Freshfields Bruckhaus Deringer has dropped its costs claim against former partner Peter Bloxham, following his announcement today (21 November) that he will not appeal an age-discrimination ruling acquitting the magic circle firm.
Freshfields responded to Bloxham’s statement that he would not be taking his case further by saying: “In order to put this matter behind us, the firm will not be pursuing the claim to recover a portion of its costs, which we had to register by 10 November to reserve our position.”
Dawsons, the solicitors for Freshfields’ former head of restructuring, said they “consider there are potential grounds of appeal regarding a number of legal and factual submissions which have not been addressed (fully, or in some cases at all) by the Tribunal” but that Bloxham is “mindful that any appeal to the Employment Appeal Tribunal may well be protracted and may not bring the case to an end for either party, whatever its outcome”.
Freshfields responded: “We have regretted the pursuit of this claim by a former partner of the firm and are pleased that this case is now closed.”
Freshfields set the ball rolling on a costs claim with the Central London Employment Tribunal at the beginning of the month. Market estimates had put the costs of the case somewhere between £250,000 and £500,000, but the as firm was only claiming costs on the points which it believes are misguided, meaning the potential pay-out was likely to be far smaller.
Following the firm’s push for costs, after another former partner, Lois Moore, dropped a similar age discrimination case against the firm.
The claims of both former partners relate to controversial changes made last year to Freshfields’ pension scheme, which saw retiring partners granted less generous terms than under the previous system. Partners were given the option of either accepting the reduced terms or retiring from the partnership in order to retain the greater benefits of the earlier arrangement.
On both cases Freshfields turned to Lewis Silkin, while Moore was represented by Herbert Smith senior partner David Gold.
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In many ways it is not surprising that Freshfields have decided to drop their claim for costs – a) it would cost an arm and a leg and b) now that he has decided not to appeal they probably want to just draw a line under the whole issue as they may not have had a realistic chance of getting costs anyway.
It is likely that the EAT would have accepted the appeal, purely because it is the first type of this case. It is fair enough if he did not have the stomach for the costs of the appeal, plus if he appeals it he is likely to open himself up to Freshfields’ costs claim adding insult to injury.
As there is yet no appellate decision on this there is no legal precedent, but it is likely that similar cases will still refer to this ruling.
We employment lawyers have all taken careful note of this case, which was a pretty well put together argument. It has provided a benchmark of sorts and I doubt this will be the final word on age benefits claims.
I think it is a shame that the case did not go to the EAT. There are a number of interesting points that it would be good to have a precedent on. For example, what is ‘objective justification’? That was the main point the whole argument hung on and yet we still don’t have a legal basis to use for the future.
The case will still have considerable influence in terms of guidance for a number of other cases that are going through the system.
Partnerships are very different creatures from employers and in the Bloxham judgment the chair talks a lot about partnerships. They are comparably easy things to rule on with set remuneration rules when compared to employers. There are something like 1,000 cases pending and so this judgment has a long way to run yet.
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