Jack Rivett acted for ENRC, instructed by Michael Roberts of Hogan Lovells International LLP

18th May 2022

Judgment in ENRC v. Dechert, Neil Gerrard and the SFO

Jack Rivett acted for ENRC, instructed by Michael Roberts of Hogan Lovells International LLP.

Background

On 16 May 2022, the Commercial Court (Mr Justice Waksman) handed down judgment in the claims brought by ENRC against Dechert and one of its former partners (Neil Gerrard) and against the Director of the Serious Fraud Office.

The trial was one of The Lawyer’s ‘Top 20 Cases of 2021’ and took place over 11 weeks between May and December 2021.

ENRC’s claims arose out of its internal investigation into certain of its operations in Kazakhstan and Africa. Between 2011 and 2013, ENRC retained the services of Dechert and its then-partner, Mr Gerrard, to lead that investigation.

The core allegation against Dechert and Mr Gerrard is that over the period of that retainer (and in one case beyond it) Mr Gerrard acted not merely negligently but deliberately or at least recklessly, without the authority of ENRC and plainly against its interests, including in relation to communications and meetings which he had with the SFO.

In addition, ENRC alleged that various representatives of the SFO (including its former director, Richard Alderman) were complicit with Mr Gerrard, in that, in relation to a number of communications and meetings which they had with him, they knew or were reckless as to the fact that Mr Gerrard was acting without authority and plainly against his client’s own interests. ENRC’s claims against the SFO were in relation to the tort of inducement to breach of contract on the part of Mr Gerrard and/or the tort of misfeasance in public office.

 

The Findings

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.

– Prior to the first of those occasions (in August 2011), Mr Gerrard engaged with Mr Alderman, the then Director of the SFO, about ENRC without authority, and (at the very least) alerted Mr Alderman to the forthcoming press article about ENRC.

– Mr Gerrard was in at least reckless breach of duty in respect of 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 a number of respects, including by giving wrong advice about (inter alia) 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 facilitated an interview between the SFO and ENRC’s disaffected Head of Compliance, Mr Cary Depel, and hid this from ENRC.

As against the SFO, the Judge found that:

– It was in serious breach of its own duties in relation to 15 contacts with Mr Gerrard, which included engaging with and taking information from Mr Gerrard which was plainly unauthorised and against his own client’s interests.

– Accordingly, subject to proof of causation and loss, the tort of inducement to breach of contract on the part of Mr Gerrard was established.

– Some, but not all, of the elements of misfeasance in public office were also established, but not sufficient to make out the tort itself.

– The SFO’s conduct amounted to “bad faith opportunism”.

 

Further trials in relation to causation and quantum will take place in due course

 

The link to the full judgment can be found here