When Heritage Plc was closed in 2 hours by Lloyds Bank in 1996 two litigations followed. One in London against Lloyds Bank and Grant Thornton (GT), one in Lisbon, against members of the establishment. Some topline comparison between the two jurisdictions is interesting.
The Lisbon one has just been settled and I am receiving €400 pm into an account I have recently opened in Cascais, Portugal. Not a princely sum, but the original investment was only £50k. The London litigation is ongoing and is for a significant amount.
I started Heritage in 1980. By 1982 it was looking to expand into ceramic housewares. I “stumbled” across a manufacturer of throw-away ceramic pate dishes, Cerexport; between us we developed Heritage pottery a range of oven-to-tableware. The pottery was very profitable for both of us: we both floated on our different stock market 5 years later.
I was offered pre-flotation Cerexport shares. A director of Lloyds Merchant Bank who was advising me on Heritage’s forthcoming flotation asked if he could also benefit from this. We both bought £50k. These purchases were facilitated by a company owned by Cerexport’s marketing director, who was also a director of Heritage.
Cerexport’s flotation coincided with Black Monday and a fall in share price. The Lloyds director suggested he got our cheques stopped, which I did not allow. Both the Lloyds director and I received a certificate from a Lisbon stock broker confirming they were holding our (bearer) shares. The very day that Lloyds Bank appointed GT as conflicted Admin Receivers to Heritage the marketing director of Cerexport was in London discussing the logistics of a £500k order for a Woolworths promotion. The appointment came as a surprise to everyone. Going forward it was suggested that if necessary we could start a new company, starting with that Woolworths-order.
When asked what I was going to use as finance, I suggested we started with the shares in Cerexport. To which I was asked, “what shares?”. Coming, at that time, from someone I had considered a friend was a nasty shock. The Lloyds director and I took our share certificates to the Portuguese Stock Exchange, who investigated. They (CMVH) confirmed we had been the victims of a crime, by this time eleven years ago.
The first difference I then became aware of was that Portugal had a limitation of 10 years on criminal actions, unlike the UK, where there is no limitation on crime. CMVH suggested we bring a civil case, which was not subject to limitation, as it would be in the UK, and CMVH would support such an action. The action was against 3 defendants, the Marketing Director of Cerexport, the stockbroker who provided the certificates and the owner of the brokerage who also at that time ”owned” Cerexport. A bank that had subsequently bought the brokerage was involved as an “interested party”. CMVH also said that the defence was roughly translated that each defendant was claiming that another defendant had committed the crime. Our first firm of solicitors, who were happy to accept the case on contingency, was, in fact, a Brazilian firm, who had no right of audience before a Lisbon court. Where we had believed this firm was instructing barristers, they were, in fact, instructing an entirely independent firm of advocates, who were not part of the contingency arrangement.
The second thing we learnt is that Lisbon has advocates, not solicitors and barristers. Our next firm was a small firm that was relocating from London to Lisbon. I went to Lisbon, met with our new solicitor and the solicitors from the other side, and thought I had agreed a settlement. Subsequently, I was advised that it had not been agreed by all parties. My new solicitor, whilst pointing out that I had a brilliant case, now wanted a monthly retainer to continue.
The third thing I learnt was to maintain my cynicism. The Lloyds director did not continue with the litigation. The next firm of advocates was what I thought a branch of a British firm. When the Lisbon office started to chase me for fees that had not been agreed, I found out that the London and Lisbon offices were no longer connected. I clearly had a case proven to a criminal level, but could not find a professional in Lisbon to bring it. With my two words of Portuguese, I could not do that myself. Through the Chamber of Commerce I met ME and F. Particularly I liked Miguel Costa from that firm. We agreed a fee. Sometime later I was called over for a Hearing in Court.
I was aware that in Lisbon everyone pays their own costs, win or lose. Which was fortunate as one of the defendants was being represented by the former Attorney General of Portugal. There appeared to be a number of untruths in the evidence submitted by the other side. Miguel explained that Portuguese Courts have more tolerance of perjury than UK ones. The Hearing was conducted by a professional Judge. Yet another difference from the UK was that Judges become trainee judges without first being barristers.
Lisbon has a different concept relating to disclosure. Disclosing the CMVH report, I disclosed my entire case. I was cross-examined by the Judge, then the advocates for the defence. Then I was sat down with my interpreter next to the main defendant, and the Judge cross-examined us in tandem. To some of his answers, the Judge commented a Portuguese word which Miguel translated for me as “incredible”! The Judge found for me and also fined the main defendant €800 for litigating in bad faith.
The Judgment was appealed on the grounds that I MAY have collected the shares from the stockbroker. Miguel then did a brilliant job proving a negative.
Dedicated to my friend Miguel Costa who very sadly died in the recent forest fires in Portugal.
Update from the late Miguel Costa`s firm in Portugal:
Dear Jeffrey,
Thank you so much for this great article! We are very grateful for your action.
Miguel would be very flattered for your kind words.
Sofia
Martínez-Echevarría & Ferreira – Sociedade de Advogados
This blogpost is for information purposes and should not be relied upon as legal advice because it does not consider or take into account your own personal circumstances. If in doubt, seek legal advice.