UK SFO settles ENRC lawsuit over abandoned corruption probe

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SFO-ENRC lawsuit settlement

Highlights

UK Serious Fraud Office settled a $168mn lawsuit with ENRC, Dechert, and Neil Gerrard, with £15.4mn set aside for the civil action.
The SFO's probe into ENRC, launched in 2013 and abandoned in 2023, was ruled by the High Court to have involved official misconduct and unauthorised leaks.
Mr Justice David Waksman found in 2022 that Gerrard instigated media leaks and SFO breached duties by accepting confidential information, intensifying reputational damage.

Settlement ends years of litigation

As reported by Financial Times, the UK’s Serious Fraud Office has settled a $168mn lawsuit brought by Eurasian Natural Resources Corporation, with the deal also covering law firm Dechert and former partner Neil Gerrard. Financial terms have not been disclosed, although the fraud agency says in its latest annual report that it had set aside £15.4mn for the civil action.

ENRC had sought what it called fair compensation for losses linked to the SFO investigation into alleged fraud, bribery and corruption, which began in 2013. The agency abandoned that probe in 2023, saying there was insufficient admissible evidence to prosecute, and a follow-up trial on damages took place earlier this year before the parties reached a settlement ahead of judgment.

The case had become a major setback for the SFO after the High Court found wrongdoing around the launch of the investigation. A judge ruled in 2023 that the probe would not have been opened without misconduct by the SFO, while earlier findings also held Gerrard liable for unauthorised meetings and leaks of confidential information.

Reputational fallout for the SFO

The dispute stretches back about 15 years, when ENRC asked Gerrard to examine allegations of misconduct at one of its subsidiaries. On his advice, the miner voluntarily shared some findings with the SFO between 2011 and 2013, before later dismissing Gerrard and Dechert over what it said were damaging media leaks and undisclosed contacts with prosecutors.

Mr Justice David Waksman found in 2022 that Gerrard had instigated leaks to expand his firm’s work and passed confidential information to the SFO without client authorisation. The judge also holds that the SFO breached its duties by accepting that information, deepening the reputational damage to an agency that is trying to rebuild credibility after several high-profile failures.

Matthew Wagstaff, the SFO’s director of legal services, says the misconduct identified between 2011 and 2013 could not happen again because the organisation has overhauled its governance, oversight and safeguards. ENRC, now renamed Eurasian Resources Group, and Dechert say the proceedings have concluded on confidential terms, while Gerrard has previously denied leaking confidential material or inflating legal work.

In our earlier article on the SFO’s confidential settlement with Eurasian Natural Resources Corporation (ENRC), we explained how the agreement brought to an end a long-running damages dispute also involving Dechert and former partner Neil Gerrard. We noted ENRC’s claims that the abandoned 2013 fraud probe caused significant losses, and highlighted High Court findings that criticised how unauthorised confidential information and leaks were handled before the investigation was dropped in 2023.

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