Douglas Mill: Come back Tom Wolfe, all is forgiven

SLN readers will have detected a recent dimming of the Northern Lights.

Agreement has now been reached in a major conflict of interest case just before it was due to go to proof. It involved payment of ‘Tens of millions of pounds’, said The Press and Journal. The terms of settlement are, as is usual, confidential, and the firms in question are understandably playing the whole thing down.

Indeed, unless you are sad (like me) this case may have gone under the radar screen till now. To explain: Robert Gordon Kidd sued Paull and Williamson LLP and also Burness Paull LLP, which acquired the action via its merger with the Aberdeen firm, in the Outer House for $210m - £160m to us. I have been following it since February when I read Lord Tyre’s 21-page Opinion (CA 211/15 if you are interested).

Why? Well, professional negligence cases are of interest to me – as are issues involving ethics. I am actually pathetic enough to believe in ethical behaviour by solicitors, which truly disqualifies me from being a Master of the Universe. And, essentially that is what this case is about. Conflict of interest.

Remember conflict? Basic stuff. Bog standard on the Diploma. Don’t act for landlord and tenant, husband and wife/ seller and purchaser. “Simples” as the meerkats would say.

Now, I was never that great a lawyer, and I will not pretend to understand any more than 50 per cent of Lord Tyre’s Opinion. Breach of Fiduciary Duty and Fraudulent Misrepresentation are best left to people like him with really big brains, but conflict I do understand – and it comes screaming out the page.

Page 4 to be exact, where it says: “The pursuer avers that he was not informed by P&W or the first defender of its actings on behalf of Lime Rock, and that P&W and subsequently the first defender represented that it was acting only for ITS and the pursuer……The pursuer avers in fact that Mr X had agreed to act as ‘unofficial counsel’ to Lime Rock in connection with the ITS transaction, while having a solicitor from another firm ‘front’ the negotiations’.”

‘Unofficial counsel’. ‘Front’. Nope. Don’t see them in Paterson and Ritchie.

Now, unlike the Court (and I would expect in due course the SSDT), I have not named the P&W partner. I would imagine things may not have gone so well for him and I know a lot of people will feel a bit sorry for him. Becoming the new leading case in ethics classes is not wonderful.

No, it’s not about him, it’s about the culture of acting for both parties.

Now the cynical amongst you may have war stories about the Aberdeen approach to conflict. Small firms (who I would contest are far better tuned to ethical issues), will shrug with no surprise, remembering the good old ‘Informed Consent’ yarns they have heard over the years.

Some may feel P&W were just unlucky, their only problem was they were rumbled. Some may feel sorry for BP, a well-respected firm that inherited this can of worms.

Butt out, the parties may say, this is a private matter. And indeed, I have kept silent until a settlement has been reached, even when, a few months ago, Lord Tyre made a staggering interim award of expenses of £1,000,000.

But now the profession is asking, correctly, how will this affect us?

The publicity for the profession sucks. Telephone numbers. Transatlantic aspects. The world of Grisham and Turow come alive in the Granite City. Profession? Disrepute? Don’t get me started. The last thing we need during one of the Scottish government’s review of the regulation of the profession is a high profile ethical car crash. For those who love bashing solicitors, a late Christmas present.

Will it cost the profession generally, they wonder? Surely not? Well, ultimately probably yes.

The pursuer got, I suppose, two bites at the defender insurance cherry. Two big firms each with Master Policy and Top Up cover. Lucky him, that must have helped. I am uncertain who paid what at the end of the day, but in all probability, cover meant no residual partner liability. My head nips at trying to work out amounts and issues such as when matters would have been intimated and future premium implications for the ongoing firm.

PI insurance will likely become more expensive for BP, but less obviously, (who remembers Bruce Ritchie’s Dictum-The Master Policy Is More a Deferred Loan Scheme Than An Insurance Policy) for solicitors generally. Insurance is like that—-roofs blow off in Northern Ireland and our buildings premiums go up.

Happy days, indeed.

And thanks to the dozens of people who got in touch with me after the Pagan Osborne articles. Many feel misled by most of the PR coverage. Rest assured, now that at least one PO partner has been sequestrated, further articles will follow.