Compass calls in Freshfields for US legal battles

Freshfields Bruckhaus Deringer client Compass has one less legal battle to worry about after US lawsuits against the caterer settled for £40m last week.

The suits were brought by rival caterers, Monaco-based ES-KO and Swiss company Supreme Food Services. They had claimed up to £600m in damages from business lost due to alleged insider information on how the UN awarded contracts for food distribution in Liberia.

Compass did not admit legal liability, but following the settlement on 13 October chief executive Richard Cousins said that it was “in the best interests” of the company to avoid the “costs associated with prolonged litigation”.

However, Compass still faces a separate United Nations internal inquiry and a US federal investigation into alleged corruption at a Compass subsidiary.

All three matters surround Eurest Support Services (ESS), the Compass business that provides food in extreme conditions.

Freshfields is involved in all aspects of ESS’ defence, fielding a team headed by London-based litigation partner Paul Lomas. Compass is a longstanding client of the magic circle firm.

The firm was brought in, alongside Ernst & Young, to undertake an internal investigation of the company when problems first surfaced in October 2005. Since then, several ESS employees were sacked, including chief executive Peter Harris.

Lomas said Freshfields instructed Paul Weiss Rifkind Wharton & Garrison for US civil litigation aspects of the ES-KO and Supreme lawsuits brought in New York, although Freshfields lawyers were on the ground.

Manhattan antitrust specialist Constantine Cannon acted for Supreme, whilst ES-KO instructed Boston-based Brown Rudnick Berlack Israels.

In October 2005, the UN announced it would investigate claims that ESS had obtained information about contracts, and Compass’ services to the UN were subsequently suspended. The decision to use ESS is not within the internal investigation’s remit, although ESS’ behaviour will be discussed.

A US federal investigation is also pending, although there have been no significant developments over the last six months.