Magic circle firm Clifford Chance has been fined £50,000 after admitting it conducted litigation under a funding agreement which was unlawful.
Following an outcome agreed with the Solicitors Regulation Authority, the firm was issued with the penalty yesterday at the Solicitors Disciplinary Tribunal.
The proceedings related to a case which came to the Court of Appeal last year, in which funders were found liable for indemnity costs awarded against their funded client.
Clifford Chance had represented the claimant in Excalibur Ventures v Texas Keystone and Others in a defeated £1.6bn claim after five funders had provided £31.75m to finance the case.
The firm admitted conducting litigation in the High Court under a conditional fee agreement from October 2010 which was 'unlawful and unenforceable' in so far as that High Court litigation was concerned. It also admitted submitting invoices and receiving payments for services pursuant to the agreement.
Clifford Chance also admitted producing to a potential litigation funder a document which contained advice from the firm to a client, without disclosing that the first draft of the advice had been drafted by one of the owners of the client.
It further admitted making payments from sums held on behalf of litigation funders other than in accordance with the funding agreements.
Clifford Chance partner Alexandros Panayides was also fined £50,000 after admitting the same allegations as his firm.
The agreement did not include any admissions about the conduct of the case itself or about a conflict of interest. There is no indication yet what costs are to be paid.
A spokesman for Clifford Chance said: 'We take our obligations to our clients and the profession extremely seriously and are committed to upholding the highest standards at all times. We accept the SDT’s findings that some aspects of our conduct in this matter did not meet these high standards. The issues referred to the SDT were not prompted by any complaint but had all been identified and self-reported to the SRA by the firm following our own prompt and thorough internal review.
‘We are pleased to note that the honesty and integrity of all parties is nowhere in question and that none of the original judicial criticism, which prompted the SRA investigation, is reflected in the SRA’s findings.'
'While it was found that our systems and controls were appropriate, as a firm we are committed to further developing and promoting market-shaping practices in relation to ethics and professional standards.'
The fine is the latest large sum to be levied against a global elite firm, although it is far short of the record £500,000 fine imposed on US firm Locke Lord last month.