Duffield 'regularly insulted' staff, claims former New Star fund manager

Patrick Evershed (pictured) has made a number of stinging allegations against John Duffield, saying he was ‘angry, antagonistic and unpleasant', in the first day of his case against his former New Star boss.

According to Evershed's lawyer, Daphne Romney, Duffield called staff 'morons' and 'criminals' before the firm's demise at the end of 2008, after it which it was acquired by Henderson.

Evershed, 70, now a fund manager at Hargreave Hale, is suing New Star on the grounds of 'bullying' and 'unfair dismissal', claiming his departure in September 2008 was the result of 'constructive dismissal'. The UK small cap specialist amended the initial claim under Whistleblowing legislation – which he won last year – meaning the damages he can potentially win are unlimited. 

At the employment tribunal case held at London's Kingsway this morning, Romney said Evershed described the working environment at New Star as 'unpleasant' as a result of the way Duffield dealt with his staff, whom he allegedly ‘regularly insulted’.

Romney also said that Evershed claimed Duffield – who founded New Star – used to ask staff whether they were ashamed of themselves if their funds were performing badly, and consistently undermined the confidence of fund managers in front of their colleagues.

Although this atmosphere was said to have existed for a number of years, Evershed alleges it intensified after Duffield pressured him to increase the size of his New Star Select Opportunities fund, which invested in small cap stocks.

Romney said this put an ‘impossible burden on the claimant to run the fund’, and that Evershed found it 'physically impossible' to deal with small cap stocks in this manner.

On another occasion, Romney said Evershed intervened in a discussion between Duffield and a property manager at the firm, Roger Dossett, as Evershed felt Duffield was ‘bullying’ Dossett. Evershed is said to have told Dossett not to allow himself to be bullied into purchasing property that he felt to be unsuitable as an investment.

The tribunal also heard that Evershed called the firm’s joint chief investment officer (CIO) Gregor Logan a ‘vile little runt’ after Logan allegedly told Evershed after the collapse of Lehman Brothers that he could not buy HBOS shares.

Romney said the argument began as Logan could not explain to Evershed why he could not buy HBOS shares.

Evershed was also not previously made aware of the moratorium on buying HBOS shares, and Romney said this was an example of his judgement being undermined by senior management at New Star.

Romney said Evershed believed it was the ideal time to buy banking stocks for the long term because the markets were rising rapidly and profit could have ensued following the purchase.