A “magic circle” law firm and one of its partners have been fined £100,000 for operating an “unlawful” no-win, no-fee deal in a controversial dispute regarding Iraqi oilfields. Clifford Chance and Alex Panayides, one of its well-reputed lawyers, are fined £50,000 each after a tribunal found them guilty of breaching professional rules and the law when acting in litigation over oilfields in Iraqi Kurdistan. Both parties admitted to conducting the litigation in the High Court under a conditional fee agreement that was “unlawful and unenforceable”.
Publicised by the Solicitors Disciplinary Tribunal last week, the finding centred on a high-profile case several years ago for the firm and a group of third-party litigation funders. Clifford Chance and Panayides represented Excalibur, an oil exploration company which was in a £1.6 billion dispute with two larger US energy businesses over an exploration deal in Iraq. With over two decades' experience, Panayides agreed to act on a no-win, no-fee basis. However, it emerged later in court proceedings that he had personal ties with one of the third-party funders.
Lord Justice Tomlinson of the Court of Appeal, criticised the law firm for what he said was conflict of interest from the outset of the litigation. After the ruling, the Solicitors Regulation Authority launched an investigation in July. A spokesman for Clifford Chance has confirmed that Panayides was still in the partnership. He said the firm accepted the tribunal’s finding that “some aspects of our conduct in this matter” did not meet the high standards that it was “committed to upholding”.
