The High Court demanded compensation from the SFO and Dechert for the ERG for their misconduct

The UK High Court decided that the UK Serious Fraud Office (SFO) and law firm Dechert should compensate Eurasian Resources Group (ENG) for the losses incurred for their illegal actions. This is a major win for Kazakh mining company ENG. The compensation could amount to significant amounts, reaching millions of pounds, PortugalNews reports.

The court’s decision concluded that the SFO was unlawful in launching a criminal investigation into the ERG in 2013. It was influenced by unauthorized information that was provided by former Dechert partner Neil Gerard.

The ERG investigation, which ended in August 2023 due to insufficient evidence, resulted in unnecessary labor and financial costs for the company. The ruling by Justice David Waxman at the high court highlighted the misuse of lawyers as confidential informants for law enforcement. The investigation also revealed related financial implications for the organizations involved.

The High Court ruling determined that the SFO and law firm Dechert must pay for their actions – literally. Owners ERG initially demanded compensation in excess of £21 million. Dechert has already paid out around £9 million, with only around £12 million of the claim outstanding. The court found that the SFO was liable for a quarter of the assessed damages. Dechert and Neil Gerrard will be jointly responsible for the remaining amount. The final amount to be paid by the SFO, Dechert and Neil Gerrard will be determined at a hearing in early 2024.

In addition to damages, ERG is seeking up to $1 billion in damages for future losses. They relate to a criminal investigation, which will be evaluated in separate court hearings.

The SFO, under new director Nick Ephgrave and law firm Dechert, is currently reviewing the High Court decision and preparing to address the issues of harm. This case serves as a clear warning to law enforcement agencies against using lawyers as informants. Additionally, emphasis has also been placed on the potential financial and reputational risks associated with it.

Furthermore, this case draws attention to the important aspect of compliance with rules and regulations in the field of legal ethics. Abuse of attorney-client privilege and the use of lawyers as covert law enforcement informants are not only contested in court, but also raise serious questions about compliance with professional and legal standards.

ERG emphasizes company compensation, and thus tries to protect its reputation and financial interests. This case can serve as an important precedent and strengthen clients’ assurances in their relationships with law firms and law enforcement agencies.

Ultimately, the decision in this ERG-SFO case will have far-reaching consequences. It has the potential to change standards and practices in the areas of legal compliance, confidentiality and collaboration with lawyers in the context of criminal investigations.