Nicola Sharp of business crime solicitors Rahman Ravelli believes we may see many more such cases.
The prominent businesswoman Amanda Staveley, who is suing Barclays for up to £1.5 billion, has claimed the bank’s actions contributed to her firm being forced off a deal with huge financial consequences.
Ms Staveley’s client, Sheikh Mansour bin Zayed Al Nahyan of Abu Dhabi, invested £3.25 billion as part of emergency fundraising for the bank 12 years ago. But she claims that Barclays was secretly offering better terms to its largest investor, the state of Qatar.
She is alleging that this saw her firm, PCP Capital Partners, ousted from the deal as an investor, meaning it could only collect £30M in gross advisory fees. Lawyers representing Barclays have described the damages claim as speculative and opportunistic.
Ms Staveley’s witness statements have claimed that the then Barclays chairman of investment banking Roger Jenkins had “lied” to her about the terms for Qatar’s investment in the bank. She accused Barclays of offering her “manifestly worse terms”, as Qatar received £346M in fees plus an unsecured £2 billion loan.
There has been a lack of successful criminal prosecutions surrounding financial institutions and individuals in relation to the 2008 financial crisis. This has led to an increase in civil litigation. This case is a perfect and very high-profile example of how civil litigation is seen as the best option for those who feel they have been wronged.
There are, of course, advantages to seeking redress through civil litigation rather than trying to pursue a criminal investigation through the authorities. The burden of proof is lower in civil law cases and the ability to recoup losses is much greater.
It is inevitable, therefore, that there will be another increase in civil fraud litigation following the coronavirus pandemic.