recently battling a claim against eight former partners who quit to join White & Case. Court documents from the dispute revealed that former partners cannot join a ‘direct competitor’ within six months of resignation and are also prohibited from practising within ‘restricted areas’ surrounding HSF offices in the same time period.

HSF said New York partner Laurence Shore would lead the global public international law practice with assistance from partner Christian Leathley and partner Andrew Cannon.

tom.baker@legalease.co.uk

Read more: ‘Focal points – Law boutiques and the art of focus’

Legal Business

Court documents revealed: Inside HSF’s battle with White & Case bound partners as judgment looms

Posted on |
Litigation Herbert Smith FreehillsWhite & Case

As judgment is expected tomorrow in a court battle between a group of Herbert Smith Freehills (HSF) partners and their former colleagues who quit for White & Case, the documents from case reveal how the group quit, and what HSF wants to do to restrain them.

A group of 167 HSF partners took action in mid-February against eight former partners who resigned from HSF to join White & Case, including key project finance partner Brendan Quinn. The case has been heard in the New South Wales Supreme Court before Justice Robert McDougall this week, with HSF wanting to stop the White & Case partners from joining on their planned start day – tomorrow (2 March) and instead have them join on 1 September this year. At issue is whether certain clauses in HSF’s partnership deed are enforceable.

HSF claims the partners co-ordinated their exits, citing emails from Quinn to White & Case partners, and a Legal Business article where the hires are first revealed.

HSF suggests Quinn had been preparing the exits as early as September 2015 this year, as evidenced by emails between Quinn and senior management at the US firm. Quinn had also sent an email to his personal email account recording an agenda with the following items ‘update on vote, update on offer letters, staff, accommodation,’ and with the closing item ‘when do we pull the pin.’

According to the documents, the board of HSF Australia amended the firm’s partnership deed to make White & Case a ‘specified competitor’ on 31 August 2016, the day before the eight partners resigned. According to the deed, former HSF partners can’t work for ‘specified competitors’ for six months after they resign.

On 1 September, the partners resigned within five minutes of each other, except Jared Muller, who quit about half an hour later.

HSF is also trying to restrict White & Case partners from working in particular areas, with maps annexed to the documents indicating restricted zones where HSF believes the partners should not work.

HSF argues that the location clauses are reasonable because outgoing partners ‘may, post-retirement, tend to be able to maintain a higher level of connection with HSF’s clients…in closer proximity to his or her former HSF Australia office’ and ‘restraints against working in competition within a restricted area are difficult for HSF Australia and/or the Global LLP to police.’

In a December 2016 letter addressed to the HSF Board, Seyfarth Shaw, the law firm representing the eight former partners, said the defendants did not regard these clauses because ‘they do not protect any legitimate business interest of Herbert Smith Freehills.’

HSF partners are being represented by Michael Pryse, while the White & Case partners are being advised by Seyfarth Shaw partner Chris Gardner. A mediation scheduled for 13 February failed.

White & Case’s move late last year to hire the 10-partner project finance team from HSF was one of the largest legal moves ever in the Asian market. A senior partner at White & Case has indicated that the team controls around £30m of business, while HSF put the figure at around £20m when calculated using an average of the team’s billings over three years.

Legacy Herbert Smith had some of the toughest exit terms in the City which led to a stand-off when property partner Chris de Pury quit for Berwin Leighton Paisner. Herbert Smith had threatened to enforce a 12 month convenant on top of a year’s notice.

However the firm’s merger agreement with Freehills overhauled the terms, cutting the notice period from 12 months to six, making it easier for partners to quit at a vulnerable moment.

tom.baker@legalease.co.uk