Ruling grants release for Deacons partners

White & Case wins key case on restrictive covenant; Deacons set to appeal

The star insolvency team that White & Case poached from Hong Kong rival Deacons last summer has emerged victorious from an arbitration against their former partners and has finally started work at the US firm.

However, in a move viewed as overkill by the market, Deacons has now lodged an appeal before the Hong Kong high court to get the arbitrator's ruling overturned. The firm currently operates a five-year restrictive covenant for partners, preventing them working for rivals for the duration of that term.

The arbitration was between insolvency lawyers Mark Fairburn and Edward Cairns and their former firm. As revealed in The Lawyer (8 July 2002), Fairburn, Cairns and two other Deacons partners were prevented from joining White & Case when Deacons brought a suit against the US firm in June last year.

The case alleged that White & Case's approach to the partners breached a non-solicitation agreement that was part of merger talks between the two firms in 1999.

In September last year, Deacons refocused its wrath on the partners themselves. The firm filed an amended statement of claim in the high court, adding Fairburn and Cairns as defendants.

In the meantime, the two partners, represented in Hong Kong by Herbert Smith, went to arbitration with Deacons over the restrictive covenant. Foll owing a decision from the arbitrator which meant that the lawyers could start work at White & Case, Deacons is now appealing. One source told The Lawyer that some of the firm's clients feel the pair are being persecuted unfairly.

Throughout this period, Fairburn, Cairns and the two other partners were forced to continue working at Deacons. The two partners not involved in the arbitration finally joined White & Case late last autumn; Fairburn and Cairns started early this year. The new team, which was recruited as part of White & Case's plan to build a global restructuring capacity, attended the firm's practice meeting earlier this year.

The high court case against White & Case and Fairburn and Cairns has yet to be resolved.

Deacons was unavailable for comment at the time of going to press. White & Case refused to comment.