Litigation: fee deal was unlawful
A solicitor involved in the 2011 litigation between Russian oligarchs Boris Berezovsky and Roman Abramovich has been fined £50,000 by the Solicitors Disciplinary Tribunal (SDT) for entering into what was then an unlawful contingency fee agreement, under which he would have netted tens of millions of pounds had Mr Berezovsky succeeded.
Bizarrely, the decision anonymised the names of everyone mentioned except the solicitor concerned, Michael Lindley, even though a simple Internet search of his name reveals a wealth of detail on the wider context of the case.
Mr Lindley, then a partner – now a consultant – at central London law firm Streathers, had acted for the late Mr Berezovsky since 2004 and, though a private client lawyer, was one of a small group who helped manage the massive Commercial Court litigation against Mr Abramovich, in which Mr Berezovksy claimed more than $5.6bn.
As well as paying the firm in the usual way, Mr Lindley entered into an agreement with Mr Berezovsky that would have seen him receive 1% of any winnings. The solicitor’s wife, a business adviser to Mr Berezovsky since the 1990s, had the same agreement.
In finding for Mr Abramovich, Mrs Justice (now Lady Justice) Gloster criticised Mr Berezovsky for denying that any of his witnesses stood to gain financially.
She also said that in evidence he gave about a meeting he attended during preparations for the litigation, Mr Lindley’s assertion that he had not “mentally made the connection between the payment and his evidence [was] an astounding answer”.
Mr Lindley admitted all four allegations before the tribunal: entering into an unlawful contingency fee agreement, failing to disclose his interest in the outcome of the litigation when making a witness statement, and permitting misleading statements to made in court by failing to disclose the existence of the agreements Mr Beresovsky had with his wife and another person in the case.
The tribunal found that Mr Lindley had “strayed outside his area of expertise” by involving himself in ‘managing’ the litigation.
However, it accepted that his motive for entering the 1% agreement was “to keep his client happy”, and that his “misconduct had arisen due to unfortunate mistakes about the nature of the agreement and its relevance; there had been no planned misconduct”.
He was, the tribunal continued, “an experienced solicitor in the field of non-contentious work, but was inexperienced in litigation. The harm which had been caused was to the reputation of the profession; there was no harm to the respondent’s client or others”.
Further, “there was no suggestion of dishonesty or that any criminal offence had been committed”. The tribunal accepted “the respondent did not know that the conduct in issue was in material breach of his professional obligations; however, he ought to have realised this”.
It acknowledged that he “had notified the [Solicitors Regulation Authority] of the matters in issue and had a previously unblemished career.
However, the tribunal said that “overall, the respondent’s misconduct should be viewed as serious”. It had “briefly considered whether a reprimand was appropriate, but the breaches were far from minor matters”, and while the case was “not one in which a striking off order would be proportionate”, it had “considered seriously” a suspension.
But “there was no need to protect the public from the respondent and the protection of the reputation of the profession did not require suspension; the respondent had demonstrated insight and although his mistakes were serious, they were not deliberate”.
Considering “the seriousness of the misconduct” and that it had “occurred over a two-year period”, the tribunal fined Mr Lindley £50,000, plus £20,000 costs.
The tribunal directed that although the judgment should be published as usual, including the name of the respondent, the substantive hearing of the case should take place in private, for reasons outlined in a memorandum of an earlier hearing. However, this memorandum was “a private document and not for publication”.
Earlier this month, the High Court found an SDT retrospective anonymity ruling flouted the principle of open justice.
Leave a Comment