2012 saw the culmination of the epic legal battle between Russian billionaires Boris Berezovsky and Roman Abramovich. Suzanna Ring charts the dispute and interviews key advisers about their experiences in one of most dramatic civil cases in legal history

In 2009, a hacker known as 'Igor' managed to get hold of some highly sensitive documents that have gone on to play a crucial part in one of the most headline-grabbing disputes of recent times – Boris Berezovsky's multi-billion dollar battle with business rival and Chelsea Football Club owner Roman Abramovich.

Igor delivered the documents to a flat in Sloane Square belonging to Abramovich where, in his absence, a servant opened the package. 

On realising what it contained – notes of meetings and witness statements relating to Berezovsky's claim against his former friend – the package was immediately sent to Abramovich's lawyer and friend, Skadden Arps Slate Meagher & Flom European head and Chelsea FC chairman Bruce Buck, who then returned the papers unopened to Berezovsky's lawyers. 

The episode may read like something from a bad mafia novel, but it is a true account of the early days of the world's largest private client action – proceedings that have provided a tantalising glimpse behind the veil of 1990s post-Soviet Russia. 

In that world, three men agreeing multi-billion dollar deals in hotel rooms without documentation was considered the norm. For those taking on the litigation some 15 years later, though, it meant something of a baptism of fire. 

A change of guard

When Addleshaw Goddard secured the appointment as Berezovsky's new legal adviser in December 2008, it became the third firm to represent Berezovsky within 18 months of him formally launching the claim, with Carter Ruck taking on the initial instruction in early 2007, before being replaced by Cadwalader Wickersham & Taft in December that year.

"I remember it very well," comments Addleshaws litigation partner Mark Hastings. "It was late November 2008 when we got a call from a set of chambers [Essex Court] that we work closely with, asking if we were able to act for Berezovsky. We said we'd be delighted to. We then visited Boris and his team at his Mayfair offices."

The case concerned claims by Berezovsky that he had been coerced by Abramovich to sell his stake in Russian oil company Sibneft at a significant undervalue, and that Abramovich had sold his shares in Russian aluminium company Rusal without his consent. In addition, in mid-2008 Berezovsky issued a second set of proceedings, after his former friend Badri Patarkatsishvili died in February 2008, claiming that Patarkatsishvili's family held assets in which he had an interest. 

The Patarkatsishvili case was passed on to Stephenson Harwood before Addleshaws took on the Abramovich case, with Signature Litigation partner Graham Huntley, then a partner in legacy Lovells, representing the Patarkatsishvili family. 

The year laid the groundwork for what was to become an epic fight between two of the world's most famous oligarchs and, despite his many previous visits to the English courts, a whole new scale of litigation for Berezovsky.

Strike-out success

By the end of 2008, Addleshaws had put together a team – comprising partners Hastings, John Kelleher and former Addleshaws partner Pietro Marino (now at boutique Enyo Law) – to fight Abramovich's strike-out application.

The first thing the Addleshaws team did was to instruct counsel, with One Essex Court's Laurence Rabinowitz QC brought in on a beauty parade for approval by the oligarch. Berezovsky gave approval, gifting Rabinowitz a £1.7m brief fee. 

The team then started preparing for the strike-out scheduled for spring 2009, where they would outline their argument in front of Mr Justice Colman. On such a high-stakes case as this, preparation involved more than legal work. Over Christmas in 2008, Marino says he bought and read 10 books on Russian history to ensure he fully understood the politics of what they were dealing with.

"The work on the defence of the strike-out application was tremendously intense. The whole team was working around the clock," says Hastings.

Adding to the pressure, the crossover between the two cases, Abramovich and Patarkatsishvili, resulted in Addleshaws taking over the Patarkatsishvili case from Stephenson Harwood at Berezovsky's behest in May 2009.

After the previous hacking experience, the Addleshaws' team knew this was no ordinary litigation and set about implementing precautionary measures to protect the firm.

Hastings says: "We implemented heightened measures of IT security. We actually went as far as installing a separate secure server so that any case-related emails went through it, ensured that all hard copy documents were securely shredded and sensitive information was not casually emailed."

Given Berezovsky's profile and the enemies he has made from his open opposition to Russian president Vladimir Putin, the lawyers frequently found themselves receiving emails that appeared to be from Berezovsky and his team, but which, when they checked the address of the sender – a convoluted mixture of letters, numbers and symbols similar to Berezovsky's real address – a slight difference would reveal it to be from a hacker.

 One lawyer on the case talks of how he received a number of death threats, which "particularly when you have children was very concerning". The threat of rooms being bugged and documents tracked down meant the teams also had to at times meet in car parks.

The initial hurdles were worth it, though, and in March 2010 Abramovich's application to have the proceedings struck out failed. 

But this did not mean it was going to be an easy ride ahead. Ruling on the strike-out proceedings, Colman stated that the "complexity and multiplicity of issues" meant the claim could not be thrown out – also implicitly indicating it was going to be one hell of a fight.

Marino says: "I was quietly optimistic that we had done enough to win the strike-out. Abramovich had gone for a high-risk strategy to avoid dealing with difficult questions, but the evidence was mounting in our favour and the fabric was in place for a substantial fight at trial. But, of course, getting past the strike-out was not easy and nothing was taken for granted." 

In a token of appreciation that was to become commonplace over the next two years, Berezovsky's lawyers were treated to a meal from one of London's most prestigious and expensive restaurants, Nobu, at the oligarch's offices following the ruling.

Preparing for appeal

But if the ruling on the strike-out application signalled the way forward, it certainly did not mark any let-up for either side's lawyers, who were to meet in court a dozen times over the next six months as they settled costs associated with the strike-out as well as the upcoming trial.

In July 2010, the two cases were united under one case management hearing in front of Mrs Justice Gloster and Mr Justice Mann to discuss the level of overlap and how certain issues were going to be dealt with. Never before in UK litigation had two case management hearings been rolled into one, marking one of a number of firsts for English litigation that were to arise from the dispute. The trial was also the first totally paperless hearing in the UK, as well as the first to be heard in London's new Rolls Building.

In late 2010, the Addleshaws team also faced its own challenge internally, with Marino announcing his departure as part of an 11-strong defection from the firm's litigation practice to launch Enyo Law. Speculation at the time over the possibility of the Berezovsky case going with Marino was rife. 

But in light of all the risks associated with a new start-up, Berezovsky decided to remain with Addleshaws.

Life on hold

And, as the months passed and the lawyers worked towards Abramovich's appeal of the strike-out scheduled for January 2011, and the trial scheduled for October 2011, the life that came alongside acting for a Russian oligarch became increasingly normal for Berezovsky's legal team. 

Hastings reflects: "When you're dealing with a private client, it is a very different relationship to when you're dealing with an institutional client. You have a much closer, much more personal relationship. You can often get a call at weekends asking if you can meet in Mayfair at short notice. It goes with the territory."

The team also had to fly all over the world to interview witnesses, prompting issues with passport stamps at odds with entry to certain countries due to political conflicts. 

Acting for the other side, Skadden partner Karyl Nairn paints a similar picture: "It is true that wealthy Russians are used to 24/7 availability from their legal team, but so are many other clients. If I had to single out special features, security concerns do add an extra dimension as well as the fact that there are many competing urgent demands for their time. 

"This means that extra flexibility is required, meeting times and places can be rescheduled at the last minute, and you try to grab time whenever you can. Busy, successful people are used to people mobilising around them quickly and you need to accommodate that too. Even where you don't log off yourself until 3am, you still worry that you might be letting a client down overnight."

She adds: "One of the difficulties with acting in a long and complex trial case such as this is that you do not have much time to spare for unexpected issues for other clients and colleagues. 

"Associates can be assigned exclusively to a case, but it is harder for partners in City law firms to do this for protracted periods of time. 

"You need a bit of luck and have to make sure that you are organised enough to handle everyone's demands whenever they arise. I would always have a back-up 'Plan B'. And a 'Plan C' (which usually involved my husband having to be Superman at home). When you're in trial mode, your private life tends to be put on hold."

Yet despite all of the turmoil surrounding the case and the difficulties of dealing with an exiled man embroiled in endless legal battles, when you speak to Berezovky's lawyers they all talk with affection for him. 

One lawyer says: "Before I met Berezovsky, I had always regarded him as a bit of a controversial guy. But you cannot fail to see that he is a force for good more than anything else.

"He has been a very important figure in the Russian emigrant community in London around whom the anti-Putin forces gravitate. He has been an important mouthpiece for the truth."

"I blame my lawyers"

Unfortunately, this was not the view portrayed by Gloster when the case finally reached trial.

"I found Mr Berezovsky an unimpressive, and inherently unreliable, witness who regarded truth as a transitory, flexible concept, which could be moulded to suit his current purposes.

"At times the evidence he gave was deliberately dishonest; sometimes he was clearly making his evidence up as he went along in response to the perceived difficulty in answering the questions in a manner consistent with his case," she stated in her judgment of the Abramovich case. 

She added that his "I blame my lawyers" excuse was not convincing, in reference to a lack of responsibility she believed he had taken for the outcome. Her portrayal is in stark contrast to the impression of the man provided by his legal advisers.

Nairn adds: "We knew from the beginning that Berezovsky's claims were a fabrication, and seeing Berezovsky's lawyers and the story change so much over time simply served to reinforce that. Rabinowitz is a wonderful barrister, but there was nothing he or anyone else could have done following Jonathan Sumption's devastating cross-examination of Berezovsky. 

"It was satisfying for all our team to watch Berezovsky's case slowly unravel during the trial. We did not take anything for granted, though. There was too much at stake and our team worked incredibly hard right until the final submissions."

The case, which saw Berezovsky's claims against Abramovich wholly dismissed in August 2012 with a subsequent order to pay £35m in legal costs to his Russian rival, by the end seemed like it could only go one way. 

While it was always going to be complex given the heavy reliance on oral evidence based on events 15 years earlier, Berezovsky's insistence on giving evidence in his not entirely fluent English against the strong execution of Abramovich's testimony and response to questioning left the outcome somewhat inevitable according to some who sat through the case. 

But in his usual fashion, Berezovsky was not afraid to give his opinion on the judgment, stating outside the court: "Churchill said that democracy is bad, but there's nothing better. I was going to say an English court is bad, but there's nothing better. Today I have doubts about whether that's accurate. Sometimes I have the impression that Putin himself wrote the judgment."

However, the result in the subsequent Patarkatsishvili proceedings was more successful, handing Addleshaws a success fee of £15m after the case settled. 

At the end of the weekend-long negotiations to settle the Patarkatsishvili case, Berezovsky came to the offices to sign the settlement at around 10pm on the Sunday night. He then waited downstairs to congratulate the team with two bottles of Dom Perignon 1985 (up to £300 a bottle) and a group photo.

While Berezovsky has already reappeared in the courts post-Abramovich and Patarkatsishvili, with some of the same lawyers still representing him, the experience has been one many of the lawyers dubbed the highlight of their career. 

Or, as one comments: "It was a totally different world. It's like something out of a movie."

———————————————————————————————————————————————-

Berezovsky timeline

June 2007 Carter Ruck files claim in the High Court for Boris Berezovsky on his case against Roman Abramovich

October 2007 Berezovsky serves writ on Abramovich

December 2007 Cadwalader Wickersham & Taft takes over the case for Berezovsky from Carter Ruck

February 2008 Badri Patarkatsishvili dies and Berezovsky launches case against family 

September 2008 Stephenson Harwood takes over Patarkatsishvili case

December 2008 Addleshaw Goddard handed Abramovich case

May 2009 Addleshaws takes on Patarkatsishvili case from Stephenson Harwood

July 2009 First hearing for Abramovich's application to strike out the proceedings and/or for summary judgment in front of Mr Justice Colman

November 2009 Second hearing for strike-out

March 2010 Strike-out rejected by Colman

July 2010 Conjoined case management hearing for both Abramovich and Patarkatsishvili in front of Mrs Justice Gloster and Mr Justice Mann

October 2010 CFA agreed

January 2011 Abramovich appeals strike-out judgment 

February 2011 Strike-out dismissed

October 2011 Trial starts in front of Gloster

August 2012 Judgment handed down with Abramovich successful

September 2012 Patarkatsishvili settled

October 2012 Costs hearing

———————————————————————————————————————————————-

The cost of war – the CFA

One of the many reasons the Berezovsky v Abramovich case has received so much attention, at least in the legal world, is a result of Addleshaws' unconventional use of a conditional fee arrangement (CFA) pay structure.

Usually reserved for clients lacking in funds but with strong claims, the use of a CFA for a billionaire oligarch did not seem to add up, appearing initially to be more of a statement of Addleshaws looking to make sure it retained the case than a progressive approach.

However, the £15m success fee the firm attained in the end from the Patarkatsishvili case put paid to any negative speculation touted around the market by its rivals.

According to a number of litigators across the City, the offer of a 10% discount on large litigation cases is normal practice. However, according to some close to the case, with the large and regular payouts needed to run a case of this size – expected to sometimes run into the millions across a space of a few months – would have likely informed Addleshaws' and the client's decision to offer a more flexible deal with the possibility of a greater upside.

Addleshaws partners operate an average charge-out rate of £500 per hour. The firm's CFA with Berezovsky meant it agreed to act on a 50% fee basis for all of the work, with a 100% uplift if successful, doubling the firm's hourly rate in the case of a win.

Addleshaws received around £50m in fees from its representation of Berezovsky over the past four years, while the Bar also received around £20m in fees – the majority of which went to Brick Court, One Essex Court and Fountain Court Chambers.

———————————————————————————————————————————————-

Berezovsky/Abramovich advisers

Berezovsky

Carter Ruck – head of media law Andrew Stephenson

Jeffrey Gruder QC – Essex Court Chambers

Cadwalader Wickersham & Taft – litigation partner Michelle Duncan (now at Paul Hastings)

Barbara Dohmann QC – Blackstone Chambers

Addleshaw Goddard – litigation partners Mark Hastings, John Kelleher and Pietro Marino (Marino now at Enyo Law)

Laurence Rabinowitz QC – One Essex Court Chambers

Richard Gillis QC – One Essex Court Chambers

Abramovich

Skadden Arps Slate Meagher & Flom – global co-head of dispute resolution Paul Mitchard QC and disputes partner Karyl Nairn

Andrew Popplewell QC – Brick Court Chambers (appointed High Court judge July 2011)

Jonathan Sumption QC – Brick Court Chambers (appointed Supreme Court judge January 2012)

Helen Davies QC – Brick Court Chambers

Berezovsky/Patarkatsishvili advisers

Berezovsky

Cadwalader Wickersham & Taft – litigation partner Michelle Duncan (now at Paul Hastings)

Barbara Dohmann QC – Blackstone Chambers

Stephenson Harwood – head of commercial litigation John Fordham

Gordon Pollock QC – Essex Court Chambers

Addleshaw Goddard – litigation partners Pietro Marino (now at Enyo Law), Mark Hastings and John Kelleher

Mark Howard QC – Brick Court Chambers

Laurence Rabinowitz QC – One Essex Court Chambers

Mark Hapgood QC – Brick Court Chambers

Patarkatsishvili

Debevoise & Plimpton – chair of European and Asian litigation Lord Goldsmith QC

Hogan Lovells – litigation partner Graham Huntley

Jonathan Adkin – Serle Court

Signature Litigation (spin-off from Hogan Lovells) – litigation partner Graham Huntley

Michael Brindle QC – Fountain Court