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Legal showdowns: eight bitter wealth and fund feuds

Lawyers are the only consistent winner when financial services firms take to the High Court to settle their grievances.

Dauriac v Caudwell 

A bitter long-running legal battle between Signia co-founder Nathalie Dauriac and Phones 4U founder John Caudwell closed this week with both litigants now waiting on a judge's decision due within the next three months.

Both sides lobbed some explosive and damaging accusations from the witness stand. 

The business has accused Dauriac of reporting more than £33,000 in personal expenses as business costs before she left the firm, which the two launched in 2009.

Dauriac (pictured) denies the allegation and counter-claimed that she was forced out of the company after having £10 million of equity in the business expropriated. 

During the case, Dauriac alleged that Caudwell had attempted to coerce her into signing her away her right to have children. Caudwell countered that Dauriac had overseen a ‘reign of terror’ and was ‘an amazing liar’.

'Dauriac is the most amazing liar I’ve ever met in my life ... She’s Machiavellian and the vast majority of everything she says is a complete fabrication,’ he added, in case there was any doubt about how thoroughly their relationship had broken down.

While the trial was unusual for the viciousness of the testimony, it was far from the only high profile financial services court battle in recent years: read on for more

Dauriac v Caudwell 

A bitter long-running legal battle between Signia co-founder Nathalie Dauriac and Phones 4U founder John Caudwell closed this week with both litigants now waiting on a judge's decision due within the next three months.

Both sides lobbed some explosive and damaging accusations from the witness stand. 

The business has accused Dauriac of reporting more than £33,000 in personal expenses as business costs before she left the firm, which the two launched in 2009.

Dauriac (pictured) denies the allegation and counter-claimed that she was forced out of the company after having £10 million of equity in the business expropriated. 

During the case, Dauriac alleged that Caudwell had attempted to coerce her into signing her away her right to have children. Caudwell countered that Dauriac had overseen a ‘reign of terror’ and was ‘an amazing liar’.

'Dauriac is the most amazing liar I’ve ever met in my life ... She’s Machiavellian and the vast majority of everything she says is a complete fabrication,’ he added, in case there was any doubt about how thoroughly their relationship had broken down.

While the trial was unusual for the viciousness of the testimony, it was far from the only high profile financial services court battle in recent years: read on for more

Coutts v Sir Keith Mills 

Following a high profile game of chicken, Coutts owners RBS settled with former client Sir Keith Mills after the Air Miles and Nectar Points tycoon sued the bank in 2012 over a misfiring bond investment.

The bank settled for an undisclosed sum, shortly before it was due to appear in the high court to defend a decision to take big bets with client money on bonds issued by US insurance giant AIG, which only avoided insolvency in 2008 thanks to a massive government bailout.

Sir Keith headed a pressure group for well-heeled investors seeking a reported £8 million in compensation over missed dividends as their cash was tied up in unsellable bonds.

The bank had previously paid £6 million in penalties ordered by the-then Financial Services Authority over unsuitable advice, but maintained it had correctly described the AIG securities as low risk. 

UBS v Vestra 

UBS successfully applied to the High Court for an injunction against Vestra after company founder David Scott led a walkout of more than 70 staff from the Swiss giant.

The two sides reached an out of court agreement in August 2008, committing the start-up to not taking any more employees from UBS’ London office for a period of 12 months.

UBS was at the time jealously guarding its client and staffing bank following the 80-strong exodus led by Michael Kerr-Dineen, which led to the foundation of Cheviot two years earlier.

Patrick Evershed v John Duffield 

While the bitter and acrimonious dispute between former New Star manager Patrick Evershed and company founder John Duffield was similarly settled out of court, that did not occur until a lot of long-running grievances received a very public airing.

Evershed said Duffield had ‘bullied’ his staff and described them as ‘criminals’ and ‘morons’, after suing for constructive dismissal from the investment house, following its fire sale to Henderson. 

‘I genuinely believe the much published demise of New Star was as a direct result of the founder, John Duffield’s bullying, his interference with the way in which the fund managers managed their funds and his refusal to take on board anyone’s advice,’ he said in court documents.   

While Duffield did not take the stand, in a statement issued after the case was settled for an undisclosed sum, he accused Evershed of abusing court privileges to make inflammatory claims.

‘I do not intend to comment further on these matters. I would, however, like to express my sympathy for the innocent people who were victims of Patrick’s claims,’ he wrote.

Brewin Dolphin v Charles Stanley 

Brewin Dolphin launched a 2014 High Court action against Charles Stanley and a six-strong team of former employees, recruited to open a Leicester office for Sir David Howard’s firm.

While the case was settled out of court 18 months later, documents filed in the interim revealed a wealth of detail about the web of stealthy negotiations which went into their hiring.     

Documents obtained by Wealth Manager alleged the team breached their contracts and conspired with Charles Stanley to cause losses to Brewin’s business ‘by unlawful means’.

In response, the staff members claimed they had become ‘seriously disillusioned’ with Brewin and that the company had ordered them to hand clients to other offices, tolerated conflicts of interest and subjected staff to an ‘exhausting’ suitability review.

The case was eventually settled for an undisclosed sum.

WH Ireland v Paul Compton 

WH Ireland parted company with former chief executive Paul Compton in late 2012 and within a few months the company reported he had sued for unfair dismissal.

His departure followed an FSA probe into insider dealing claims, which led to several years of intensive restructuring beneath his successor Richard Killingbeck.

The firm subsequently suspended its Cardiff head and saw a number of other departures as it mounted an investigation into the personal share trades conducted by its senior executives.

The business reached a settlement in October 2013.

Marathon Asset Management v Jeremy Hosking

Marathon Asset Management won a moral, if not financial, victory earlier this year after it bought a High Court case against its departed co-founder, accusing him of stealing commercial secrets.

While the court agreed with the company that Jeremy Hosking acted improperly, it reduced the sought after damages of £15 million to just £2.

Judge George Leggatt noted that Marathon's claim that 40,000 documents were downloaded gave a 'somewhat exaggerated impression, in so far as the material copied included Mr Bridgeman’s email account, which contained 37,296 individual items’.

The court noted that of all the files Bridgeman copied on the USB drives, only 52 of these were accessed by him. Of these, only 11 are said of have contained client information, seven of which were presentations made to clients.

The company had earlier won £1.38 million in damages from Hosking over claims he had breached 'contractual and fiduciary duties' by discussing his plans to leave with other employees.

Liontrust v Eoghan Flanagan 

The judge overseeing Eoghan Flanagan’s attempt to sue former employer Liontrust made clear he was unimpressed by either party, accusing the former of being ‘unreasonable’ and the latter of ‘dismissive arrogance’.

Having joined Liontrust in 2011 via its acquisition of Occam Asset Management Flanagan claimed as much as £10.4 million after it shuttered his fund in 2013, claiming his firing was ‘invalid’.

While the court ultimately ruled in his favour the victory was somewhat pyric, with the £214,000 he was awarded dwarfed by the £1.3 million the judge told him to pay to cover his own and 60% of Liontrust’s legal costs.

A series of Flanagan’s claims had earlier been thrown out and the level of compensation he sought described as ‘extravagant’ and ‘opportunistic’.

Presiding Justice Henderson added that both parties were at fault, however: ‘Whatever the defects of Mr Flanagan’s own claims and his conduct of the litigation, he was in my view badly treated by Liontrust once Liontrust had decided to part company with him, and his complaints of unlawful exclusion were brushed aside with dismissive arrogance,’ he said.

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