The Solicitors Disciplinary Tribunal has fined Clifford Chance £50,000 and partner Alex Payanides another £50,000.
The firm and Panayides admitted that they entered into a Conditional Fee Arrangement unlawfully. They also admitted that they failed to disclose to a potential litigation funder of their client, Excalibur Ventures, that a document providing advice to Excalibur was drafted by one of its owners. And they admitted paying money held on behalf of litigation funders other than in accordance with the relevant funding agreements.
RollOnFriday broke the news last week that Panayides, a litigation and arbitration partner in the Magic Circle firm's London office, was due to appear before the SDT in connection with a catastrophic 2010 claim. Under lead partner Panayides, Clifford Chance agreed to act for Excalibur Ventures on a CFA, understood to be the firm's first (and now, surely, its last). A group of third party litigation funders gave Excalibur a £31.75 million war chest to pursue the matter to trial, over £14 million of which went to Clifford Chance in fees.
The High Court claim failed on every point. The High Court said Excalibur's case was "essentially speculative and opportunistic" and "based on no sound foundation in fact or law". The funders were ordered to pay the defendants' £20 million costs. They appealed and lost.
The courts were critical of Clifford Chance, citing the high success fee uplift (140%), and Panayides' "aggressive and unacceptable correspondence". Clifford Chance was sued for professional negligence by the funders in 2014, who blamed Panayides for over-stating the claim's chances of success. The firm settled for an undisclosed amount.
And now CC is the latest City firm to suffer from the regulator's new, bolder stance on fines. In April three Clyde & Co partners were ordered to pay £10,000 each and the firm was also fined £50,000, then a record amount from the SDT. But it was broken weeks later in July when the SDT fined White & Case £250,000 and one of its partners £50,000 for breaching conflict of interest rules. And then in November Locke Lord was whacked with a £500,000 penalty.
A Clifford Chance spokesman said, "We accept the SDT's findings that some aspects of our conduct in this matter did not meet these high standards. The issues referred to the SDT were not prompted by any complaint but had all been identified and self-reported to the SRA by the firm following our own prompt and thorough internal review".
He said, "We are pleased to note that the honesty and integrity of all parties is nowhere in question and that none of the original judicial criticism, which prompted the SRA investigation, is reflected in the SRA's findings".
Tip Off ROF
The firm and Panayides admitted that they entered into a Conditional Fee Arrangement unlawfully. They also admitted that they failed to disclose to a potential litigation funder of their client, Excalibur Ventures, that a document providing advice to Excalibur was drafted by one of its owners. And they admitted paying money held on behalf of litigation funders other than in accordance with the relevant funding agreements.
RollOnFriday broke the news last week that Panayides, a litigation and arbitration partner in the Magic Circle firm's London office, was due to appear before the SDT in connection with a catastrophic 2010 claim. Under lead partner Panayides, Clifford Chance agreed to act for Excalibur Ventures on a CFA, understood to be the firm's first (and now, surely, its last). A group of third party litigation funders gave Excalibur a £31.75 million war chest to pursue the matter to trial, over £14 million of which went to Clifford Chance in fees.
The High Court claim failed on every point. The High Court said Excalibur's case was "essentially speculative and opportunistic" and "based on no sound foundation in fact or law". The funders were ordered to pay the defendants' £20 million costs. They appealed and lost.
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£50,000. That's, like, 30,000 milkshakes? |
The courts were critical of Clifford Chance, citing the high success fee uplift (140%), and Panayides' "aggressive and unacceptable correspondence". Clifford Chance was sued for professional negligence by the funders in 2014, who blamed Panayides for over-stating the claim's chances of success. The firm settled for an undisclosed amount.
And now CC is the latest City firm to suffer from the regulator's new, bolder stance on fines. In April three Clyde & Co partners were ordered to pay £10,000 each and the firm was also fined £50,000, then a record amount from the SDT. But it was broken weeks later in July when the SDT fined White & Case £250,000 and one of its partners £50,000 for breaching conflict of interest rules. And then in November Locke Lord was whacked with a £500,000 penalty.
A Clifford Chance spokesman said, "We accept the SDT's findings that some aspects of our conduct in this matter did not meet these high standards. The issues referred to the SDT were not prompted by any complaint but had all been identified and self-reported to the SRA by the firm following our own prompt and thorough internal review".
He said, "We are pleased to note that the honesty and integrity of all parties is nowhere in question and that none of the original judicial criticism, which prompted the SRA investigation, is reflected in the SRA's findings".
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