The Commercial Court (Waksman J) yesterday handed down judgment in the high-profile 11-week trial between ENRC, Dechert LLP, Mr Neil Gerrard, and the Serious Fraud Office. The trial (which was one of The Lawyer’s ‘Top 20 Cases of 2021’), took place over 47 days between May and September 2021, determined questions of liability in relation to ENRC’s claims against Dechert, Mr Gerrard and the SFO.
Over the period 2011-March 2013, ENRC retained the services of Dechert which acted principally through its then partner, Mr Neil Gerrard. The initial purpose of Dechert’s retainer was to lead an investigation into some of the activities of an ENRC subsidiary called SSGPO which operated in Kazakhstan. On 9 August 2011, there appeared an article in The Times which was highly damaging to ENRC and clearly based on leaked documents, some of which were privileged (“the August Article”). Very shortly after, on 10 August, the Chief Investigator of the SFO wrote to ENRC (“the SFO Letter”).
Following advice from Mr Gerrard, on 9 November 2011 ENRC wrote to the SFO to say that it wished to engage with it. As a result, the investigation work to be done by Dechert substantially increased. Over the period from October 2011 until 28 March 2013, there were 8 formal meetings between the SFO, representatives of ENRC and Mr Gerrard. In addition, there were 30 contacts, either at meetings or by telephone, between the SFO (mainly, but not exclusively, one or more of Mr Alderman, Mr Mark Thompson and Mr Dick Gould) on the one hand, and Mr Gerrard on the other. No representative of ENRC itself was present.
There were further damaging newspaper articles about ENRC and the involvement of the SFO, in December 2011 (“the December Article”) and in March 2013 (“the March 2013 Article”) both, again, based on confidential leaked information.
On 27 March 2013, ENRC terminated Dechert’s retainer. On 25 April, 2013, the SFO announced a criminal investigation into ENRC focusing on allegations of fraud, bribery and corruption in relation to its activities or those of its subsidiaries in Kazakhstan and Africa. In June 2013 a collection of papers relating to ENRC was sent anonymously to the SFO in a brown envelope (“the June 2013 Material). It contained confidential and in some cases privileged information. Some 9 years later, that criminal investigation is still ongoing without the announcement of the bringing (or not bringing) of any criminal charges.
As against Dechert and Mr Gerrard, the Judge found that:
- Mr Gerrard leaked ENRC’s privileged and confidential information to the press on three occasions (the August Article, the December Article, and the March 2013 Article).
- Mr Gerrard tipped off Mr Alderman, the Director of the SFO, that the August Article was forthcoming, in order to pique Mr Alderman’s interest.
- Mr Gerrard was in reckless breach of duty by having 22 unauthorised contacts with the SFO, in which he made statements which were plainly contrary to ENRC’s interests.
- Mr Gerrard was negligent (and for the most part reckless) in (inter alia) giving wrong advice about ENRC’s potential criminal liability and the risk of a raid by the SFO, unnecessarily expanding the investigation, and failing to protect ENRC’s privilege.
- Mr Gerrard had sent the June 2013 Material to the SFO.
- Mr Gerrard had facilitated an interview between the SFO, and ENRC’s disaffected Head of Compliance, Mr Cary Depel, and hid this from ENRC.
- ENRC has succeeded in establishing its case in breach of duty against Mr Gerrard and Dechert (subject to causation and loss, which will be addressed at a subsequent trial).
As against the SFO, the Judge found that:
- Mr Alderman, by receiving the tip-off about the August Article, acted in gross breach of duty.
- Senior SFO officers were in serious breach of duty in participating in 15 unauthorised contacts with Mr Gerrard, which included taking information from him which was plainly unauthorised and against ENRC’s interests. SFO officers Thompson and Gould lied to the Court in their evidence about these contacts.
- The SFO were motivated by bad faith opportunism.
- ENRC has succeeded in establishing the tort of inducement to breach contract against the SFO (subject to causation and loss, which will be addressed at a subsequent trial). ENRC has established some of the constituent elements of misfeasance in public, but not the SFO’s knowledge of the probability of loss to ENRC.
The link to the Judgment and executive summary can be found here.
Clare Montgomery QC led a team of counsel for ENRC which included Nathan Pillow QC, Tim Akkouh QC, Anna Boase QC, James MacDonald QC, Jack Rivett, Freddie Popplewell, Alyssa Stansbury, and Matthew Hoyle, instructed by Michael Roberts of Hogan Lovells International LLP.