The high-profile City litigation firm, Quinn Emanuel, has faced a costs penalty for its lack of engagement with allegations concerning the authenticity of a significant document deemed potentially forged. The controversy revolves around a report produced during an arbitration dispute involving Russian oligarchs, sparking questions about procedural diligence and responsibility.
Mr Justice Calver acknowledged the reputable status of Quinn Emanuel, recognising that the firm acted out of concern for client privacy. However, its approach increased the costs involved in handling a Norwich Pharmacal order application against it. Earlier, Calver J had mandated that the law firm identify the business intelligence agency responsible for supplying the contentious report, used as evidence in a section 68 Arbitration Act 1996 claim. This claim ultimately sought an additional $300 million in favour of the firm’s client, but was discontinued.
Evidence suggested the report was indeed a forgery, yet Justice Calver withheld from concluding that Quinn Emanuel knowingly facilitated potential wrongdoing when the initial proceedings commenced. The firm was criticised for not conducting immediate inquiries into the report’s authenticity once suspicions were raised by the opposition.
In his recent cost ruling, Calver J highlighted the common practice in Norwich Pharmacal cases, where the claimant typically covers the respondent’s costs. Quinn Emanuel advocated for this standard approach, but the claimants counter-argued, seeking 70% of their costs from the firm due to its adversarial handling of the case.
The claimants accused Quinn Emanuel of treating the proceedings as aggressive litigation rather than approaching it neutrally. Despite this, Justice Calver did not find their adversarial conduct sufficient to strip them of cost protection typically afforded to a third party in such cases.
Although Quinn Emanuel’s resistance to disclose the report’s source was, in principle, deemed reasonable, engaging with fraud allegations might have prompted early acceptance of the report’s forgery. This oversight compelled the claimants to extensively address the issue, unnecessarily broadening the application’s scope and costs.
Justice Calver noted that Ted Greeno, the firm’s London co-managing partner, genuinely yet mistakenly perceived the information as privileged, necessitating a court’s intervention for disclosure. He also acknowledged the firm’s inability to recoup its costs from the source of the forgery, unlike the claimants. Therefore, he deemed it just for the claimants not to bear a portion of Quinn Emanuel’s costs incurred by its oversight, setting the firm’s responsibility at 30%.
This ruling underscores the importance of due diligence and immediate inquiry in legal practice, illustrating the financial and reputational repercussions of failing to adequately engage with critical allegations. Quinn Emanuel’s experience serves as a cautionary tale for legal entities navigating the complexities of client confidentiality and procedural obligations.
