If you haven’t been following Dechert’s epic courtroom drama with one of its former clients, you’re probably wondering why the acronym ‘ENRC’ constantly appears in your inbox. But I urge you to familiarise yourself with it.
Starting in 2011, more than ten years and millions of pounds later, the debacle this week finally reached its conclusion at London’s High Court. Replete with allegations of duplicity, conspiracy and dishonesty, it’s the kind of cautionary tale you can imagine people telling junior lawyers, warning them of the dangers of getting too ambitious, too greedy, promising too much, and of failing to keep hubris in check.
At its heart is Dechert’s big-billing former head of white collar crime, Neil Gerrard, and FTSE 100-listed mining company ENRC—a former client of Gerrard’s who brought him in to conduct an internal investigation into a potential fraud in one of its subsidiaries. In its sensational judgment, London’s High Court found that, over the course of his instruction, Gerrard had delivered “wrong” and “unnecessary” advice in order to cajole ENRC into believing it was likely to come under investigation by the Serious Fraud Office.
But the plot thickens.
Gerrard was, according to the judgment, in cahoots with the SFO, feeding confidential information to top investigators in order to continually “expand his investigation”. All in a bid to extract more money from ENRC, and build what he had, allegedly, promised would be a £12 million practice at Dechert.
Gerrard is no stranger to controversy, with other international litigations—themselves bloated with intrigue—swirling about him for years. Indeed, the presiding judge, Justice Waksman, described Gerrard as a man “obsessed with money”, with a “large ego”, armed with the “belief that he is always right”. But, with causation and loss still undecided, for Dechert the case could prove a monumental test on all fronts: financial, reputational, systemic and cultural.
Questions are already being asked: Did other partners at Dechert know what was going on? Did they know Gerrard had a tendency to scare his clients into expanding their investigations, all in the service of increasing fees?
If the answer to either of these is yes, could this in turn hinder Dechert’s ability to make a claim on its insurance—given a general exclusion on dishonesty—were it to lose on causation and end up having to shell out what one person estimated could be “hundreds of millions” of pounds?
Will Dechert turn on Gerrard, whom the firm has stood by throughout the controversy?
Can clients still trust Dechert?
An appeal could be in the offing. There could be a separate hearing for loss and causation. There could be a regulatory investigation, with the SRA currently poring over the 400-page judgment. In short: a decade-long case doesn’t end at the snap of a finger. So look out for more coverage on this.
Meanwhile, it isn’t just Dechert that found itself making headlines for suspect reasons this week. Partners at fellow U.S. giant White & Case also came under the gaze of the U.K. justice system.
At an employment tribunal, former White & Case tax partner Michael Wistow has accused the firm of disability discrimination, claiming the firm had a “toxic work environment”, owing in large part to the behaviour of senior management.
The claim is against both White & Case and London partner Oliver Brettle, who sits on the firm’s global executive committee.
Jack Womack reports that, in preliminary tribunal hearings in London, Wistow claimed to have suffered from mixed anxiety and depression since at least October 2018.
Wistow claimed: “At the time it felt like I was being threatened if I didn’t just shut up and put up. White & Case knew that I was in a very difficult place in my personal life and it felt that this meant I could be treated however they pleased.”
This is not the first time White & Case’s London office culture has come under scrutiny. In 2021, we ran an investigation in which insiders described the office as a cradle of “in-fighting” “toxicity” and “misery”, where “if you crossed certain people, you’re toast”.
White & Case mightn’t be facing potential costs of Dechert proportions, but the reputational threat is just as real, particularly at a time when clients are looking ever more pointedly at law firm culture and partner behaviour.
Women, Influence, Power and Law
This week saw the return of our Women, Influence, Power and Law conference in the U.K. after a virtual event last year. The two-day conference buzzed with energy, with around 150 attendees consisting of major in-house leaders sharing their thoughts on the hottest topics of the day.
Keynote speakers included journalist and comedian Viv Groskop and former Grant Thornton U.K. CEO Sacha Romanovitch, who shared their thoughts on the perception of imposter syndrome and how to best lead your teams.
Our host of panel sessions covered a huge variety of topics, including: how crucial it is that GCs recognise their part to play in tackling the climate crisis; whether it’s ever appropriate to cry at work; how to show your teams to solve problems themselves without immediately giving them the answer; having the confidence to be authentic and what that means; driving sustainable improvements in diversity and how to manage crises.
Intimate roundtables hosted by our sponsors and Law.com International journalists provided a setting for deeper discussion of personal experiences and best practice sharing, on subjects including women’s health in the workplace; employment law; burnout and building your authentic brand.
Hosted by Law.com International news editor Rose Walker, the conference provided an inspiring space for women at all levels of in-house and private practice to learn from each other via crucial conversations. We look forward to welcoming you back next year.