Law firm Dechert, SFO to learn lessons after stinging ENRC judgment

·3 min read
FILE PHOTO: A sign is displayed in an unmarked Serious Fraud Office vehicle parked outside a building, in Mayfair, central London

By Kirstin Ridley

LONDON (Reuters) -A former senior London lawyer breached his duty of care to his client, Kazakh miner ENRC, and the UK Serious Fraud Office (SFO) acted with "bad faith opportunism" ahead of one of Britain's longest criminal investigations, a London judge has ruled.

In a near 400-page judgment, Judge David Waksman said on Monday now-retired Dechert lawyer Neil Gerrard, who represented ENRC between 2011 and 2013, had been negligent and engaged with senior SFO officials without authority in a "reckless breach of duty", while the SFO induced him to do so.

But Waksman dismissed ENRC's other allegations against the SFO, including misfeasance in public office, deliberate destruction of evidence and leaking to the press.

The ruling comes days before the conclusion of an independent forensic review into the SFO, launched by the Attorney General after the Court of Appeal overturned two bribery convictions.

"The allegations against both sets of defendants are of the most serious kind," Waksman said, ruling that Gerrard had also instigated leaks to the media, given wrong advice about ENRC's potential criminal liability and unnecessarily expanded an internal investigation.

Eurasian Natural Resources Corporation (ENRC), which is at the centre of a near 10-year SFO investigation linked to the purchase of mineral assets in Africa, alleged Gerrard wanted to expand an internal investigation to inflate his fees and that the agency wanted to claim a high-profile corporate scalp.

No charges have been brought against the company or any suspects in the case and the company denies wrongdoing.

ENRC, which welcomed the judgment, will seek costs orders against both Dechert and the SFO and a further hearing will establish causation and loss. ENRC has said it is seeking multi-million pound losses against both Dechert and the SFO.

VICTORY IN PART

George Havenhand, a senior legal researcher at pressure group Spotlight on Corruption, said a partial victory would be a relief to the SFO, which has been criticised for its handling of other high-profile cases, but urged the agency to bring its ENRC investigation to a speedy conclusion.

The SFO welcomed news that the judge had found against ENRC for the majority of its allegations.

"We are considering the implications of this lengthy and complex judgement for the SFO and other law enforcement authorities," it said.

In a statement, Gerrard said he and his family were devastated by the judgment but that he stood by his actions.

"After over 30 untainted years as a solicitor, I remain sure of the appropriateness of my actions, of my advice in relation to my former client and of my personal and professional integrity," he said.

Dechert said it fully recognised the seriousness of the judge's findings in relation to Gerrard's conduct and was considering the judgment to see what could be learnt from it.

ENRC noted that it had repeatedly urged both Dechert and the SFO to examine the evidence and draw the "obvious conclusions", but had been rebuffed at every turn.

(Reporting by Kirstin Ridley; editing by Barbara Lewis)

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