Farleys’ specialist Arbitration Team was retained to act on behalf of a prominent Businessman, R1.
R1 had commenced an action in the High Court against an international bank for damages in the region of $2 billion. A number of barristers had agreed to act for R1 on the basis that they would receive a share of any damages recovered by R1. Had R1 recovered $2 billion, the barristers would have been entitled to $165 million.
Although R1 was successful in his case, he was only awarded nominal damages of £1 by the court. R1 chose not to proceed with an appeal of the Judgment of the court and the barristers argued that this amounted to a breach by R1 of his agreement with them (a Damages Based Agreement) and as such, claimed they were entitled to be paid for their work on a hourly rate basis, at around £7.1 million plus interest, totalling £8.5 million.
The barristers commenced arbitral proceedings against R1 in February 2019 with the matter proceeding to a two-day hearing in May 2019. R1 denied any liability to the barristers on the premise that the Damages Based Agreement (which was prepared by the barristers) was unenforceable.
Farleys advanced robust legal argument on behalf of R1, including the analysis and construction of the relatively new legislation relevant to Damages Based Agreements.
Following the two-day hearing, the Arbitrator found favour with Farleys’ submissions and held that the Damages Based Agreement was not compliant with legislation and was accordingly, unenforceable against R1.