Addleshaws to share risk in oligarch showdown

Firm commits to multimillion-pound ’no win, no fee’ arrangement for billionaire Berezovsky

Mark Hastings
Mark Hastings

Addleshaw Goddard is to throw its financial weight behind the biggest litigation of 2011 after agreeing a conditional fee arrangement (CFA) with self-exiled Russian oligarch Boris Berezovsky.

The move marks a step change in how City firms approach alternative funding strategies in landmark trials and puts the firm at the forefront of developments in the area.

The CFA, or ’no win, no fee’ deal, agreed with ­Berezovsky means that if Addleshaws wins his $4bn (£2.5bn) claim against Roman Abramovich it will be in line to be awarded a success fee running into tens of millions of pounds. It is believed the firm has taken out legal expenses insurance to cover the risk of losing, in which case its fees would be left unpaid.

Addleshaws’ youngest-ever equity partner Mark Hastings is leading ­Berezovsky’s claim against Abramovich, while partner John Kelleher is leading his battle with the estate of his former business partner Arkady Patarkatsishvili.

Hastings said the firm was responding to client demand.

“The litigation landscape has changed dramatically in the UK,” he added. ­”Increasingly, our clients expect us to back our ­judgement and share in their risk. In doing so we’re actively demonstrating our commitment to them.”

Both trials have been scheduled to run in tandem for 10 weeks at the ­Commercial Court in ­October next year.

This comes after Mr ­Justice Coleman rejected Abramovich’s application to have the case thrown out (The Lawyer, 31 March). That three-week strike-out hearing, in which Skadden Arps Slate Meagher & Flom partner Paul Mitchard QC represented Abramovich, is thought to have earned Addleshaws £8m in fees, and with an appeal set to be heard in January costs are expected to escalate ­significantly.

Addleshaws has made no secret of its determination to push forward alternative funding methods, but until now the firm has appeared to be quite conservative.

However, the appetite from wealthier litigants for alternative funding arrangements is rising, providing more opportunities for investment.

One senior litigation ­partner commented: “The real significance is that Berezovsky isn’t a man who can’t afford to pay his legal bills. He doesn’t need a CFA; they were designed to help people who couldn’t afford access to justice. Addleshaws is moving into new territory here and taking a big risk.”