The High Court has handed victory to Faegre Baker Daniels by throwing out a claim brought by wealth manager Towry against seven of its former financial advisers for allegedly breaching covenants and soliciting its clients.
Faegre Baker Daniels employment partner Alex Denny instructed Littleton Chambers Chris Quinn to defend the high profile claim brought by Towry after it acquired smaller rival Edward Jones, where the seven were working, in 2009.
Following the acquisition the seven defendants left to join financial adviser Raymond James and a significant number of their clients followed.
Towry instructed Plexus Law partner Mark Ratcliff, who instructed Fountain Court’s Adam Tolley for the claimants. It alleged that it lost £6m as a result of the behaviour of the defendants.
Faegre Baker Daniels argued that the clients had moved of their own volition and, since there was no restriction in their contracts on ‘dealing’ with clients and no evidence of solicitation, there was no breach of the restrictive covenants.
Ruling in favour of the defendants and ordering costs of £1.2m in their favour Mr Justice Cox branded the claim “unsustainable” and “entirely without foundation”.
The judge stated: “Having regard to the whole of the evidence in this case, the allegations against Raymond James do not withstand scrutiny.
“There’s no evidence to support a suggestion that Raymond James deliberately set out to induce a breach of contract by any individual defendant. The suggestion that Raymond James either knew or was reckless as to whether any defendant was going to solicit any client is in my view unsustainable, as is the suggestion that they closed their eyes to the obvious.”