Tuesday, February 4, 2014

When Conflicts Have Consequences

As reported this past weekend in the Financial Times and detailed in The Lawyer: "White & Case debarred over conflicts in $2bn oligarch battle" --
  • "White & Case has been disqualified from acting on one of its flagship cases, the $2bn oligarch litigation between Ukranian industrialist Victor Pinchuk and his rivals Gennady Bogoliubov and Igor Kolomoisky, after a conflict of interest."
  • "Today’s 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 involing 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."
  • "In his ruling today Mr Justice Field found that White & Case was in possession of confidential information that was or might be relevant to the litigation, and that Pinchuk’s interests were or might be adverse to the interests of the claimants."
  • "He further held that White & Case could not show that there was no real risk of the disclosure of the claimants’ confidential information to Pinchuk."
  • "In a statement White & Case said: 'White & Case has an exemplary record in detecting and avoiding conflicts of interest and in safeguarding our clients' confidential information. We have robust policies and procedures that are underpinned by strong systems and regular training and support for our partners, lawyers and staff... The issues raised in the judgment are very specific to the facts of this particular case and to the relationship between the parties involved, but we are considering whether any improvements to our policies and procedures can or should be made.'"

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