The High Court dismissed a long-running $86m loss of earnings claim by a former investment banker against his employer. The case was one of The Lawyer’s Top 20 cases of 2020.
In 2006-7, the Claimant, Mr Benyatov, was arrested, prosecuted and then convicted in Romania for commercial espionage and membership of an organised criminal group for obtaining confidential bids placed in relation to the privatisation of a Romanian electricity distribution company. He has a pending application to the European Court of Human Rights challenging (among other things) the fairness of that conviction.
In proceedings brought against his former employer, Mr Benyatov sought to recover the earnings he says he has lost as a result of his conviction. His claims that the Defendant bank had breached a duty to take care to ameliorate his position after he was arrested and for an injunction requiring the bank to appoint a prominent individual and to make representations to the Romanian authorities were struck out in January 2020 ( EWHC 85 (QB)).
At trial, he argued that there was an indemnity covering all losses arising as a result of work for an employer implied as a matter of law into all employment contracts, or implied as a matter of fact into his contract of employment. He also alleged that there was a duty of care to protect him from conviction in Romania.
The claim that all employment contracts contain an implied indemnity for all losses suffered by an employee regardless of an employer’s lack of fault was rejected on the basis that, on a proper analysis of the authorities and as a matter of principle, the implied indemnity does not extend to money not received, such as lost earnings, rather than money which an employee has had to pay out, such as expenses. To extend the indemnity to such losses would improperly cut across the law of negligence and statutory claims against employers.
The claims in negligence and that there was a term implied in fact failed on the facts. The Court found that none of the so-called “red flags” alleged to have alerted the defendant to the risk to Mr Benyatov (or which ought to have done) were proved, or were sufficient individually or cumulatively to lead to the imposition of duty of care or implied term alleged. The negligence claim was also time barred.
The judgment also considers the reliance that can be placed on foreign convictions in English civil proceedings.
Judgment on BAILIIhttps://www.bailii.org/ew/cases/EWHC/QB/2022/135.html