White & Case has been hit with a record fine of £250,000 by the Solicitors Regulation Authority (SRA) over a $2bn oligarch battle.
The firm has been fined for failing to identify a conflict of interest and for failing to protect the confidentiality of its clients in the $2bn oligarch litigation between Ukranian industrialist Victor Pinchuk and his rivals Gennady Bogoliubov and Igor Kolomoisky.
The Solicitors’ Disciplinary Tribunal (SDT) also ordered the partner on the case, David Goldberg, to pay a fine of £50,000.
The SRA’s decision read that the firm admitted it allowed work to be carried out for clients without necessary precaution to ensure no conflict or risk of conflict of interest existed between the interest of clients, in what amounted to a breach of a clause of the SRA’s code of conduct.
White & Case further admitted that it “acted recklessly” in allowing instructions to be accepted to undertake further work for clients without causing adequate steps to be taken to ensure the confidentiality of information provided to the firm by clients was protected.
In January 2014, White & Case was disqualified from acting on the flagship case after Mr Justice Field handed down his judgment granting a permanent injunction debarring White & Case from acting for Pinchuk in the commercial court battle.
The disqualification centred on White & Case’s internal conflicts checking procedures, which were highlighted after it emerged that the firm had been advising Bogoliubov and Kolomoisky in the US on a corporate restructuring and potential IOPO and Pinchuk in London on the dispute involving the former pair.
The court heard that White & Case decided internally there was no conflict of interest between its acting for the claimants and also acting for Pinchuk and did not establish any information barriers separating the teams for two years.
Enyo Law successfully acted for the claimants, a group of companies whose majority shareholders are Bogoliubov and Kolomoisky, while legacy Olswang partner Richard Bamforth instructed Bankim Thanki QC and Tamara Oppenheimer of Fountain Court Chambers to represent White & Case.
Goldberg admitted that he acted in such a way that there was a risk of conflict of interest between clients and that he had provided confidential information concerning work undertaken on behalf of a client in one matter to a partner in the firm involved in acting on a matter, thereby giving rise to a conflict of interest.
The SRA did not accuse the firm of Mr Goldberg of acting dishonestly or for acting without integrity.
A spokesperson for White & Case said: “While it would not be appropriate to comment until the Solicitors Disciplinary Tribunal has published its judgment, we have been cooperating fully with the SRA and accept the orders which will be made by the SDT. We are committed to upholding the legal industry’s highest standards at all times, in all of the jurisdictions where we operate.”
The fine imposed of White & Case supersedes that imposed by the regulatory watchdog on Clyde & Co in April this year, when the firm was hit with a £50,00 fine for breaching accounting and money laundering rules.
As part of the fine, three Clyde & Co partners – Christopher Duffy, Simon Gamblin and Nick Purnell – each received a £10,000 fine.
The partners admitted breaching SRA rules when they allowed a client bank account to be used as a banking facility. The tribunal also found that the partners failed to act in accordance with their obligations under the Money Laundering Regulations 2007.