Rangers, Sevco and the Law – Threatened Court Actions – Duff & Phelps v BBC

Following the BBC Inside Story, Part 2, recently it was made clear by Duff & Phelps that they were poised to embark on court action against the BBC.

As the Scotsman reported on 24^th May, “RANGERS administrators Duff & Phelps last night threatened to sue the BBC over claims a senior partner in the firm was aware of Craig Whyte’s scheme to buy Rangers using cash from the controversial Ticketus deal.”

The piece quoted the statement from Paul Clark which said:-

“The allegations made in tonight’s programme against Duff & Phelps are untrue, a distortion of the facts and highly defamatory. Discussions are already underway with our solicitors with a view to bringing legal proceedings against the BBC.

 “We made a number of offers to assist the BBC in order they would not make the fundamental errors broadcast this evening and for some inexplicable reason the reporter Mark Daly declined these.

“We had also hoped to give interviews stating our case on camera but received strong legal advice against this course of action, bearing in mind the legal proceedings Duff & Phelps have raised against Collyer Bristow. The BBC were informed in writing from our solicitors.”

Last week D+P claimed that the independent expert, Roger Isaacs, consulted by the BBC and who had appeared on the programme had changed his position, following sight of documentation from D+P. Mark Daly of the BBC denied that was the case, stating that Mr Isaacs, who had been scathing about D+P’s actions and especially the “conflict of interest point” had not changed his stance.

In Mr Clark’s statement he referred to Mr Isaacs, saying:-

“We are also hugely disappointed with the irresponsible comments made by Mr Roger Isaacs who is clearly not in possession of the facts.”

This led to the possibility that, along with the BBC, Mr Isaacs would be on the receiving end of a writ for defamation or libel. For D+P to approach Mr Isaacs to give him what they described as more information seemed an interesting tactic. Clearly if one of the main witnesses for the BBC was to admit he was wrong, this could have a bearing on any court action pursued by D+P.

As the BBC reported last week:-

“In a letter seen by the BBC from Roger Isaacs to Duff and Phelps following a meeting between the two parties, Mr Isaacs states: “At the meeting you made various representations and offered to send me further documents to support them.

“I have now had a chance to consider these and you should please be aware that I have not been persuaded that Duff and Phelps had no knowledge of the Ticketus deal to fund the purchase of the bank debt.”

Mr Isaacs adds: “My view remains, on the basis of the information I have, that Duff and Phelps appear not to have been able to fulfil the necessary requirements of independence to allow them to act as administrators”.

A month has passed and, at least publicly, there has been no action raised by D+P, Mr Clark, Mr Whitehouse or Mr Grier.

I find it interesting that no action has yet been raised by them, despite the threats to do so immediately. As far as libel or defamation proceedings against the BBC go, these were serious allegations about the competence and potentially integrity of D+P and its partners. They did not have to wait until after broadcast to raise court action. Indeed, with the rights of privacy under the Human Rights Act, there is often a case for seeking an interdict or injunction to stop publication of the article or programme complained of in advance.

As this is a case where, according to D+P the BBC knew their complaints prior to broadcast, then once the credits had rolled, one would have expected a writ to follow by return. In addition, there would have been no doubt that this action would be raised in the High Court in London. People with even the most tangential connection with England try to get their cases heard there. They are known as “libel tourists”. Notorious cases where publications with only minuscule circulations in England have been successfully sued there have led to demands to change the laws, and in the USA for example, moves to make English libel awards unenforceable there.

Why is England a good place to sue for libel? Firstly, even though awards of damages have been restricted from years past, they are still much higher than in other jurisdictions, including Scotland. Secondly, it makes far more financial sense for the client, and for his lawyers, to pursue a libel case in London, rather than a defamation action in Edinburgh. The BBC programme was shown, or was available to be seen, in England, and the BBC is based in London. There is no jurisdictional reason not to pursue the case in London.

High Court libel proceedings in London are far more costly than defamation proceedings in the Court of Session. Although presently subject to review, “no win-no fee” agreements are very common in libel cases in England, and presumably D+P and their partners could seek to utilise them. “No win no fee agreements” save the client funding the claim up front, and protect them against costs if unsuccessful. The successful lawyer can also recover an enhanced fee from the defendant, increasing their recovery by up to 100%.

In Scotland, cases can be pursued “no win, no fee”.  The costs payable to the successful lawyer are far less, and whilst there can be uplifts of fees; they are far less than in English cases. There is little point in pursuing a defamation case in Edinburgh, if you can sue in England. Firstly any damages awarded will be higher, and secondly the greatly inflated costs make it far more likely that the defendant would settle.

As far as no win, no fee arrangements are concerned, the website of Carter-Ruck, leading libel lawyers, makes clear what they need to go ahead. The following are the factors they consider:-

The claim needs to be of a sufficient value or involve a fundamental right or important principle;

We need to be satisfied as to the merits of the potential claim; and

We need to be satisfied as to the opposing party’s ability to pay any damages and/or costs orders.

If we do not feel able to offer a CFA, we may be prepared to consider offering a differential fee arrangement, whereby we will charge reduced hourly rates as the litigation progresses and enhanced rates if, and only if, the case is won.

Presumably D+P’s solicitors would think the claim is worth enough money – after all, these are serious accusations against a worldwide professional firm. In addition, the BBC can pay an award of damages.

Does this suggest therefore that D+P’s lawyers not satisfied as to the merits of the claim? The programme seemed to me to be framed very carefully, and the issues raised regarding potential conflicts of interest have now been picked up by Lord Hodge who has required a detailed account by D+P. The judge said “”There is considerable public interest in this jurisdiction in relation to the administration. I do not want the administration to come to an end without having received that report.”

It is a repetition of history here. On many occasions Craig Whyte threatened court actions against the BBC in particular and against other parties. None was ever raised until, apparently, just before Rangers entered administration. That action seems to have died a death without seeing the inside of a courtroom.

D+P might now view the order from Lord Hodge as a way out of a mess. Rather than having to fight the BBC, they have the chance to present their case to the court with less fear of a substantial contradictor. However Lord Hodge will be full of relevant and probing questions for the administrators if he feels there is any suggestion of impropriety, and bluster about legal actions will not stop him exploring the issue in detail.

The report is due to the court in just over two weeks and we shall see what arises after that.

 

Posted by Paul McConville

 

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