Alumni Matters 2023
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TP: I had thought I was going to join the Foreign & Commonwealth Office and applied at the end of my second year but didn’t get in. Then some friends, who had previously been at Oxford with me, one training to be a solicitor and the other a barrister, encouraged me to apply to City law firms. I think the real reason was they wanted someone else to share a flat in London with them!
I duly applied to various firms and chose Herbert Smith (as was) after an interesting interview. I was due to be seen by the recruitment partner, John Goble, but when I arrived to my surprise I was told he was abroad! The kindly receptionist told me to wait whilst she found someone, and then said I could see a Mr. Higginson. We had a very easy-going chat, and only later did I find out that he was the senior partner. He was really nice and I thought, if everyone is like him, it must be a good place to work.
TP: Litigation was my first seat. I worked under David Natali and with John Farr. I liked the people in the team very much and enjoyed the work and responsibility you got quite early on, such as arguing issues before High Court masters. I was less well-suited to spending my time poring over commercial contracts and M&A documentation, as you might do in corporate.
TP: Fortunately, David Natali, as well as having an encyclopaedic knowledge of High Court procedure, was a great strategic thinker. I watched him advise clients about what they wanted to achieve and the best way to get there. He was a brilliant mentor. But one of the things that I really learned from him in my early days came from working in the team led by him on two big trials. It was only by experiencing a long and complex trial – with all its ups and downs – that I really came to understand and make sense of all the procedural steps which preceded it.
TP: We certainly got more than our fair share of the most difficult cases – and we were always conscious that we were inheriting a terrific reputation which we could be a part of, both continuing it and hopefully making it even better. By the time I left, there were many good firms doing high-end commercial litigation in London, but when I started many of the big City firms wouldn’t really touch litigation or, if they did, litigation would be handled by clerks and junior solicitors, not by partners.
The other aspect of litigation that I really enjoyed was access to the senior people at clients, from the CEO down. As a young lawyer you could find yourself talking with people who were very eminent in their own fields but unfamiliar with the litigation process and the world in which it operates. You had to communicate clearly but also in a way that was enlightening without sounding patronising. It was an educational process, helping clients reach decisions on a properly informed basis.
TP: I had become a partner in 1987 and always wanted to work abroad. I asked if I might go to either our New York or Paris offices but instead was offered a chance to go to Hong Kong. So, in June 1989 Wendy and I went out for a recce.
TP: It certainly was. We were much taken with the place on first impressions, moving there in March 1990 with one child and another on the way. It was like going on a huge adventure. I took over from one of the litigation partners, the wonderful Robert Neill, who was returning to the UK.
TP: Well, in those days you got automatic admission on the basis of your English qualification. So, I was duly admitted as a Hong Kong solicitor but it required little more than a short attendance (suitably gowned-up) before a High Court judge in Hong Kong.
TP: This was the early 1990s and pre-globalisation, if I can put it that way. We did act for some international clients in Hong Kong, but our litigation clients were mainly local corporates and businesspeople involved in local disputes. It was challenging because not all disputed contracts were in writing or, if they were, clear in their intention. I was in Hong Kong first time round for five years, returning in 1995, but went back in late 2001 as Asia managing partner, for another four years or so.
TP: I was lucky the first time I returned from Hong Kong, because I returned to the same group that I had left. David Natali immediately handed over a bunch of cases which got me going straightaway, and then I had a great piece of good fortune. The firm was instructed by the Singapore office of the accountants Cooper & Lybrand (pre-PwC days) to advise on the ramifications of the Barings Bank collapse in 1995 – they had audited Barings’ Singapore branch where Nick Leeson worked – and I led the team in a big and complex auditors’ negligence case. So, coming back to London then was not difficult from a professional point of view.
TP: No, it wasn’t. Things had moved on in London and it took me about two years to rebuild my practice. It was not a comfortable feeling during that time, knowing that you were not contributing at the level you felt you should be. Later, especially when I was on the Partnership Council, I used to bang the drum about the need for us to be better at reintegrating those coming back to London, being more proactive about it, and I think the firm now does this much better than before.
TP: I remember vividly after I got back talking to people, reading reports and generally picking up the sense that there was going to be a big problem in the financial markets. I read a Banque de France report which said the problem lay with the exponential growth of assets under management in hedge funds and all the risks inherent in that. And that’s where many people expected a crash of some sort. But it turned out to be a problem with the banks and the severe contraction of liquidity in the global financial markets that originated in the US, driven by sub-prime lending and the US housing market. That’s really what gave rise to the crisis and introduced commercial litigators like me to the weird and wonderful world of credit derivatives! So, yes, lots of work stemmed from that, which for me included work deriving from the problems facing some of the UK’s biggest banks.
TP: Yes, but so far as I was concerned, it only needed light touch management, because the practice was so full of first-rate partners with excellent client relationships and great young associates in their teams. The main challenge was to maintain and grow our reputation in a world where there was much more competition for work than there had been historically. And a big issue in doing that was to help get people out of their silos and to create a more integrated firm, between different parts of the firm and even within Disputes itself.
TP: After I was back in the London office for the first time in 1997, I was asked by Edward Walker-Arnott, then the senior partner, to take on a role as Executive Partner. That meant having responsibility for all the firm’s back-office functions, such as HR, finance, marketing and so on. I did that for about five years and was very impressed with the operations and the quality of the people who supported the lawyers. I also sat on the Partnership Council for a number of years. So the short answer is, unlike many people, I did rather take to management. But I also enjoyed the client work and felt I was able to do both.
TP: Almost unintentionally! I had been with the firm for 38 very happy years. But I was turning 60 and I had got to the stage where I thought, if I am going to do anything else, I had better do it now. Then, by chance, I got a call from a headhunter with information about the job at the FCA. This involved financial regulation about which I really knew very little; after all I was essentially a commercial litigator with some banking experience, and thought I was bound to be rather low on the list of desirable candidates. However, I was interested in the process, so said I would throw my hat into the ring. I enjoyed the interviews and then, to my great surprise, I was offered the job! It was a real wrench, though, to leave the firm and the people I had worked closely with for so long – including the brilliant young partners like Chris Bushell who you could see were going to be the stars of the future.
TP: Well, I had to learn fast, but you are right, I was able to get to grips with a new area of law – and I had (and have) fantastic support at the FCA, which is now coincidentally chaired by Ashley Alder who had been a partner out in Hong Kong, when I was there. I have been at the FCA for nearly eight years and enjoyed it a lot. The RDC is a group of about 15 senior and experienced people from the financial services industry and related professions. We work in panels of three and, while we are a committee of the FCA Board, we are operationally independent of the FCA. In contested cases, we decide on the FCA’s behalf whether enforcement action will be brought against a financial services firm or its employees and, if so, what the appropriate penalties should be.
TP: The FCA’s Enforcement division brings the case to us and we are responsible for deciding whether it should go forward or not. If it does, the case with its related papers goes to the individual or the firm in order to get their side of their story. At this stage ‘representations’ can be made to us in writing and at an oral representations ‘meeting’ – they are not called hearings as they would be in court (since we’re not judicial decisionmakers) - after which we decide whether the proposed action is justified and, if we do, what the appropriate penalty should be. That can range from fines to imposing prohibitions on people, effectively banning them from working in the financial services industry.
What we are looking at, essentially, is people’s conduct, and that usually requires us to consider why people were doing what they were doing – was it deliberate, negligent or reckless? That can be challenging. You have to reach decisions based on the evidence before you but the evidence may only take you so far in some of the situations we are dealing with. So we often have to draw reasonable inferences from the facts we do know and decide contested matters on the balance of probabilities. That certainly requires much thought and care.
TP: That can be true and you can see it starkly in the new and innovative areas of finance, such as crypto. The regulators everywhere really have been struggling to work out how best to respond to the challenges which crypto has brought to the surface.
TP: From a personal point of view, the pressure I feel is more from wanting to get it right. We are taking decisions that affect individuals, perhaps irreversibly. It’s a different sort of stress from working in private practice where you want to do the best job you possibly can for your client, but there you are not the ultimate decision-maker.
TP: I will be at the FCA till the autumn of next year which will mean very nearly nine years in the job. When I finish, I am ever-hopeful of having more time to travel, paint, read and get back on to the tennis court – at least that’s what I tell Wendy!
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