Tuesday, September 29, 2009
Wragge & Co - Legalweek
Overview
Unquestionably the Midlands' best law firm (snobbish aspiring City lawyers should remember that Birmingham has been a surprisingly competitive and influential legal market over the last 15 years), Wragge & Co cuts an imposing figure on the national legal market. Despite drifting increasingly into London since its 2000 City launch, Wragges is also still regarded by many as the poster boy for ambitious yet regionally-driven law firms.
That said, not everything has gone to plan in recent years. Profitability growth has lagged its peer group and the breadth of its practice group has arguably lacked focus. Likewise, the shift from regional titan to aspiring London player has not been without growing pains or the odd strategic contortion. With the firm having wrestled with the inevitably tricky London growth issue, Wragges should be well-placed to shift back into high gear.
In April 2008 the firm announced that it had signed a deal to move into new premises in Birmingham in 2011, expanding its office space in the city from 170,000 sq ft to around 250,000, signalling that the firm intends to continue growing in its original heartlands for a while yet.
However, in September 2008 the firm was hit by the effects of the crunch when it was forced into a redundancy consultation, with 30 fee earner jobs under review.
Legal Week's 2008-09 UK top 50 saw the firm ranked 25th by revenue, taking in £105.8m, while partner profits fell to £292,000.
History
Culture
A genuinely progressive firm that was investing in areas like IT and support staff well ahead of many comparable City firms, let alone regional rivals. The firm also has a reputation for supporting its staff.
Key departments
A very broad practice. Against regional rivals the firm competes effectively in a very wide range of disciplines. Property and outsourcing have been particularly prominent recently. However, there has been some surprise in recent years that the firm's respected corporate practice has not been more visible.
Structurally, the firm is divided into five core groups - real estate; human resources; dispute resolution; finance, projects and technology; and corporate.
National/international coverage
Time will tell whether Wragges goes further down the international route but thus far its overseas operations are limited to an outpost in Brussels and a fledgling Hong Kong office, the latter having been launched at the start of 2007. IP chief Gordon Harris heads up the firm's Far East business from his base in the UK.
Elsewhere, Wragges operates a formal alliance with independent German firm Graf von Westphalen, having signed a deal with the 150-lawyer outfit in 2003. Graf operates offices throughout all the major economic and legal centres in Germany, as well as offices in Brussels, Vienna and Alicante.
Key clients
The client base is exceptional in terms of boasting a wide range of bluechip names - clients like BP, BT, 3i and GlaxoSmithKline. However, there has been an internal issue of the firm failing to convert some of its trophy clients into actual work-flow. Because of the breadth of the practice, the firm is certainly diversified.
Leading partners
There are a lot of good partners across departments but Ian Metcalfe in corporate, private equity head Maurice Dwyer and Adrian Bland in real estate would be viewed as stand-out names. High-profile senior partner Quentin Poole (pictured below right) is one of the UK's least dull law firm leaders.
Career prospects
In 2009 the firm promoted just one associate to its all-equity partnership, a steep drop on the previous year's figure of nine. Wragges also operates a 'director' rank, with eight lawyers getting the nod in the summer 2007 round.
Salaries
It was reported in July 2008 that Wragges raised its City NQ rate by £1,000 to £63,000 and similar increases in Birmingham saw pay rise to £41,000 from £40,000 - an increase of 1.6% and 2.5% respectively.
Recruitment
For more information on trainee recruitment at Wragges (presented in a fairly trendy way, by law firm standards) click here.
Work-life balance
The firm's cuddly rep has taken a few knocks in recent years as Wragges has positioned itself (probably rightly) as a slightly more hard-edged business. However, judged against its peer group, Wragges would still be regarded as a progressive and imaginative employer.
In April 2008 the firm again put work-life balance at the top of the agenda after unveiling an ultra-liberal flexi working scheme for all its staff - who don't have to explain to the firm precisely why they want to work the hours they do.
Diversity
Better than average for women and ethnic minorities - perhaps surprisingly, since Wragges' partnership is pretty public school-heavy.
Shared via AddThis
Sunday, September 27, 2009
Behind the veil - Legalweek
Behind the veil - Legalweek
When a member of the French elite is in trouble they call Jean Veil. Michael Goldhaber charts the rise of the legendary French litigator and the firm to which he gives his name
On Monday, January 21, 2008, back when extreme stock volatility was still a novelty, world equity markets plunged 6% with no full explanation apparent. Then, on Thursday, the mystery abated when at least a partial explanation for the sell-off appeared. The French bank Societe Generale (Soc Gen) announced that a young trader named Jerome Kerviel had somehow, without the bank noticing, bet €50bn that stock markets would rise. Soc Gen had spent the past few days desperately selling his positions - and set a new standard for rogue trading losses at €6.4bn. Hit by scandal and a potential legal mess, Soc Gen did what plenty of other rich and powerful French institutions would do in such a situation: It hired Jean Veil.
Veil (pronounced "vay"), name partner of Paris' Veil Jourde, is to the business and political elite of Paris what Edward Bennett Williams was to Washington, DC in the 1960s or David Boies is today: the man to see when you are in trouble. A generalist who occasionally competes with the big boys in mergers and acquisitions, Veil is best-known for his litigation practice, where his client list is a sort of French who's who. They range from oversight-challenged Soc Gen to the scandal-prone oil giant Total; from former French president Jacques Chirac on the right to the former socialist presidential contender Dominique Strauss-Kahn, now chief of the International Monetary Fund. Even the wife of French tennis star and pop singer Yannick Noah called Veil when they needed a divorce. "He's just the best lawyer in town," says Strauss-Kahn. "That's it."
But analogies to Williams or Boies have their limits. The Americans stamped their imprints on elite in-stitutional law firms, which have grown to more than 200 lawyers each - and, in the case of Williams & Connolly, thrived after its founder's death. The Frenchman has no such aspirations. Veil Jourde is a 44-lawyer boutique scrapping for survival against the Anglo-American bruisers. After being ravaged by raids by US firms, Veil Jourde has slowly rebuilt itself with a few precious lateral hires, most notably Emmanuel Rosenfeld from White & Case. Veil and Rosenfeld see their unique brand of litigation, and the corporate advice that ac-companies it, as key to the survival of French independent law firms. And they see the boutique model as one worth fighting for.
Veil was born into an iconic family of the French meritocratic establishment. His mother, Simone Veil, is a figure of moral authority - both as an outspoken survivor of the Holocaust, where she lost her parents and brother; and as leader of the fight to legalise abortion in the mid-1970s, when she was health minister in the first administration of Jacques Chirac. As president of the European Parliament in the early 1980s, she earned the sobriquet "La premiere dame d'Europe."
But arguably Veil's father, Antoine Veil, is even more firmly entrenched in the establishment, a product of the Ecole Nationale d'Administration (ENA), the pinnacle of the French academy. ENA's graduates - known as 'enarques' - have long dominated French public service and business, and implicitly rele-gated all other pursuits, law included, to lower rungs of prestige. Antoine eventually became chief executive at a series of French corporate standardbearers, including the airline Union des Transports Aeriens, Lagardere Transport, and the railcar manufacturer Compagnie International des Wagonlits, which at the time operated the Sofitel hotel chain.
Jean, who now shares his mother's air of jowly gravitas, can still remember the pride he felt as a child of five or six when his father passed his ENA exams. He also recalls his father's disdain when his mother at first suggested that she become a private lawyer. They compromised, and Simone trained to be a magis-trate judge, which is at least a post in France's revered bureaucracy. But when Jean himself graduated from university in 1969, his scholastic record did not qualify him for the high civil service. Antoine was forced to accept that his boy would be a mere lawyer. Jean's younger brother, Pierre-Francois, who is now a partner at Veil Jourde, followed suit a few years later. "It was a sort of revenge," remarks Veil wryly.
Veil takes his parents' fame "as a permanent challenge to create my own first name," he says. An indifferent student, he found his calling as a trainee at Gide Loyrette Nouel. "To me," Veil says, "the law was a sort of miracle." Gide grew from 20 to 100 lawyers during Veil's years 13 years there, emerging as France's leading institutional firm. In 1982 Veil left to share premises (but not a partnership) with the country's leading M&A star, Jean-Michel Darrois. They parted ways in the late 1980s when Darrois founded the corporate boutique Darrois Villey Maillot Brochier, while Veil began to collaborate on cases with Georges Jourde, one of France's top insolvency litigators. They founded the firm that became Veil Jourde in 1990.
For all of his celebrated court cases, Veil devotes half his time to corporate work for regular clients such as the investment bank Lazard and the global ad agency Publicis Groupe. Veil worked with Darrois Villey and Gide for the French bank Groupe Caisse D'Epargne on its €40bn domestic megamerger with Groupe Banc Populaire, a shotgun match arranged by French regulators at the height of the financial crisis this autumn. Furthermore, in 2008, he and Clifford Chance helped L'Oreal, another regular client, add Yves Saint Laurent perfume to its stable for €21.3bn.
While Veil has become a corporate rainmaker, he retains his parents' ethos. "I never imagined that I would make much money," he says. "I consider that to be a lawyer is to be a public servant, participating in the regulation of society." Arguably, Veil's white-collar litigation gives him a chance to put those words into action; at least it makes him an adjunct of the enarques.
Veil's family ties have led to some high-profile cases. Veil was a child when he first met Jacques Chirac (pictured left), who came to dinner at the Veil family home. As a young man, Veil became friends with Ann Sinclair, a journalist who often interviewed Simone Veil on her Newsnight-style television programme and who married Dominique Strauss-Kahn, a prominent politician and sometime lawyer. In 1999 Strauss-Kahn stepped down as finance minister under accusations that he had backdated $84,000 (£55,000) in invoices for legal work he had performed on behalf of the national student health insurance plan. Veil won him a complete acquittal. Now Veil is defending an investigation as to whether Chirac - who lost his immunity when he stepped down as president in 2007 - had used public funds early in his career, as mayor of Paris, to pay the salaries of political supporters. (Chirac has said that the political financing laws at the time allowed practices that later became illegal.)
The fact that Strauss-Kahn was practising law is itself interesting. It is now common for the most eminent public servants, such as Segolene Royal and Dominique de Villepin, to gain admission to the bar when they are out of power. There was a moment during the Strauss-Kahn inquiry when Veil assured the judge that he would be glad to have the grand politician practice in his law firm. It was a stunning reversal of France's traditional pecking order, a bit like a lower league football manager vouching that he'd be happy to take on a top Premiership player. To Veil, it is gratifying that French society has upgraded lawyers' status. "The vision and influence of lawyers has become much more important than 20 or 30 years ago," he says.
Veil's mix of high-profile litigation and corporate work looks strange to American eyes, but Veil argues it is a huge advantage. "I can tell M&A clients what judges will think [if litigation develops], and explain to the judge why the business works the way it works," he says. "This model is extremely precious. It is our sole chance to survive." But as Veil concedes, the mixed practice model can be a tough sell, especially on the M&A side.
Over the course of 2005 and 2006, 20 corporate lawyers left Veil Jourde for US firms - representing a staggering one-third of the firm. Three star dealmakers led the exodus: Guillaume Kuperfils to Mayer Brown; Ariel Harroch to Gibson, Dunn & Crutcher; and Patrick Jais to Fried, Frank, Harris, Shriver & Jacobson.
Veil Jourde co-founder Georges Jourde attributes the outflow to the appeal of working for a stable institution. "Why did we lose partners?" he asks rhetorically. "Not for money. Not for quality of life. It was for employment security." The defectors, he explains, wanted to work at firms that they knew would exist in 50 years, after their founders' demise. Harroch says that a US firm such as Gibson, Dunn was a better platform for his cross-border transactional practice; at the time of going to press Kuperfils and Jais had not responded to requests for comment.
Veil Jourde rebuilt its partnership between 2005 and 2007 with four laterals, including a partner from White & Case and a senior associate from Willkie Farr & Gallagher. From a height of 12 partners - 60 lawyers in total - Veil Jourde has stabilised at ten partners, 44 lawyers total (including trainees). Revenue per lawyer in 2008 was projected to be $500,000, which is competitive with all but the top foreign law firms in Paris. Jourde says that he would like some day to reach 60 lawyers again.
Jourde credits his firm's rebound partly to the appeal of an unstructured boutique. "The spirit of our business is that of an artist," says Jourde, who does his own gardening in the courtyard adjoining his office. "In a French firm you have a right to be a free spirit."
But more fundamentally, Jourde says that litigation gives French boutiques a competitive advantage. It's no accident that most of the new laterals build their practices around French litigation or insolvency proceedings. "The mentality of US and UK firms is not adapted to French litigation," argues Jourde, who served as the lead French litigator for Eurotunnel after it declared insolvency in 2006. Nor are Anglo-American firm finances well-tuned to French litigation. Veil notes that, in white-collar cases, French directors' and officers' insurance routinely demands lean staffing and low fees. The big US and UK firms have therefore dipped only sparingly into the talent pool of French white-collar litigators. Two notable exceptions came in 2007, when Davis Polk & Wardwell poached Georges Terrier (a corporate and litigation generalist) from JeantetAssocies, and Linklaters stole Kiril Bougartchev (a white-collar criminal defence and international investigations specialist) from Gide.
In particular, Veil hopes that the future of his firm lies with litigators such as Emmanuel Rosenfeld - whose practice and personal story provide a neat complement to Veil's. As the second enarque to practise law, qualifying in 1984, Rosenfeld shares Veil's veneration for public service. But whereas Veil excels in domestic investigations and criminal defense on behalf of executives, Rosenfeld has expanded from that base to coordinate international fraud and corruption investigations on behalf of French multi-nationals. In a nutshell, Rosenfeld's business plan is to reinvent the French boutique as a buffer between French business and American investigators.
For five years after graduating ENA, Rosenfeld trained with his father, a respected litigator and real estate lawyer who practised solo, and was so old-fashioned that he would throw out any furniture made after 1700. The idea that law is a business and lawyers should promote themselves were anathema to Pierre Andre Rosenfeld. "It was exactly like practising in 1840," remembers his son. From 1990 to 2006, Emmanuel Rosenfeld sojourned at a firm founded by American expatriates (Salans) and two American firms (Willkie and White & Case) - but he always carried in his heart his father's old-fashioned biases. He hopes to finish his career with Veil Jourde. Here, Rosenfeld says, he has found a setting conducive to international litigation that preserves some of the camaraderie and freedom of Paris legal chambers before Anglo-American firms arrived in force in the 1990s. "The American model has developed in every aspect of the French legal profession," says Rosenfeld. That means an elevation of the law's prestige - but also a trend toward gargantuism and endless committee meetings.
Veil and Rosenfeld became close in 1999, when Veil helped Total Fina to take over Elf Aquitaine, the scandal-plagued former national oil producer. Elf had hired Rosenfeld to assist in a corruption investigation of its former executives. Total asked Veil to take over the pending investigation, but Veil insisted that Rosenfeld stay on. Together, they helped the merged company to participate as a civil third party in the prosecution of dozens of former Elf executives. The investigation revealed a swamp of corruption by enarques in business and politics, replete with allegations of multibillion-franc kickbacks in a weapons deal with the Taiwanese navy, and mistresses kept in high style (leading one to publish the memoir Whore of the Republic). It ended with the conviction of, among others, Elf's former chief executive Loik Lefloch-Prigent and second-in-command Alfred Sirven.
As securities fraud and corruption inquiries increasingly cross borders - often originating in the United States - Rosenfeld routinely shares clients with US firms such as Cravath, Swaine & Moore, Patton Boggs, and Zuckerman Spaeder. Rosenfeld is currently advising Total on US bribery investigations re-garding sales to Iraq and Iran. (Total denies any wrongdoing.) When US authorities pressure French companies to conduct an "internal investigation" led by an outside law firm - in practice, usually a US firm - Veil Jourde often acts as an intermediary between the French company and the American law firm, while taking the lead in any parallel French proceeding.
"It's not culturally easy for French companies to accept that their lawyers are essentially deputised by the US government," observes litigation partner Daniel Schimmel of Kelley Drye & Warren in New York, who sometimes works with Rosenfeld on international investigations. "They like to hire a firm that serves as a buffer." The courtly Rosenfeld, who briefly taught French literature at Yale as a young man, clearly revels in his role as interpreter. "There is one main difference between internal investigations in the US and France," he says. "And that is that the concept doesn't exist in France. You must understand that the exercise is totally unbearable at first for a European company."
For other Rosenfeld clients, such as the aerospace giant European Aeronautic Defence and Space Company (EADS -parent of Airbus SAS) and the chief financial officer of Vivendi, which are being investigated for insider trading, Veil Jourde's role is largely to contend with domestic probes. (Both clients deny any wrongdoing.) But in Jean Veil's most notorious case, l'affaire viel, his client is facing no French investigation at all - a fact that surprises some.
"I can't imagine that the [UK] Financial Services Authority would not have asked how a leading bank didn't identify a position of that size," says Paul Lomas of Freshfields Bruckhaus Deringer, co-author of a new book Corporate Internal Investigations: An International Guide. The Anglo-American model of light preemptive regulation of finance is due for serious revision, but it still has the world's toughest post-hoc regulation. In the Kerviel (pictured right) case, post-hoc regulation will fall to US plaintiffs' lawyers, who have filed three class actions against Soc Gen in US courts. Skadden, Arps, Slate, Meagher & Flom is defending Soc Gen in that litigation.
In France, though, the bank has relied exclusively on French boutique litigators for the investigation of Kerviel. As well as Veil, the independent dream team is rounded out by Jean Reinhart of 40-lawyer Reinhart Marville Torre and Francois Martineau of Lussan & Associes, a 20-lawyer firm founded in 1932 that is unusual in Paris for outlasting its founder, if only just (Claude Lussan argued his last case aged 98, shortly before his death in 2008). Having completed its own investigation of Kerviel, Soc Gen is working closely with French prosecutors - and taking positions with a careful eye to the bank's expo-sure in the US
The Soc Gen trio maintains that Kerviel committed fraud, forgery, breach of trust, and breach of the computer system to introduce false data. Kerviel, who at press time was expected to be indicted, has protested that his superiors were aware of his actions. But Veil's strategy is to broadcast an image of Kerviel, who came from a humble background in Brittany, as a desperate social climber. After being rejected by the grandes ecoles like ENA, Kerviel entered Soc Gen through the back office, and was making less than €100,000 (£84,000) a year when the scandal broke.
"Kerviel was not coming from the best school," says Veil. "Perhaps he felt a necessity to take re-venge."
It is an argument that resonates in the French psyche. Especially, perhaps, for a lawyer who emerged from the shadow of his enarque father to craft his own successful rebellion.
Shared via AddThis
When a member of the French elite is in trouble they call Jean Veil. Michael Goldhaber charts the rise of the legendary French litigator and the firm to which he gives his name
On Monday, January 21, 2008, back when extreme stock volatility was still a novelty, world equity markets plunged 6% with no full explanation apparent. Then, on Thursday, the mystery abated when at least a partial explanation for the sell-off appeared. The French bank Societe Generale (Soc Gen) announced that a young trader named Jerome Kerviel had somehow, without the bank noticing, bet €50bn that stock markets would rise. Soc Gen had spent the past few days desperately selling his positions - and set a new standard for rogue trading losses at €6.4bn. Hit by scandal and a potential legal mess, Soc Gen did what plenty of other rich and powerful French institutions would do in such a situation: It hired Jean Veil.
Veil (pronounced "vay"), name partner of Paris' Veil Jourde, is to the business and political elite of Paris what Edward Bennett Williams was to Washington, DC in the 1960s or David Boies is today: the man to see when you are in trouble. A generalist who occasionally competes with the big boys in mergers and acquisitions, Veil is best-known for his litigation practice, where his client list is a sort of French who's who. They range from oversight-challenged Soc Gen to the scandal-prone oil giant Total; from former French president Jacques Chirac on the right to the former socialist presidential contender Dominique Strauss-Kahn, now chief of the International Monetary Fund. Even the wife of French tennis star and pop singer Yannick Noah called Veil when they needed a divorce. "He's just the best lawyer in town," says Strauss-Kahn. "That's it."
But analogies to Williams or Boies have their limits. The Americans stamped their imprints on elite in-stitutional law firms, which have grown to more than 200 lawyers each - and, in the case of Williams & Connolly, thrived after its founder's death. The Frenchman has no such aspirations. Veil Jourde is a 44-lawyer boutique scrapping for survival against the Anglo-American bruisers. After being ravaged by raids by US firms, Veil Jourde has slowly rebuilt itself with a few precious lateral hires, most notably Emmanuel Rosenfeld from White & Case. Veil and Rosenfeld see their unique brand of litigation, and the corporate advice that ac-companies it, as key to the survival of French independent law firms. And they see the boutique model as one worth fighting for.
Veil was born into an iconic family of the French meritocratic establishment. His mother, Simone Veil, is a figure of moral authority - both as an outspoken survivor of the Holocaust, where she lost her parents and brother; and as leader of the fight to legalise abortion in the mid-1970s, when she was health minister in the first administration of Jacques Chirac. As president of the European Parliament in the early 1980s, she earned the sobriquet "La premiere dame d'Europe."
But arguably Veil's father, Antoine Veil, is even more firmly entrenched in the establishment, a product of the Ecole Nationale d'Administration (ENA), the pinnacle of the French academy. ENA's graduates - known as 'enarques' - have long dominated French public service and business, and implicitly rele-gated all other pursuits, law included, to lower rungs of prestige. Antoine eventually became chief executive at a series of French corporate standardbearers, including the airline Union des Transports Aeriens, Lagardere Transport, and the railcar manufacturer Compagnie International des Wagonlits, which at the time operated the Sofitel hotel chain.
Jean, who now shares his mother's air of jowly gravitas, can still remember the pride he felt as a child of five or six when his father passed his ENA exams. He also recalls his father's disdain when his mother at first suggested that she become a private lawyer. They compromised, and Simone trained to be a magis-trate judge, which is at least a post in France's revered bureaucracy. But when Jean himself graduated from university in 1969, his scholastic record did not qualify him for the high civil service. Antoine was forced to accept that his boy would be a mere lawyer. Jean's younger brother, Pierre-Francois, who is now a partner at Veil Jourde, followed suit a few years later. "It was a sort of revenge," remarks Veil wryly.
Veil takes his parents' fame "as a permanent challenge to create my own first name," he says. An indifferent student, he found his calling as a trainee at Gide Loyrette Nouel. "To me," Veil says, "the law was a sort of miracle." Gide grew from 20 to 100 lawyers during Veil's years 13 years there, emerging as France's leading institutional firm. In 1982 Veil left to share premises (but not a partnership) with the country's leading M&A star, Jean-Michel Darrois. They parted ways in the late 1980s when Darrois founded the corporate boutique Darrois Villey Maillot Brochier, while Veil began to collaborate on cases with Georges Jourde, one of France's top insolvency litigators. They founded the firm that became Veil Jourde in 1990.
For all of his celebrated court cases, Veil devotes half his time to corporate work for regular clients such as the investment bank Lazard and the global ad agency Publicis Groupe. Veil worked with Darrois Villey and Gide for the French bank Groupe Caisse D'Epargne on its €40bn domestic megamerger with Groupe Banc Populaire, a shotgun match arranged by French regulators at the height of the financial crisis this autumn. Furthermore, in 2008, he and Clifford Chance helped L'Oreal, another regular client, add Yves Saint Laurent perfume to its stable for €21.3bn.
While Veil has become a corporate rainmaker, he retains his parents' ethos. "I never imagined that I would make much money," he says. "I consider that to be a lawyer is to be a public servant, participating in the regulation of society." Arguably, Veil's white-collar litigation gives him a chance to put those words into action; at least it makes him an adjunct of the enarques.
Veil's family ties have led to some high-profile cases. Veil was a child when he first met Jacques Chirac (pictured left), who came to dinner at the Veil family home. As a young man, Veil became friends with Ann Sinclair, a journalist who often interviewed Simone Veil on her Newsnight-style television programme and who married Dominique Strauss-Kahn, a prominent politician and sometime lawyer. In 1999 Strauss-Kahn stepped down as finance minister under accusations that he had backdated $84,000 (£55,000) in invoices for legal work he had performed on behalf of the national student health insurance plan. Veil won him a complete acquittal. Now Veil is defending an investigation as to whether Chirac - who lost his immunity when he stepped down as president in 2007 - had used public funds early in his career, as mayor of Paris, to pay the salaries of political supporters. (Chirac has said that the political financing laws at the time allowed practices that later became illegal.)
The fact that Strauss-Kahn was practising law is itself interesting. It is now common for the most eminent public servants, such as Segolene Royal and Dominique de Villepin, to gain admission to the bar when they are out of power. There was a moment during the Strauss-Kahn inquiry when Veil assured the judge that he would be glad to have the grand politician practice in his law firm. It was a stunning reversal of France's traditional pecking order, a bit like a lower league football manager vouching that he'd be happy to take on a top Premiership player. To Veil, it is gratifying that French society has upgraded lawyers' status. "The vision and influence of lawyers has become much more important than 20 or 30 years ago," he says.
Veil's mix of high-profile litigation and corporate work looks strange to American eyes, but Veil argues it is a huge advantage. "I can tell M&A clients what judges will think [if litigation develops], and explain to the judge why the business works the way it works," he says. "This model is extremely precious. It is our sole chance to survive." But as Veil concedes, the mixed practice model can be a tough sell, especially on the M&A side.
Over the course of 2005 and 2006, 20 corporate lawyers left Veil Jourde for US firms - representing a staggering one-third of the firm. Three star dealmakers led the exodus: Guillaume Kuperfils to Mayer Brown; Ariel Harroch to Gibson, Dunn & Crutcher; and Patrick Jais to Fried, Frank, Harris, Shriver & Jacobson.
Veil Jourde co-founder Georges Jourde attributes the outflow to the appeal of working for a stable institution. "Why did we lose partners?" he asks rhetorically. "Not for money. Not for quality of life. It was for employment security." The defectors, he explains, wanted to work at firms that they knew would exist in 50 years, after their founders' demise. Harroch says that a US firm such as Gibson, Dunn was a better platform for his cross-border transactional practice; at the time of going to press Kuperfils and Jais had not responded to requests for comment.
Veil Jourde rebuilt its partnership between 2005 and 2007 with four laterals, including a partner from White & Case and a senior associate from Willkie Farr & Gallagher. From a height of 12 partners - 60 lawyers in total - Veil Jourde has stabilised at ten partners, 44 lawyers total (including trainees). Revenue per lawyer in 2008 was projected to be $500,000, which is competitive with all but the top foreign law firms in Paris. Jourde says that he would like some day to reach 60 lawyers again.
Jourde credits his firm's rebound partly to the appeal of an unstructured boutique. "The spirit of our business is that of an artist," says Jourde, who does his own gardening in the courtyard adjoining his office. "In a French firm you have a right to be a free spirit."
But more fundamentally, Jourde says that litigation gives French boutiques a competitive advantage. It's no accident that most of the new laterals build their practices around French litigation or insolvency proceedings. "The mentality of US and UK firms is not adapted to French litigation," argues Jourde, who served as the lead French litigator for Eurotunnel after it declared insolvency in 2006. Nor are Anglo-American firm finances well-tuned to French litigation. Veil notes that, in white-collar cases, French directors' and officers' insurance routinely demands lean staffing and low fees. The big US and UK firms have therefore dipped only sparingly into the talent pool of French white-collar litigators. Two notable exceptions came in 2007, when Davis Polk & Wardwell poached Georges Terrier (a corporate and litigation generalist) from JeantetAssocies, and Linklaters stole Kiril Bougartchev (a white-collar criminal defence and international investigations specialist) from Gide.
In particular, Veil hopes that the future of his firm lies with litigators such as Emmanuel Rosenfeld - whose practice and personal story provide a neat complement to Veil's. As the second enarque to practise law, qualifying in 1984, Rosenfeld shares Veil's veneration for public service. But whereas Veil excels in domestic investigations and criminal defense on behalf of executives, Rosenfeld has expanded from that base to coordinate international fraud and corruption investigations on behalf of French multi-nationals. In a nutshell, Rosenfeld's business plan is to reinvent the French boutique as a buffer between French business and American investigators.
For five years after graduating ENA, Rosenfeld trained with his father, a respected litigator and real estate lawyer who practised solo, and was so old-fashioned that he would throw out any furniture made after 1700. The idea that law is a business and lawyers should promote themselves were anathema to Pierre Andre Rosenfeld. "It was exactly like practising in 1840," remembers his son. From 1990 to 2006, Emmanuel Rosenfeld sojourned at a firm founded by American expatriates (Salans) and two American firms (Willkie and White & Case) - but he always carried in his heart his father's old-fashioned biases. He hopes to finish his career with Veil Jourde. Here, Rosenfeld says, he has found a setting conducive to international litigation that preserves some of the camaraderie and freedom of Paris legal chambers before Anglo-American firms arrived in force in the 1990s. "The American model has developed in every aspect of the French legal profession," says Rosenfeld. That means an elevation of the law's prestige - but also a trend toward gargantuism and endless committee meetings.
Veil and Rosenfeld became close in 1999, when Veil helped Total Fina to take over Elf Aquitaine, the scandal-plagued former national oil producer. Elf had hired Rosenfeld to assist in a corruption investigation of its former executives. Total asked Veil to take over the pending investigation, but Veil insisted that Rosenfeld stay on. Together, they helped the merged company to participate as a civil third party in the prosecution of dozens of former Elf executives. The investigation revealed a swamp of corruption by enarques in business and politics, replete with allegations of multibillion-franc kickbacks in a weapons deal with the Taiwanese navy, and mistresses kept in high style (leading one to publish the memoir Whore of the Republic). It ended with the conviction of, among others, Elf's former chief executive Loik Lefloch-Prigent and second-in-command Alfred Sirven.
As securities fraud and corruption inquiries increasingly cross borders - often originating in the United States - Rosenfeld routinely shares clients with US firms such as Cravath, Swaine & Moore, Patton Boggs, and Zuckerman Spaeder. Rosenfeld is currently advising Total on US bribery investigations re-garding sales to Iraq and Iran. (Total denies any wrongdoing.) When US authorities pressure French companies to conduct an "internal investigation" led by an outside law firm - in practice, usually a US firm - Veil Jourde often acts as an intermediary between the French company and the American law firm, while taking the lead in any parallel French proceeding.
"It's not culturally easy for French companies to accept that their lawyers are essentially deputised by the US government," observes litigation partner Daniel Schimmel of Kelley Drye & Warren in New York, who sometimes works with Rosenfeld on international investigations. "They like to hire a firm that serves as a buffer." The courtly Rosenfeld, who briefly taught French literature at Yale as a young man, clearly revels in his role as interpreter. "There is one main difference between internal investigations in the US and France," he says. "And that is that the concept doesn't exist in France. You must understand that the exercise is totally unbearable at first for a European company."
For other Rosenfeld clients, such as the aerospace giant European Aeronautic Defence and Space Company (EADS -parent of Airbus SAS) and the chief financial officer of Vivendi, which are being investigated for insider trading, Veil Jourde's role is largely to contend with domestic probes. (Both clients deny any wrongdoing.) But in Jean Veil's most notorious case, l'affaire viel, his client is facing no French investigation at all - a fact that surprises some.
"I can't imagine that the [UK] Financial Services Authority would not have asked how a leading bank didn't identify a position of that size," says Paul Lomas of Freshfields Bruckhaus Deringer, co-author of a new book Corporate Internal Investigations: An International Guide. The Anglo-American model of light preemptive regulation of finance is due for serious revision, but it still has the world's toughest post-hoc regulation. In the Kerviel (pictured right) case, post-hoc regulation will fall to US plaintiffs' lawyers, who have filed three class actions against Soc Gen in US courts. Skadden, Arps, Slate, Meagher & Flom is defending Soc Gen in that litigation.
In France, though, the bank has relied exclusively on French boutique litigators for the investigation of Kerviel. As well as Veil, the independent dream team is rounded out by Jean Reinhart of 40-lawyer Reinhart Marville Torre and Francois Martineau of Lussan & Associes, a 20-lawyer firm founded in 1932 that is unusual in Paris for outlasting its founder, if only just (Claude Lussan argued his last case aged 98, shortly before his death in 2008). Having completed its own investigation of Kerviel, Soc Gen is working closely with French prosecutors - and taking positions with a careful eye to the bank's expo-sure in the US
The Soc Gen trio maintains that Kerviel committed fraud, forgery, breach of trust, and breach of the computer system to introduce false data. Kerviel, who at press time was expected to be indicted, has protested that his superiors were aware of his actions. But Veil's strategy is to broadcast an image of Kerviel, who came from a humble background in Brittany, as a desperate social climber. After being rejected by the grandes ecoles like ENA, Kerviel entered Soc Gen through the back office, and was making less than €100,000 (£84,000) a year when the scandal broke.
"Kerviel was not coming from the best school," says Veil. "Perhaps he felt a necessity to take re-venge."
It is an argument that resonates in the French psyche. Especially, perhaps, for a lawyer who emerged from the shadow of his enarque father to craft his own successful rebellion.
Shared via AddThis
Friday, September 25, 2009
Professional negligence: The risks of globalisation - Legalweek
Professional negligence: The risks of globalisation - Legalweek
Over the last 20 years, the process of integrating economic activity across international borders, or 'globalisation', has achieved a heightened significance in the business strategies of companies and professional service firms. Globalisation has come to be regarded as an unstoppable force; in the words of former US President Bill Clinton, speaking in November 2000, "the economic equivalent of a force of nature". However, concern at the rapidity with which the financial crisis spread throughout the world has prompted calls for greater caution. The current reappraisal of globalisation is echoed in issues confronting international professional service providers relating to their exposure to liability risk across multiple jurisdictions.
The variety of structures
A key factor at the heart of the issues with which international service providers must grapple is the legal structure of their operations across separate countries. This directly affects the ability of claimants to access assets in countries distantly located from the scene of the work which is the subject of their allegations. Some of the larger international law firms operate as a single partnership or LLP throughout the world, albeit with some services being provided by locally incorporated subsidiaries. Other international law firms operate as a single partnership/LLP in much of the world but as separate partnerships in a small number of jurisdictions such as Japan, often for reasons connected with local regulatory requirements. Many national law firms of all sizes have joined international associations or networks, within which clients are referred to "preferred" correspondent or member firms in other countries.
Some, but relatively few, of the larger international legal practices have followed the traditional model adopted by the biggest networks in the accountancy profession, involving legally separate LLPs/partnerships in each country, all of which are members of a network administered by a non-trading entity. This model was adopted by the accountants before most of today's international law firms had travelled very far down the road of cross-border expansion. The network structure meant that profit shares of partners in the larger member firms were not diluted but it was still possible to assimilate existing local firms without requiring them to surrender all of their autonomy.
Another significant benefit of this model was that it offered some protection for each national partnership from professional liabilities incurred by other member firms, particularly small-scale practices in territories where skills and experience were in short supply and justice was somewhat random in quality if not occasionally biased.
The decision taken by the larger law firms to adopt more unified structures has been attributed to a number of factors, including (it has been suggested) a comparatively greater significance being attached by them to operating according to a partnership model, a relatively lesser concern about liability avoidance, and a tendency to expand through a deliberate strategy of seeding overseas development by opening new offices rather than through a long series of deals between existing local firms.
Comparisons between the legal and accountancy markets can be instructive in this field, notwithstanding their points of divergence. It is useful to consider the experience of accountancy networks, given that similar issues will affect law firms which are members of such structures, and also because decisions about restructuring options may appear on the agenda of other firms from time to time in connection with specific proposals for international expansion or with general organisational reviews.
A number of the larger accountancy networks have revised their structures in recent years, bringing more closely together their national member firms within particular continents. Some have established a new layer of non-trading entities in which ownership is shared between individuals drawn from all of the national firms in that region. However, as yet there is little sign of a general consolidation of trading operations or that the accountancy networks will dismantle the barriers between European and North American member firms.
Liability risk
Numerous commercial factors will influence the legal structure chosen by an international professional services brand. Mitigation of liability risk may not be a predominant consideration but will nevertheless feature in the inevitable balancing exercise. Although network structures sacrifice some of the cohesiveness and opportunities for quality control and oversight available in a fully integrated international organisation, they may be effective in preventing liabilities from jumping across the firebreaks established between their legally separate member firms. They are not a guarantee of total protection, as 'holding out' risk, for example, is difficult to control, not least because a firm in the UK can have little direct influence on a firm in, say, South America and is unlikely to have detailed knowledge of holding out law in every relevant jurisdiction. Individuals may fail to "live the structure" by referring to "my American partners" and "our Chicago office" although the US firm is legally separate. But the use of text explaining the legal relationship between member firms has become more effective with the increasing role played by email in business communication throughout the world, making holding out claims ever more difficult.
Unsurprisingly it is in the US that accountancy networks have faced their most serious challenges to ring-fencing liabilities attaching to the work of individual member firms. In the 1990s, claimants tended to argue that the relationship between member firms amounted to a partnership in law, or that the facts of a particular engagement established that the US firm had been standing behind its local fellow member (say in the Caribbean) in a principal-agent or alter ego relationship, referring to evidence of instructions given or influence over the local firm. Such claims tended not to survive motions for summary dismissal, although there were some exceptions. It is as yet unclear whether the new semi-integrated regional structures will be more vulnerable to 'partnership' claims.
Stepping stone claims
Having experienced mixed success with those arguments, US claimant lawyers have recently favoured a different approach. Claims have been brought against the non-trading 'international' entities which license network member firms, on the theory that the member firm is a mere agent of that entity. Such a claim is now pending in the Southern District Court of New York against the non-trading international entities of the Deloitte and Grant Thornton networks, arising from audits by Italian member firms of Parmalat, the failed dairy giant. Significantly, the US member firms of each network have also been sued, on the theory that the international entity is the agent or alter ego of the US firm. The claimants seek to rely principally on evidence of general influence exerted over the international entity by board members drawn from the US firm, and evidence of general control by the international entities over firms' professional practices (for example through inspection visits and the prescription of engagement procedures). It is possible to imagine such arguments being deployed in other cases against a UK firm sued as a co-defendant with its fellow US firm.
The US firms and international entities in Parmalat failed to obtain summary dismissal of the claims and now face a jury trial. Their resolve will have been strengthened by the verdict of a Florida jury in June this year, dismissing a similar "agency" claim against BDO International involving an allegation that it controlled its US member firm.
Ring-fencing liabilities and the future
Given the significance of services provided by offshore professionals with limited assets, it is unsurprising that the financial crisis has generated new attempts by US claimants to attach liability on other parts of a network. Attempts to ring-fence the liabilities of individual member firms can exact a high price in legal costs, but this has to be weighed against the vast amounts which may be at stake. The fact that the fences remain in place within the largest accountancy firms is indicative of their relative success in the courts in defending these boundaries, although legal separation did not save member firms in Andersen Worldwide from the outflow of business following the collapse of Enron.
UK law firms that are influential members of international networks will follow with interest developments in the Parmalat litigation. In particular, they may wish to consider distancing themselves further from direction of the administration of their international network. They may need to consider whether their insurance cover provides appropriate protection for claims based on engagements performed by other member firms, and involving allegations of holding out, partnership, or agency/alter ego connected with other member firms or the network's international entity.
Law firms that practise as a single worldwide unit may regard the US liability issues confronting networks as having no direct impact upon them, because by definition they would be unable to confine claims liabilities to their local offices which performed the relevant work. Nevertheless, if any of the major international law firms were exposed to major US litigation risk in the wake of financial crisis, any damage limitation provided by the network model may look more attractive if and when firms come to take a fresh look at their legal structures and the risk/reward balance, either in the course of expanding into new territories or as part of a periodic general review.
James Roberts is a partner and Andrew Forsyth associate director in Barlow Lyde & Gilbert's professional and financiel disputes team.
Shared via AddThis
Over the last 20 years, the process of integrating economic activity across international borders, or 'globalisation', has achieved a heightened significance in the business strategies of companies and professional service firms. Globalisation has come to be regarded as an unstoppable force; in the words of former US President Bill Clinton, speaking in November 2000, "the economic equivalent of a force of nature". However, concern at the rapidity with which the financial crisis spread throughout the world has prompted calls for greater caution. The current reappraisal of globalisation is echoed in issues confronting international professional service providers relating to their exposure to liability risk across multiple jurisdictions.
The variety of structures
A key factor at the heart of the issues with which international service providers must grapple is the legal structure of their operations across separate countries. This directly affects the ability of claimants to access assets in countries distantly located from the scene of the work which is the subject of their allegations. Some of the larger international law firms operate as a single partnership or LLP throughout the world, albeit with some services being provided by locally incorporated subsidiaries. Other international law firms operate as a single partnership/LLP in much of the world but as separate partnerships in a small number of jurisdictions such as Japan, often for reasons connected with local regulatory requirements. Many national law firms of all sizes have joined international associations or networks, within which clients are referred to "preferred" correspondent or member firms in other countries.
Some, but relatively few, of the larger international legal practices have followed the traditional model adopted by the biggest networks in the accountancy profession, involving legally separate LLPs/partnerships in each country, all of which are members of a network administered by a non-trading entity. This model was adopted by the accountants before most of today's international law firms had travelled very far down the road of cross-border expansion. The network structure meant that profit shares of partners in the larger member firms were not diluted but it was still possible to assimilate existing local firms without requiring them to surrender all of their autonomy.
Another significant benefit of this model was that it offered some protection for each national partnership from professional liabilities incurred by other member firms, particularly small-scale practices in territories where skills and experience were in short supply and justice was somewhat random in quality if not occasionally biased.
The decision taken by the larger law firms to adopt more unified structures has been attributed to a number of factors, including (it has been suggested) a comparatively greater significance being attached by them to operating according to a partnership model, a relatively lesser concern about liability avoidance, and a tendency to expand through a deliberate strategy of seeding overseas development by opening new offices rather than through a long series of deals between existing local firms.
Comparisons between the legal and accountancy markets can be instructive in this field, notwithstanding their points of divergence. It is useful to consider the experience of accountancy networks, given that similar issues will affect law firms which are members of such structures, and also because decisions about restructuring options may appear on the agenda of other firms from time to time in connection with specific proposals for international expansion or with general organisational reviews.
A number of the larger accountancy networks have revised their structures in recent years, bringing more closely together their national member firms within particular continents. Some have established a new layer of non-trading entities in which ownership is shared between individuals drawn from all of the national firms in that region. However, as yet there is little sign of a general consolidation of trading operations or that the accountancy networks will dismantle the barriers between European and North American member firms.
Liability risk
Numerous commercial factors will influence the legal structure chosen by an international professional services brand. Mitigation of liability risk may not be a predominant consideration but will nevertheless feature in the inevitable balancing exercise. Although network structures sacrifice some of the cohesiveness and opportunities for quality control and oversight available in a fully integrated international organisation, they may be effective in preventing liabilities from jumping across the firebreaks established between their legally separate member firms. They are not a guarantee of total protection, as 'holding out' risk, for example, is difficult to control, not least because a firm in the UK can have little direct influence on a firm in, say, South America and is unlikely to have detailed knowledge of holding out law in every relevant jurisdiction. Individuals may fail to "live the structure" by referring to "my American partners" and "our Chicago office" although the US firm is legally separate. But the use of text explaining the legal relationship between member firms has become more effective with the increasing role played by email in business communication throughout the world, making holding out claims ever more difficult.
Unsurprisingly it is in the US that accountancy networks have faced their most serious challenges to ring-fencing liabilities attaching to the work of individual member firms. In the 1990s, claimants tended to argue that the relationship between member firms amounted to a partnership in law, or that the facts of a particular engagement established that the US firm had been standing behind its local fellow member (say in the Caribbean) in a principal-agent or alter ego relationship, referring to evidence of instructions given or influence over the local firm. Such claims tended not to survive motions for summary dismissal, although there were some exceptions. It is as yet unclear whether the new semi-integrated regional structures will be more vulnerable to 'partnership' claims.
Stepping stone claims
Having experienced mixed success with those arguments, US claimant lawyers have recently favoured a different approach. Claims have been brought against the non-trading 'international' entities which license network member firms, on the theory that the member firm is a mere agent of that entity. Such a claim is now pending in the Southern District Court of New York against the non-trading international entities of the Deloitte and Grant Thornton networks, arising from audits by Italian member firms of Parmalat, the failed dairy giant. Significantly, the US member firms of each network have also been sued, on the theory that the international entity is the agent or alter ego of the US firm. The claimants seek to rely principally on evidence of general influence exerted over the international entity by board members drawn from the US firm, and evidence of general control by the international entities over firms' professional practices (for example through inspection visits and the prescription of engagement procedures). It is possible to imagine such arguments being deployed in other cases against a UK firm sued as a co-defendant with its fellow US firm.
The US firms and international entities in Parmalat failed to obtain summary dismissal of the claims and now face a jury trial. Their resolve will have been strengthened by the verdict of a Florida jury in June this year, dismissing a similar "agency" claim against BDO International involving an allegation that it controlled its US member firm.
Ring-fencing liabilities and the future
Given the significance of services provided by offshore professionals with limited assets, it is unsurprising that the financial crisis has generated new attempts by US claimants to attach liability on other parts of a network. Attempts to ring-fence the liabilities of individual member firms can exact a high price in legal costs, but this has to be weighed against the vast amounts which may be at stake. The fact that the fences remain in place within the largest accountancy firms is indicative of their relative success in the courts in defending these boundaries, although legal separation did not save member firms in Andersen Worldwide from the outflow of business following the collapse of Enron.
UK law firms that are influential members of international networks will follow with interest developments in the Parmalat litigation. In particular, they may wish to consider distancing themselves further from direction of the administration of their international network. They may need to consider whether their insurance cover provides appropriate protection for claims based on engagements performed by other member firms, and involving allegations of holding out, partnership, or agency/alter ego connected with other member firms or the network's international entity.
Law firms that practise as a single worldwide unit may regard the US liability issues confronting networks as having no direct impact upon them, because by definition they would be unable to confine claims liabilities to their local offices which performed the relevant work. Nevertheless, if any of the major international law firms were exposed to major US litigation risk in the wake of financial crisis, any damage limitation provided by the network model may look more attractive if and when firms come to take a fresh look at their legal structures and the risk/reward balance, either in the course of expanding into new territories or as part of a periodic general review.
James Roberts is a partner and Andrew Forsyth associate director in Barlow Lyde & Gilbert's professional and financiel disputes team.
Shared via AddThis
Monday, September 14, 2009
Chief Justice of India for Assets Confiscation in Corruption Cases
NEW DELHI: Taking note of the demands for enhancing penalties and punishment under the Prevention of Corruption Act, Chief Justice of India K.G. Balakrishnan on Saturday appeared inclined in favour of a statutory provision for confiscation of assets of persons convicted of offences under the PCA.
“The rationale behind the same is that if a public official amasses wealth at the cost of the public, then the state is justified in seizing such assets. [But] Similar enactments under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Properties) Act, 1976 in case of persons arrested under detention laws have not proved to be very successful,” he said.
Such proposals needed to be thoroughly examined for constitutional compatibility before they were legislated, Justice Balakrishnan said addressing a two-day national seminar on “Fighting Crimes Related to Corruption,” organised here jointly by the Central Bureau of Investigation and the National Institute of Criminology and Forensic Science.
Shortage of courtsProcedural delays in granting sanction and difficulty in marshalling a large number of witnesses were the major hurdles to achieving meaningful convictions. Anti-corruption agencies were already finding it difficult to grapple with 9,000 pending cases due to shortage of designated courts.
“It is necessary there should be a speedy manner of granting sanction. The prosecution becomes ineffective if the sanction is granted after 6-7 years.”
The Chief Justice also expressed concern over the fact that the CBI, instead of basing its case on solid witnesses, was relying on a large number of witnesses in corruption cases, and thus the trial was prolonged for three to four years.
Referring to the PCA, he said the foremost criticism of the law was that an investigating agency, in order to initiate prosecution against a public servant, needed to obtain prior sanction from the competent authority which was delayed or denied.
“Even in instances where the investigating agencies have gathered substantial material to proceed against a person, it is felt that the necessary sanction is not given on account of extraneous considerations.”
The CJI said there was need for separation of the CBI’s prosecution and investigating functions. “I understand that there has been considerable resistance to this suggestion, since investigating officers and prosecution lawyers need to work in close co-ordination. The real problem here is that the CBI has been relying on government law officers and standing counsel to conduct prosecutions, whereas there is a need for retaining a regular team of lawyers."
Source - Indian Express
NEW DELHI: While coming down heavily on corruption, the Chief Justice of India, K G Balakrishnan, said on Saturday that the Prevention of Corruption Act (PCA) provision asking investigating agencies to seek permission from higher authorities for prosecuting accused public servants could be contributing in creating a "climate of impunity" where the requisite sanction is either delayed or denied because of extraneous considerations.
He emphasized that it is not the quantum of punishment but the certainty of punishment which proves to be an effective deterrent against corruption and how it was important to address the issue of obstructions in the investigation and trial process.
"Even in instances where the investigating agencies have gathered substantial material to proceed against a person, it is felt that the necessary sanction is not given on account of extraneous considerations. In many cases, aggrieved parties have approached the higher judiciary when the requisite sanctions have been denied despite the production of incriminating materials," he saidd.
Addressing a seminar on corruption organized by CBI and National Institute of Criminology and Forensic Sciences, Balakrishnan said corruption in some cases can be a threat to national security. He cited the example of how smuggled arms and explosives were used for the 1993 Mumbai blasts.
The CJI said there might be a case in near future for the higher judiciary to grant effective constitutional remedies in respect of instances of corruption, over and above the statutory remedies provided by the PCA. "In recent years, several instances of corruption by high-level officials have been recorded by the higher judiciary in the exercise of their writ jurisdiction, but the same do not amount to convictions and hence effective punishments could not be given. Therefore, our deliberations should focus on how to strengthen the investigation and prosecution of corruption cases, so that the courts of first instance are able to improve the conviction rates."
He, however, also cautioned that any proposal to amend the PCA must be thoroughly scrutinized for its constitutional compatibility before it is enacted in the form of legislation. "One prominent suggestion is the inclusion of a statutory remedy that will enable confiscation of properties belonging to persons who are convicted of offences under the Prevention of Corruption Act. The rationale behind the same is that if a public official amasses wealth at the cost of the public, then the state is justified in seizing such assets. Similar enactments like SAFEMA in case of persons arrested under detention laws have not proved to be very successful," he said.
He also spoke on the "controversial issue" of separation of prosecution functions from the investigative functions of CBI saying the agency needs a specialized and dedicated team of lawyers. He asserted that CBI relying on government law officers and standing counsels to conduct prosecutions was the real problem.
Source - Times of India
Friday, September 11, 2009
In a Higher Court by Former Chief Justice of India J. S. Verma - Article from the Indian Express
Let me begin by commending Justice S. Ravindra Bhat of the Delhi high court for his excellent judgment of September 2, 2009 in the judges’ assets case, the quality of which would do credit to anyone at the highest level in the judicial hierarchy. It is remarkable also for the reason that it was prepared (evident from the postscript) when the Supreme Court judges (led by the CJI) were still dithering on the issue, before finally reiterating the full court’s earlier resolution of May 7, 1997 to this effect. Once again the high courts have shown the right path when the Supreme Court dithered, as it did during the infamous Emergency in the Habeas Corpus case. In that case, the later amendment of Article 359 of the Constitution to protect the non-derogable rights in Articles 20 and 21 even during an emergency corrected the aberration of the Supreme Court judgment, approving that of the nine high courts. In the present case, the strong public opinion, including eloquent support from within the judicial fraternity, shows Justice Bhat to be right. I wish the judicial verdict is accepted by the Supreme Court (led by the CJI) in good grace without any reservations.
The basic premise of the judgment in paras 46 and 47 is worth mention. It says: “It would be highly anomalous to say that in exercise of the legitimate jurisdiction to impact people’s lives, property, liberties and individual freedoms, as well as (to) interpret duties and limitations placed upon State and non-State agencies, barring the institutional accountability standards in the Constitution, judges have no obligation to disclose their personal assets, to someone or authority... All power — judicial power being no exception — is held accountable in a modern Constitution. Holders of power too are expected to live by the standards they set, interpret, or enforce, at least to the extent their office demands. Conventions and practices long followed, are known to be legitimate sources, and as binding upon those concerned, as the express provisions themselves.â€
These principles are unexceptional. It would be a pity if the judgment is not accepted in good grace and it is challenged in appeal by the Supreme Court, ultimately before itself! Any such course will further damage the judiciary’s image. This is not a matter in which the “doctrine of necessity†can apply.
Media reports quote Attorney General Goolam Vahanvati saying that the judgment would be challenged in appeal. As counsel appearing for the Supreme Court, his statement is assumed to be on instructions from the CJI. If true, it is unfortunate. I wish the Attorney General had drawn inspiration from his illustrious predecessors (names exclude the living) like M.C. Setalvad, C.K. Daftary, S.V. Gupte and Lal Narayan Sinha (who refused to argue for the Union government in the Habeas Corpus case during the Emergency) to candidly advise the CJI against any further reservations or challenge to the above judgment. That remains to be seen.
In my view, the only surviving issue now relates to the modalities and the procedure for declaration of assets by these judges, the custody of the declarations, and furnishing the information sought under the RTI Act. The judgment of Justice Bhat deals with this aspect also. The form of declaration and its custody are simple matters to be worked out by the concerned authorities. Section 8 of the act provides the manner of dealing with the request for information. If need be, that can be elaborated for clarity without destroying the object of the enactment — maximum disclosure, minimum confidentiality. These details need not detain us.
The one area of concern voiced by many judges who are in favour of disclosure needs mention. They want a safeguard against harassment by unscrupulous persons and disgruntled litigants who are known to make false and scurrilous allegations even against some honest judges for ulterior motives. Even though the apprehension is genuine, it has to be accepted as an occupational hazard, which is common to all public functionaries. Moreover, the additional contempt power is available to the judges as a deterrent. In any case, this aspect can be taken care of, and can not be a justification for not declaring the assets subject to public scrutiny for legitimate reasons. In the current environment of waning credibility of the higher judiciary, with specific allegations of corruption based on prima facie authentic materials even against a few of the highest, it is in the judiciary's own interest to be fully transparent and above suspicion.
In addition, I have a suggestion for consideration. To decide any dispute about the age, Article 217(3) provides the machinery in respect of a high court judge, and Article 124(2A) is the corresponding provision for a Supreme Court judge. A similar provision can be enacted to decide finally any controversy relating to the assets of a high court or Supreme Court judge by the President of India after consultation with a body constituted for the purpose. The composition of that body can be decided after a wide debate to obtain the distillate of public opinion, keeping in view the significance of the independence of the judiciary. My view is that the body should comprise only of judges, because adjudication of disputes is primarily a judicial function. If considered necessary, the vice president could chair that body, since that office is not identified with either the executive or the judiciary. The myth that judges cannot be trusted to decide against their own fraternity has been exploded in the removal proceedings against Justice V. Ramaswami, wherein the judge's committee found him guilty but Parliament let him off, and now by Justice Ravindra Bhat in the present issue, uninfluenced by Chief Justice K.G. Balakrishnanâ's contrary view voiced consistently through the media.
It is also necessary for the proposed legislation to provide that the final determination made in this manner in every case considered fit for inquiry by the President of India, as also in the cases rejected as not fit for inquiry, should be published to end the controversy. This procedure will protect the honest judges from vilification, while identifying the wrong ones, if any, for the logical follow-up action. This, in my view, is the way to ensure judicial accountability, with protection of the honest, which constitute the large majority.
The writer is a former Chief Justice of India
express@expressindia.com
Shared via AddThis
The basic premise of the judgment in paras 46 and 47 is worth mention. It says: “It would be highly anomalous to say that in exercise of the legitimate jurisdiction to impact people’s lives, property, liberties and individual freedoms, as well as (to) interpret duties and limitations placed upon State and non-State agencies, barring the institutional accountability standards in the Constitution, judges have no obligation to disclose their personal assets, to someone or authority... All power — judicial power being no exception — is held accountable in a modern Constitution. Holders of power too are expected to live by the standards they set, interpret, or enforce, at least to the extent their office demands. Conventions and practices long followed, are known to be legitimate sources, and as binding upon those concerned, as the express provisions themselves.â€
These principles are unexceptional. It would be a pity if the judgment is not accepted in good grace and it is challenged in appeal by the Supreme Court, ultimately before itself! Any such course will further damage the judiciary’s image. This is not a matter in which the “doctrine of necessity†can apply.
Media reports quote Attorney General Goolam Vahanvati saying that the judgment would be challenged in appeal. As counsel appearing for the Supreme Court, his statement is assumed to be on instructions from the CJI. If true, it is unfortunate. I wish the Attorney General had drawn inspiration from his illustrious predecessors (names exclude the living) like M.C. Setalvad, C.K. Daftary, S.V. Gupte and Lal Narayan Sinha (who refused to argue for the Union government in the Habeas Corpus case during the Emergency) to candidly advise the CJI against any further reservations or challenge to the above judgment. That remains to be seen.
In my view, the only surviving issue now relates to the modalities and the procedure for declaration of assets by these judges, the custody of the declarations, and furnishing the information sought under the RTI Act. The judgment of Justice Bhat deals with this aspect also. The form of declaration and its custody are simple matters to be worked out by the concerned authorities. Section 8 of the act provides the manner of dealing with the request for information. If need be, that can be elaborated for clarity without destroying the object of the enactment — maximum disclosure, minimum confidentiality. These details need not detain us.
The one area of concern voiced by many judges who are in favour of disclosure needs mention. They want a safeguard against harassment by unscrupulous persons and disgruntled litigants who are known to make false and scurrilous allegations even against some honest judges for ulterior motives. Even though the apprehension is genuine, it has to be accepted as an occupational hazard, which is common to all public functionaries. Moreover, the additional contempt power is available to the judges as a deterrent. In any case, this aspect can be taken care of, and can not be a justification for not declaring the assets subject to public scrutiny for legitimate reasons. In the current environment of waning credibility of the higher judiciary, with specific allegations of corruption based on prima facie authentic materials even against a few of the highest, it is in the judiciary's own interest to be fully transparent and above suspicion.
In addition, I have a suggestion for consideration. To decide any dispute about the age, Article 217(3) provides the machinery in respect of a high court judge, and Article 124(2A) is the corresponding provision for a Supreme Court judge. A similar provision can be enacted to decide finally any controversy relating to the assets of a high court or Supreme Court judge by the President of India after consultation with a body constituted for the purpose. The composition of that body can be decided after a wide debate to obtain the distillate of public opinion, keeping in view the significance of the independence of the judiciary. My view is that the body should comprise only of judges, because adjudication of disputes is primarily a judicial function. If considered necessary, the vice president could chair that body, since that office is not identified with either the executive or the judiciary. The myth that judges cannot be trusted to decide against their own fraternity has been exploded in the removal proceedings against Justice V. Ramaswami, wherein the judge's committee found him guilty but Parliament let him off, and now by Justice Ravindra Bhat in the present issue, uninfluenced by Chief Justice K.G. Balakrishnanâ's contrary view voiced consistently through the media.
It is also necessary for the proposed legislation to provide that the final determination made in this manner in every case considered fit for inquiry by the President of India, as also in the cases rejected as not fit for inquiry, should be published to end the controversy. This procedure will protect the honest judges from vilification, while identifying the wrong ones, if any, for the logical follow-up action. This, in my view, is the way to ensure judicial accountability, with protection of the honest, which constitute the large majority.
The writer is a former Chief Justice of India
express@expressindia.com
Shared via AddThis
Thursday, September 10, 2009
OUR INDIANS' MONEY - 70, 00,000 CRORES RUPEES IN SWISS BANK
This is a Mail that is being forwarded these days.....
1) Yes, 70 lakhs crores rupees of India are lying in Switzerland banks. This is the highest amount lying outside any country, from amongst 180 countries of the world, as if India is the champion of Black Money.
2) German Government has officially written to Indian Government that they (German Government) are willing to inform the details of holders of 70 lakh crore rupees in their Banks, if Indian Government officially asks them.
3) On 22-5-08, this news has already been published in The Times of India and other Newspapers based on German Government's official letter to Indian Government.
4) But the Indian Government has not sent any official enquiry to Germany for details of money which has been sent outside India between 1947 to 2008. The opposition party is also equally not interested in doing so because most of the amount is owned by politicians and it is every Indian's money.
5) This money belongs to our country. From these funds we can repay 13 times of our country's foreign debt. The interest alone can take care of the Center's yearly budget. People need not pay any taxes and we can pay Rs. 1 lakh to each of 45 crore poor families.
6) Let us imagine, if Swiss Bank is holding Rs. 70 lakh crores, then how much money is lying in other 69 Banks? How much they have deprived the Indian people? Just think, if the Account holder dies, the bank becomes the owner of the funds in his account.
7) Are these people totally ignorant about the philosophy of Karma?
What will this ill-gotten wealth do to them and their families when
they own/use such money, generated out of corruption and exploitation?
8) Indian people have read and have known about these facts. But the helpless people have neither time nor inclination to do anything in the matter. This is like "a new freedom struggle" and we will have to fight this.
9) This money is the result of our sweat and blood.. The wealth generated and earned after putting in lots of mental and physical efforts by Indian people must be brought back to our country.
10) As a service to our motherland and you contribution to this struggle, please circulate at least 10 copies of this note amongst your friends and relatives and convert it into a mass movement.
Earlier Post on this same Topic - here
1) Yes, 70 lakhs crores rupees of India are lying in Switzerland banks. This is the highest amount lying outside any country, from amongst 180 countries of the world, as if India is the champion of Black Money.
2) German Government has officially written to Indian Government that they (German Government) are willing to inform the details of holders of 70 lakh crore rupees in their Banks, if Indian Government officially asks them.
3) On 22-5-08, this news has already been published in The Times of India and other Newspapers based on German Government's official letter to Indian Government.
4) But the Indian Government has not sent any official enquiry to Germany for details of money which has been sent outside India between 1947 to 2008. The opposition party is also equally not interested in doing so because most of the amount is owned by politicians and it is every Indian's money.
5) This money belongs to our country. From these funds we can repay 13 times of our country's foreign debt. The interest alone can take care of the Center's yearly budget. People need not pay any taxes and we can pay Rs. 1 lakh to each of 45 crore poor families.
6) Let us imagine, if Swiss Bank is holding Rs. 70 lakh crores, then how much money is lying in other 69 Banks? How much they have deprived the Indian people? Just think, if the Account holder dies, the bank becomes the owner of the funds in his account.
7) Are these people totally ignorant about the philosophy of Karma?
What will this ill-gotten wealth do to them and their families when
they own/use such money, generated out of corruption and exploitation?
8) Indian people have read and have known about these facts. But the helpless people have neither time nor inclination to do anything in the matter. This is like "a new freedom struggle" and we will have to fight this.
9) This money is the result of our sweat and blood.. The wealth generated and earned after putting in lots of mental and physical efforts by Indian people must be brought back to our country.
10) As a service to our motherland and you contribution to this struggle, please circulate at least 10 copies of this note amongst your friends and relatives and convert it into a mass movement.
Earlier Post on this same Topic - here
Subscribe to:
Posts (Atom)