When it comes to defending against bribery allegations, companies usually provide documents to demonstrate compliance with the relative laws; conversely, an investigative arm of the government, such as the U.K. Serious Fraud Office (SFO), will provide their own documentary evidence to prove that a company engaged in bribery and/or corruption. Almost never, however, would you see a prestigious, worldwide law firm file documents in civil litigation alleging its (former) client engaged in bribery and corruption. Yet, that is precisely what happened in a recent filing in a civil action in Commercial Court in London.
The matter involves U.K.-based mining giant Eurasian Natural Resources Corp. (ENRC), its former counsel Dechert, and the SFO, which is probing ENRC for allegations of bribery and corruption. Dechert was instructed by the independent committee of the board of ENRC to conduct an internal investigation into allegations of corruption.
Some six years after Dechert's relationship with ENRC was terminated, ENRC has brought a negligence claim against the law firm. ENRC has denied the claims alleged by Dechert in the civil litigation, but says the SFO surreptitiously alerted a Dechert partner, Neil Gerrard, about the investigation. Gerrard, according to the ENRC allegation, used that information to perform an un-needed internal bribery investigation, bilking ENRC out of millions of Pounds Sterling. Dechert responded in this recent court filing with documents alleging that senior managers at ENRC paid bribes in Africa and flouted sanctions in other areas. It has also vehemently denied the allegations made by ENRC against Gerrard.
"We emphatically reject any suggestion of an improper relationship between Dechert/Neil Gerrard and the SFO or that there was any unauthorised disclosure of information to or form the SFO," a Dechert spokesperson said. "The work we did during our investigation was with the authority and knowledge of the members of the independent committee of the board which was instructing us at the time."
In addition to this fight between ENRC and its former counsel, the company has gone on the attack against the SFO, bringing legal proceedings against the agency for the alleged information leak; it also claims the SFO failed to properly investigate a whistleblower’s letter alerting it to the issue.
It is either one of the greatest bribery and corruption investigative flubs of all time or just a company attacking a regulator with everything it can and seeing what, if anything, will stick. But when a law firm is sued and must defend itself with the results of an internal investigation into a former client, the outcome is never good.