11 October 2016Print This Post

Client who refuses to pay third-party funder what he owes sentenced to jail for contempt

High Court: breaches were deliberate and premeditated

High Court: breaches were deliberate and premeditated

A client of third-party litigation funder Therium, who has refused to repay what he owed it from the damages he secured and has gone on the run to avoid doing so, was last week sentenced to 21 months in jail for contempt of court.

The sentence followed a ruling by Mr Justice Popplewell finding businessman Guy Brooke guilty of contempt on several grounds. The maximum sentence was 24 months.

The judge said: “The breaches were deliberate and premeditated and part of a calculated and sustained defiance of the authority of the court.”

Further, he found the contempt “aggravated by the lack of remorse and the public defiance”, as displayed in a recent article in The Sunday Times, in which Mr Brooke openly admitted his intention of keeping out of the reach of Therium by moving regularly “from country to country, from rented flat to rented flat”.

Mr Brooke was a shareholder in a company which successfully sued Dutch law firm De Brauw Blackstone Westbroek for professional negligence. To pursue the quantum stage of the claim, Mr Brooke needed litigation funding, and set up a new company called Cable Plus in the Dutch Caribbean island of Curacao.

Mr Brooke had agreed that in return for £1m in funding from Therium, he would pay the proceeds of successful litigation into the client account of his London law firm, Kemp Little.

He was awarded €3.4m by a Dutch court last summer, and a further €400,000 through a subsequent settlement – a tenth of what he had hoped for, and less than the £4m he owed Therium (made up of a £3m contingency fee and repayment of the £1m).

The judge said Mr Brooke was “disappointed and dissatisfied” by the amount awarded by the court and “deliberately kept” the fact and amount of the settlement secret from Therium until disclosure was ordered by the High Court in April this year.

He failed to pay the litigation proceeds into the Kemp Little account, as was “clearly required” under the terms of the litigation funding agreement, and gave no “satisfactory explanation” for his failure.

Popplewell J said Mr Brooke, aged 78, could be “seen to have been dishonest and/or misleading in a number of respects throughout the history of the dispute”.

Mr Brooke had “secretly arranged” for the claim proceeds to be sent to Curacao, “even though he knew that he was not entitled to do so” and “persistently failed, despite repeated requests” to tell Therium what had happened to the money until ordered to by the court.

“In his first affidavit he gave as his address what purported to be a residential address in Taunton, but turned out to be a rented mailbox whose operator had been specifically instructed by Mr Brooke not to sign for any letters sent there. His second affidavit gave his address as ‘no fixed abode’.

“His third ‘affidavit’ was not sworn. He has consistently declined, without good reason, to reveal his whereabouts. I am therefore cautious of attaching weight to Mr Brooke’s uncorroborated assertions especially where they are contrary to the inherent probabilities.”

Popplewell J said Therium applied to commit Mr Brooke to prison for a number of contempts of court, including a failure to comply with various court orders made between April and July 2016.

The judge said Mr Brooke did not attend the High Court hearing in August this year, and instead sent an email on the eve of the hearing saying he was “unable to travel to attend for medical reasons”.

Counsel for Mr Brooke made an application for adjournment on his behalf, but the judge concluded that he was “unwilling to attend, not unable to do so” and rejected the application.

Mr Justice Phillips had ordered the litigation proceeds to be paid into the Court Funds Office in April this year, and when Mr Brooke failed to comply, Therium issued its application for committal for contempt.

Ahead of the sentencing hearing, Mr Brooke’s direct access barrister, Simon Williams, emailed the judge’s clerk a copy of a report on the businessman’s medical condition, but did not copy it to Therium or its lawyers.

Popplewell J said: “That was an entirely improper approach to take. It will very rarely be appropriate to put material before the court which is relevant to the substance of an application, without making it available to the other side. This is not such a very rare case…

“It is doubly wrong for material to be sent to the judge, in the way which Mr Williams did, without even alerting the other side to the fact that such a course is being taken.

“I therefore responded through my clerk to Mr. Williams, making clear that this course was inappropriate, alerting Therium’s advisers to the fact that it had taken place, and explaining that I had not looked at the attached medical report.

“Following that, the medical report was made available to Therium’s advisers. The request that I consider it without it being provided to them was withdrawn and no objection was taken to it being put before me. I have, therefore, read it. Mr Williams has apologised for the course he took.”

Mr Brooke was reported by the Daily Mail last week to be “on the run in Europe”.

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