A City law firm has faced a costs penalty due to its handling of a report alleged to be forged.
- Quinn Emanuel was ordered to pay 30% of the claimants’ costs by Mr Justice Calver.
- The firm failed to sufficiently investigate the authenticity of the Glavstroy report, leading to increased costs.
- The report in question was pivotal in a discontinued claim under the Arbitration Act 1996.
- The decision highlights the importance of engaging with allegations of forgery in legal proceedings.
The prominent City litigation firm, Quinn Emanuel, has been penalised in costs following its lack of engagement with allegations that a report it produced was forged. Mr Justice Calver acknowledged the firm’s reputable status but criticised its procedural conduct, which added unnecessary expenses to a Norwich Pharmacal application against it. Quinn Emanuel neither denied nor confirmed the authenticity of the contested document, known as the Glavstroy report, until pressed by the other party.
Justice Calver granted a request for the firm to disclose the business intelligence agency behind the disputed report, which was initially part of an arbitration case between Russian oligarchs. Despite Quinn Emanuel’s reputable standing and good faith in maintaining client confidentiality, the firm did not adequately investigate upon receiving allegations regarding the report’s authenticity. This oversight was pivotal in the judge’s decision to impose a financial penalty on the firm.
The report was initially used to support an arbitration claim under section 68 of the Arbitration Act 1996, arguing that an award in favour of Quinn Emanuel’s clients should have been $300 million greater. However, evidence suggested that the Glavstroy report was fabricated, although the judge stopped short of stating that the firm knowingly participated in any misconduct.
Justice Calver remarked that when the opposing party raised issues about the report’s validity, Quinn Emanuel should have promptly investigated to confirm its genuineness. This failure to act resulted in the claimants incurring further costs for elaborating on forgery allegations, which increased the breadth and expense of the application.
While the firm was reasonably opposed to disclosing certain information, Justice Calver noted that engaging with the fraud claims sooner might have curtailed the legal process and associated costs. Ted Greeno, the firm’s London co-managing partner, held a strong yet mistaken belief that the information was confidential, necessitating a court order for disclosure.
The judge reasoned that it was fair for the claimants not to bear the full burden of costs due to Quinn Emanuel’s inadequate response to the allegations. As a result, the firm was ordered to cover 30% of the claimants’ costs, reflecting the additional expenses caused by its failure to adequately engage with the forgery claims.
The ruling underscores the need for legal firms to thoroughly investigate allegations of forgery to prevent unnecessary expenses.
