Risk Update

Law Firm Risk News — Failure to Conflict Check Expert Ruled Amateur Move, Judge Recuses on $570m Payout Suit, Another Big Firm Faces Data Breach Backlash

Posted Dan Bressler

David Kluft asks: “Can my whole firm get disqualified if I forget to a run a conflict check on my expert?”

  • “A CA plaintiff sued Ford over an allegedly defective vehicle. Ford assigned an Engineer A to provide technical support to its lawyer on the case, but Engineer A was not available for an early settlement conference, so Engineer B met with the lawyer to discuss the case and went in Engineer A’s place.”
  • “About six months later, Engineer B had left Ford’s employ and showed up as the plaintiff’s expert during an inspection of the vehicle in the same case. Plaintiff’s lawyer later claimed he didn’t remember that Engineer B had been at the settlement conference, as he attends lots of settlement conferences, and the Court found the retention of Engineer B was ‘due to the failure of [the firm’s] duty to conduct a conflict check of its expert.'”
  • “Ford moved to disqualify Engineer B, the lawyer, and the lawyer’s whole firm. The Court disqualified Engineer B as an expert because he had obtained confidential information while meeting with Ford’s lawyers. The Court then disqualified the plaintiff’s lawyer because he was presumed to have received confidential information from the expert, and mere declarations that he did not receive such information is not sufficient.”
  • “Moreover, the Court was not impressed that the lawyer filed Engineer B’s expert reports after a motion to disqualify him had been filed, demonstrating that he did not take the conflict seriously.”
  • “Finally, the Court also disqualified the entire firm from the case in part because they failed to institute an ‘ethical wall’ of the other firm lawyers until 4 months after the motion to disqualify and a month after the expert report was filed, and the ‘ethical wall’ they did institute consisted of little more than a belated restriction of certain files by the IT department and the lawyer’s ‘self-imposed prohibition against discussing the case with others’ that was never put in writing.”
  • Order: here.

“Del. Judge Recuses Herself From Apollo $570M Payout Suit” —

  • “A Delaware vice chancellor has recused herself from presiding over a $570 million payout dispute involving Apollo Global Management Inc. insiders due to a conflict of interest stemming from her prior employment at Skadden Arps Slate Meagher & Flom LLP.”
  • “The recusal centers on Skadden’s involvement in a merger with direct ties to the contested payout, creating potential bias concerns that necessitated the judge’s disqualification.”
  • “The case involves litigation over insider compensation at Apollo Global Management, a significant alternative asset manager, with the disputed payout amount reaching $570 million.”
  • “The judicial reassignment introduces procedural delay and uncertainty regarding the litigation timeline for this high-stakes corporate governance dispute.”

“WilmerHale Sued Over Client Personal Information Data Breach” —

  • “Wilmer Cutler Pickering Hale & Dorr should pay millions of dollars in damages for loss of clients’ personal information in a May data breach, a putative class action claims. The lawsuit, filed Tuesday in the US District Court for the District of Columbia, seeks negligence and contract damages on behalf of ‘thousands’ of WilmerHale clients that could have been impacted by a data breach discovered by the Washington-based international firm in early May.”
  • “The complaint claims clients were notified by the firm on July 10 that their personal information could have been obtained by hackers.”
  • “‘Defendant disregarded the rights of Representative Plaintiff and Class Members by intentionally, willfully, recklessly and/or negligently failing to take and implement adequate and reasonable measures to ensure that Representative Plaintiff’s and Class Members’ Private Information was safeguarded,’said lead plaintiff Jason Perry, a Las Vegas man who claimed to be a firm client.”
  • “Data breach suits against major law firms are common, as these firms hold vast amounts of private information that could be tapped by criminals in identity fraud schemes. Within the last year similar suits have been brought against Blank Rome, Wiley Rein, Fried Frank, and Pillsbury Winthrop.”
  • “WilmerHale issued a statement saying that it regretted this breach, which was ‘isolated’ and ‘quickly contained,’ and is enhancing firm security. The firm said the hacker didn’t ‘directly access the firm’s systems or network,’ and the firm has no evidence that the hacker has ‘misused or disclosed’ client information.”