Oral evidence in a mammoth claim against the Serious Fraud Office, Dechert and City partner Neil Gerrard began in the Rolls Building this morning.

Kazakh-based mining company Eurasian Natural Resources Corporation (ENRC) has brought a negligence claim in relation to ENRC’s retainer of Dechert and Gerrard – the law firm's former head of white-collar crime – between 2011 and 2013. Gerrard was retained by ENRC to conduct an internal investigation into allegations of wrongdoing concerning a subsidiary. The SFO is accused of mishandling the subsequent criminal investigation.

For Dechert, Andrew Onslow QC told the commercial court that several law firms – including Addleshaw Goddard, Jones Day and Herbert Smith – had been advising ENRC, as opposed to Dechert alone. He added that Dechert had been 'closely supervised and overseen' during its investigation, including by Jones Day. 

Business and Property Court, Rolls Building, London

Commercial court hears that ENRC had been warned of SFO involvement before Dechert was instructed

Source: Michael Cross

Onslow also said there was a ‘serious and recognised risk’ that the SFO could investigate ENRC following a due diligence report by Herbert Smith in 2009 in relation to two acquisitions – before Dechert was retained.

Cross-examining ENRC’s former general counsel, Beat Ehrensberger, Onslow said: ‘You were being told by Herbert Smith in 2009 that [if the relevant acquisition went ahead] there was a serious risk of action being taken by prosecutors in this jurisdiction. You were being advised from 2009 that there was significant risk that unlawful conduct had taken place that could be prosecuted in this jurisdiction.’

He added that ENRC was advised in 2010 that a self-report might be required in relation to another acquisition. In response, Ehrensberger said ENRC was not advised by its solicitors not to complete the two acquisitions despite the potential risks.

Evidence was delivered in-person in the Rolls Building today, after opening submissions were delivered virtually last month.

In its opening, ENRC alleged that Gerrard made unauthorised contact with the SFO to whip up interest in the case in order to boost his own legal fees. It was also claimed that Gerrard ‘cajoled’ ENRC to self-report to the agency because he knew that would generate ‘huge amounts’ of work for Dechert.

The respondents deny all wrongdoing. The trial continues.