WARRING FIRMS Deacons and White & Case each claimed vindication after a long-awaited verdict on partner poaching claims against the US giant was delivered by a Hong Kong judge last week.
The Hong Kong High Court determined that Deacons was entitled to pursue damages against the firm it nearly merged with in 1999, finding that White & Case encouraged two high profile partners to jump ship. But while Deacons will now seek “substantial damages and legal costs” at a further hearing, White & Case can continue to act for a number of blue chip clients who made the simultaneous switch.
Judge David Gill said the two lawyers in question, Mark Fairburn and Edward Cairns, failed to comply with obligations incumbent upon them as partners of Deacons and were in fact encouraged to do so by the co-defendant firm.
Describing White & Case’s conduct as “below the belt”, Gill also concluded that the pair, with further encouragement from their current employer, attempted to persuade Deacons clients, including KPMG and Standard Chartered, to join them.
In Gill’s words, the actions of White & Case amounted to a “cynical disregard for the rights of Deacons, putting profit before honour”.
“It is below the belt,” the judgement added.
The court, however, rejected a number of claims from Deacons, most significantly refusing to grant an injunction preventing White & Case from acting on behalf of the subject clients. Gill reasoned that, keeping in mind the duration of proceedings, granting the application would unfairly intrude upon the clients’ interests.
He also dispensed with any suggestion that White & Case had breached a “non-solicitation” clause signed by the firms during merger discussions.
“I cannot go so far as to find that it was vindictive, or malicious ... and I am not, objectively, filled with a sense of outrage,” he said, before adding: “There was ... no solicitation by White & Case ... and thus no breach of the non-solicitation restrictions.”
Despite not recording a perfect sweep of all its claims before the court, Deacons was nevertheless delighted with the outcome.
“The wrongs committed by White & Case and two former partners of our firm ... were extremely serious and our decision to commence proceedings has been vindicated by today’s judgement,” managing partner Lindsay Esler said. “For a large law firm, in the full knowledge of its senior management, to have acted in such a way is beyond comprehension. We felt it important to make the point its behaviour was wrong.”
Adversary White & Case also described the judgement as vindicating, and predicted ultimate vindication would be achieved upon appeal, which it plans to “vigorously pursue”.
“White & Case is gratified that the judgement handed down Friday by Judge Gill in the Deacons dispute vindicates our position in key areas, especially the rights of clients to select the law firms of their choice,” a statement issued by the firm read.