6 October 2010 | By Katy Dowell
The legal battle between Tullett Prebon and arch rival BGC brokers captivated the City with its hostility and shone a spotlight on the highly competitive labour market that exists for financial institutions.
The fight will reach a new level in December, when it is scheduled to come before the Court of Appeal.
The case has its origins in a bitter fallout between Tullett boss Terry Smith and his former number two Anthony Verrier.
Verrier quit to join rival BGC partners in 2009, but before doing so was alleged to have attempted to entice senior Tullett staff away from the company in a deliberate attempt to ruin the business.
Tullett responded with venom, instructing Rosenblatt Solicitors partner Clive Hyer to lead the fight back through the courts.
Hyer brought in high-flying silk Jeffery Onions QC of One Essex Court to lead the advocacy in Tullett’s claims for damages for the alleged poaching raid, which, it claimed, involved BGC approaching more than 50 of its staff.
In the end 10 brokers, all named defendants in the action, moved to BGC but were prohibited from trading prior to the High Court case because of a separate injunction the claimants had brought against them.
BGC appointed McDermott Will & Emery to lead its defence with Essex Court Chambers’ Andrew Hochhauser QC representing the company in court. The case was set down for a hearing before Mr Justice Jack that spanned five months beginning in October last year.
In March, Jack J ruled in favour of Tullett, ordering the 10 brokers who were poached by BGC to repay their signing and bonus payments to Onions’ client (18 March 2010). He also found that two of BGC’s top executives - president Shaun Lynn and executive managing director Verrier - conspired to induce a breach of contract among Tullett’s brokers.
Damages were set to be decided at a later date, but that has now been put on hold pending the outcome of the appeal, which Jack J granted in May.
At a hearing in May, Onions went for the jugular informing the court that his client would apply for indemnity costs to reflect “the seriousness of the defendant’s conduct” because the defence was “revealed to have been based on lies”.
Tullett demanded that BGC pay at least £2.3m of the legal costs it had incurred up until the case began in October. Hochhauser rejected this on the basis that Tullett had not won all of its claims at the first instance.
That fight will have to wait for another day because both sides have brushed themselves down and are gearing up for another showdown, this time focusing on the more technical employment issues in dispute.
Hyer has dropped Onions from the counsel line up and opted instead to instruct his High Court junior Dan Oukerk, who took silk in March. Hyer said the appeal fitted “more closely with Dan’s expertise”. Oudkerk is a well regarded employment silk who led much of the original case in the High Court.
Meanwhile, Verrier, who was previously represented by Russell Jones & Walker partner John Marshall, and the nine brokers, who were represented by Berwin Leighton Paisner in the High Court, have instead opted to consolidate their legal teams with lead defendant BGC. The entire appeal is now being coordinated by McDermott partner Katie Clark, who keeps Hochhauser as counsel.
While the outcome of the case is unlikely to set new precedent, it will be a riveting battle with the City closely scrutinising the outcome.