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Fraud

PCB Litigation has been ranked by the main legal directories in the top tier of firms in England in civil fraud, being described as “the pre-eminent boutique” in London’s civil fraud arena, who assist “high-end clients including banks and corporations in getting to the bottom of sophisticated fraud scenarios”. We act for both claimants and defendants. If you are looking to bring claims alleging serious wrongdoing, or if you are faced with claims where serious wrongdoing is being alleged, then we have the skills to help you, backed up by decades of experience in winning such cases.

FOR CLAIMANTS

In addition to extensive interim relief that we obtain for claimants, we have expertise in building fraud cases. In one case we obtained a leading judgment on pursuing a fraud case built on inferences. In other cases, we have through use of investigators, computer forensic specialists and disclosure orders against defendants and third parties, been able to turn difficult cases into winning cases.

FOR DEFENDANTS

We have acted for numerous defendants faced with allegations of fraud, and who are often also faced with freezing orders and other interim relief. Those defendants may have been put “on the back foot” early in the process, and often feel that the court is against them in making various, sometimes draconian, orders. We look at how to put the client “on the front foot”. Thus, examples of what we have done include:

  • Discharging of freezing orders and obtaining orders for indemnity costs and damages caused by the orders.

  • Obtaining substantial orders for security in respect of possible damage caused by freezing orders, as well as for costs.

  • Successfully challenging jurisdiction.

  • Attacking the propriety of investigations that have been undertaken against the defendant and in consequence obtaining a ground-breaking order for disclosure of investigators’ reports on the basis that privilege in them had been lost due to impropriety in the investigations.

  • Successfully defending a committal application brought against a defendant alleged to have been in breach of obligations to disclose assets.

  • Obtaining the dismissal or discontinuance of substantial fraud claims brought against our clients.

Selected Case Summaries

PCB acted for the defendant in this long running mutli-million dollar dispute arising out of two actions. The Court had to determine whether liabilities owed to Mr Al Refai from the first action should be set off against liabilities for costs he owed to the bank in the second action or against a liability to pay a Bahraini judgment debt to the bank. The bank sought the former, whilst Mr Al Refai sought the latter. It was common ground that this was a matter for the Court’s discretion, and that discretion was ultimately exercised in favour of Mr Al Refai given that it was important to him to have the Bahraini judgment debt discharged, as that debt could be used to have him imprisoned in Kuwait.

PCB acted for the claimant in respect of US$17m invested with the defendant, alleging fraudulent misrepresentation and breach of fiduciary duty. The defendant disputed jurisdiction on the grounds that he was not domiciled in England and that the proceedings should be stayed as Russia or Belarus was clearly a more appropriate forum than England. PCB successfully resisted the jurisdictional challenge, with the Court finding that the claimant had the better of the argument on domicile, and even if the issue of appropriate forum arose, neither Russia nor Belarus were a more appropriate forum.

PCB acted for a respondent to a claim brought by liquidators of a Greek telecommunications company, who alleged that the respondent (one of the world’s largest private equity funds) had sought to put approximately €1bn of assets beyond the reach of creditors and had traded fraudulently. The claims were brought pursuant to sections 213 and 423 of the Insolvency Act 1986. At the same time parallel proceedings were being pursued in New York against related parties. The liquidators sought a stay of the English proceedings until after the final outcome of the New York proceedings. PCB successfully opposed the stay application.

PCB acted for the claimant bank seeking to enforce Russian judgments in the sum of approximately £150m against the defendant. The bank applied for summary judgment and in response the defendant sought to allege that the Russian judgments had been procured by fraud and/or should not be enforced on grounds of public policy. Following lengthy factual and expert evidence, PCB were able to persuade the Court that there was the defence was contrived and had no real prospect of success. Summary judgment was granted in favour of PCB’s client.

PCB acted for defendants to a claim brought by a company that owned a golf club in respect of the sale by one of PCB’s clients as mortgagee in possession of the land. It was alleged that the sale had taken place at an undervalue, it being claimed the land was worth nearly £20m more than the sale price. The claimant sought to amend to add claims in conspiracy. PCB successfully resisted the amendment on the grounds that it was too late as it would result in the adjournment of the trial.

PCB acted for the claimant bank. The bank alleged unlawful means conspiracy to defraud the bank by the diversion of assets to companies controlled by the defendant. The bank sought to amend its claim to allege that it had been induced by fraudulent misrepresentations to make loans to companies of US$150m. The defendant resisted the amendment and sought to strike out the claim or have it summarily dismissed, on the basis that the primary facts alleged by the bank were insufficient. PCB successfully resisted the defendant’s application and was granted permission to amend its claim, on the basis that the claim in fraud could be pleaded on the basis of inferences to be drawn from the primary facts.

PCB acted for the claimant bank in bringing claims to enforce Russian judgments for around US$40m in England. The defendant raised a defence that the Russian judgments were procured by fraud and/or that the English court should decline to enforce the judgments on the basis of public policy. In particular, he alleged that the judgment had been granted as part of a “corporate raid” in order to acquire his business and that as the claimant was a state-owned bank, it was impossible for him to get justice from the Russian court. PCB was able to persuade the English Court that the defence was without substance and summary judgment was granted in favour of the bank.

PCB acted for the claimant bank in relation to a substantial claim in deceit and breach of contract, which included worldwide freezing order relief in the sum of US$200m and ancillary freezing orders in the BVI and Cayman. In England, the case reached the Supreme Court on issues relating to piercing the corporate veil, choice of law and appropriate forum. In the English Court of Appeal there was additionally the issue of whether the claimant suffered loss caused by the alleged deceit given that it had entered into a participation agreement with another bank that passed on all of the risk. In the BVI, issues arose as to whether it was appropriate for the BVI Court to grant relief that overlapped with the English freezing order. In the Cayman Court of Appeal, the issue was whether the Cayman Court could grant freezing order relief in support of the English proceedings. PCB established that the Cayman Courts could indeed grant such relief.

PCB acted for the claimants in obtaining permission to serve the proceedings alleging deceit, conspiracy and dishonest assistance on the defendant out of the jurisdiction. The defendant challenged the jurisdiction, alleging that he was not properly served, that England was not the appropriate forum and that there was no reasonable prospect of the claim succeeding. All of those arguments were rejected by the High Court. On appeal, the Court of Appeal rejected the forum argument but set aside service on the basis that the defendant had not been properly served and it was not appropriate for service to be validated retrospectively. PCB persuaded the Supreme Court that the case raised issues of general public importance such that permission to appeal should be granted, before ultimately winning the appeal. This is now the leading case on alternative service out of the jurisdiction.

PCB acted for the primary defendant to a US$1bn claim. The claimants obtained permission to serve him out of the jurisdiction, a worldwide freezing order in the sum of £100m and other injunctive relief to stop him publishing allegations against claimants of serious wrongdoing, including the breach of various banking regulations. In obtaining such relief, the claimants had relied upon a very large volume of emails that had been hacked from the defendant’s email account and accounts of friends and family. The claimants however claimed not to have been involved in the hacking, saying that the material had been provided to them anonymously in the post. Following cross-examination of the claimants’ witnesses, the court concluded that they had given dishonest evidence about the hacked material and also breached undertakings regarding the preservation of related evidence. As a consequence the permission to serve PCB’s client out of the jurisdiction was set aside and the freezing order and other injunctive relief was discharged. An inquiry was ordered in respect of damage caused by the freezing order.

PCB acted for the claimants in a US$500m claim alleging deceit, conspiracy and breach of fiduciary duty against the former directors and shareholders of a gold mining company. Freezing orders were obtained at the outset in England, BVI, Jersey and Guernsey and Search Orders were granted in respect of 3 premises. There followed extensive interim applications, including in respect of the adequacy of the defendants’ asset disclosure. Despite the defendants spending over £1m in legal fees on the asset disclosure exercise, the Court was persuaded by PCB that there remained questions to be asked and cross-examination of two of the defendants was the appropriate course.

PCB acted for the parents of the main defendant, who were resident in Italy. The English court had already granted a freezing order under s25 of the Civil Jurisdiction and Judgments Act 1982 in support of substantive proceedings taking place against the main defendant for investment fraud. The claimants then sought to extend that freezing order against the parents on the basis that they had assisted in the concealment of substantial assets. PCB however applied successfully to set aside the freezing order against the parents on the basis that as they were neither resident in England nor had any assets in England, it was not appropriate for such an order to be made.

PCB acted for a former senior employee of a state-owned aluminium company. This was one of a series of claims that the company made against former senior officers and employees alleging corruption. All of the other claims led to large judgments or settlements. PCB’s client was faced with a multi-million dollar claim for accepting alleged secret commissions and other alleged breaches of fiduciary duty. Following trial, the court held that PCB’s client had acted honestly and had not breached his duties. He received payments to which he was entitled and with the company’s knowledge. The claims against him were therefore dismissed.

PCB acted for the respondent to a worldwide freezing order and a search order. The claimant had in its investigations obtained evidence through the use of pre-text calls to a Swiss bank. PCB led evidence that such conduct was under Swiss law prima facie criminal. As a consequence, PCB submitted, and the court accepted, that there could be no legal privilege in the reports of the investigators. Those reports were therefore ordered to be disclosed. PCB also submitted that the claimant’s conduct should lead to the discharge of the orders they had obtained, which led to agreement being reached in relation to more limited relief going forward.

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