Evening Standard: The Thyssen family feud that is keeping the lawyers busy
The £2 billion dynasty feud that's made millions for London's top lawyers. David Rowan investigates
TO the lawyers unwinding in the Bung Hole wine bar near Chancery Lane, the champagne toast - to the fabulously wealthy Swiss industrialist Heini Thyssen - provoked a roar of self-satisfied laughter. The world's costliest lawsuit, fought between the Baron and his son over control of the Thyssen dynasty's £2billion family trust, had finally ended. It now just remained to settle the bills in a five-year case that had cost £100million in legal fees - much of which has enriched the London legal profession.
The Evening Standard has established that at least three London QCs - Michael Crystal, Robert Ham and Alan Boyle - made £1million a year during an extraordinary two-year court battle that involved 121,959 legal documents. Another two dozen barristers and solicitors, chosen for their expertise in commercial law, also earned substantial fees in a case which became known in the inns of court as a beanfeast.
How appropriate, then, that the lawyers' toast mentioned the Thyssen family motto, "Virtue transcends riches". It reminded those present how far the riches, if not the virtue, of this troubled aristocratic family had provided a windfall for London's legal elite.
The case, heard largely in a courtroom in Bermuda, where the trust had been set up, concerned an attempt by Baron Thyssen and his fifth wife, Carmen Cervera, a former Spanish beauty queen 22 years his junior, to regain control of the trust from his son Georg. Since 1997 the bitter family conflict had drifted through Bermuda's illequipped legal system. Then suddenly a few days ago the Baron - aged 81, and frail after several strokes - joined the rest of his immediate family to announce that "happily" their lawyers had reached a belated settlement. "The family very much regrets that misunderstandings have led to legal proceedings, which today are all dismissed or withdrawn," the agreed statement began. The Baron added that the family would now "build on its many achievements and support the contributions of its members to lasting success".
BEYOND that, all parties involved, and their lawyers, were sworn to silence, not least about the final legal bill calculated by The Lawyer magazine this week to be £100 million. "The sums involved are obscene," said a source at Lincoln's Inn who knows the details of the case. "It seems ridiculous that a family with so much money starts squabbling, and the only people benefiting are the lawyers."
A respected legal commentator confirmed that "it was like a beanfeast - one big staff outing". Even the Bermuda trial judge, who quit dramatically after 18 months, declared in court that "the amount of money which must have been wasted in this case is positively obscene".
The list of fee-earners is a rollcall of London's legal elite. The Baron, his son and the trustees hired the finest commercial barristers from Gray's Inn and Lincoln's Inn - men whose hourly rates can reach £1,000. In addition, they brought over some of London's top City solicitors to work with teams of local Bermuda attorneys.
The Baron's team was led by Michael Crystal, 53, a flamboyant white-haired QC and theatre aficionado who soon made a name in Bermuda for his lavish entertaining and his wife's opulent jewels. Beside him sat two other barristers representing the Baron; Robert Ham QC, a specialist in trust law, with whom Crystal shared a £10,000a-month seaside home in Hamilton, Bermuda's capital, and David Alexander, the 37-year-old son of Lord Alexander of Weedon who works from Crystal's Gray's Inn chambers. This formidable team managed to stretch out its opening address to almost 15 months.
Georg, the son who controlled the family trust, was not to be outdone. He hired four top barristers from Serle Court in Lincoln's Inn, led by Alan Boyle QC and backed by his colleagues Nicholas Harrison, Douglas Close and Tim Collingwood. Boyle, 52, was not a stranger to high-spending clients - he successfully represented Elton John against his music publisher in 1985. Together with Crystal and Ham, he is known as a member of the "million-a-year club" of top London silks.
Then there were the family trust's own lawyers. They faced a more troubled time. Their lead QC, Nicholas Patten, also on track to make a million a year, had to leave halfway through when he was appointed a High Court judge. His replacement, Trevor Philipson, died during the case, and was replaced by Michael Driscoll QC, head of 9 Old Square chambers. A junior barrister, Tom Leech, was retained as well.
Each side also employed a team of London solicitors, whose annual bills ran well into seven figures. Georg's team was represented in Bermuda by a team of top lawyers from Clifford Chance, the huge London-based practice whose fee income boomed by 60 per cent last year, according to the legal publishers Chambers & Partners. It calculates that in 2001 a typical equity partner at Clifford Chance made £721,604 profit, and the company had two partners in Bermuda, Jeremy Sandleson and Jeremy Kosky, plus four assistants.
The Baron employed Allan Reason of the City law firm Davies Arnold Cooper, whose past cases include the Maxwell, Barings and Polly Peck court battles. Another London beneficiary was the trustees' law firm Norton Rose, which last year enjoyed a 26 per cent rise in profits to £521,739 per equity partner. At least seven of the firm's lawyers went to Bermuda.
Michael Chambers, editor of Commercial Lawyer magazine, said: "It's the old story. Wealthy clients like the Thyssens who behave in a slightly irrational way, are a bit of a bonanza for the legal profession. Half the English bar were out there, and they were all doing very nicely." A legal source who spent time in Bermuda on the case agreed: "The leading counsels could typically expect close to £1million a year from the case." Michael Crystal's fee is thought to be "substantially higher", although junior barristers would typically earn two-thirds of the full rate.
A senior barrister's clerk, who sets fees for such cases, explained the charging process. Typically, a QC will charge a six-figure fee simply to be briefed. The clerk said: "The barristers in this case would get an extra premium, as they would be neglecting their London practice and paying Thyssen their full attention. So if a barrister's daily rate was £2,500 in London, it would be £3,000 in Bermuda.
"There's also a rate negotiated for weekends: you'd normally charge half the day rate for just being out there, even if you weren't working. Now, say Mr Average QC is getting £3,500 a day and counts on 48 working weeks a year. It's not difficult seeing how you can get into the million-pound-plus league." Then there were the fully paid expenses, from fine dining to regular flights home.
A REPORTER following the case in Hamilton noted that one of the young barristers kept writing "ARTR" on his briefing papers each morning. Finally he was asked what it meant. "Always remember the refresher," he replied, referring to the generous daily top-up that made the tedium bearable.
But Bermudans were soon questioning why the lawyers were being allowed to drag out the case in Supreme Court Number Four, a former Salvation Army hall refurbished at the Thyssens' expense. "Some of the locals were getting tired of them," recalled a journalist.
It took from October 1999 to January 2001 to complete Crystal's opening address, which involved intricate examination of "voluminous documents" and Crystal's own reflections on which Thyssen painting was his favourite - a Memling, he told the court, now hanging in Madrid.
When the Bermuda judge, Justice Denis Mitchell, quit suddenly in March 2001 after a dispute over his own £85,000 salary, he pointedly attacked the trial's excesses. "I was born and brought up in Scotland and taught a proper respect for money," he said. "It was not to be wasted."
By this stage, the case was estimated to have cost £70million and rising at £500,000 a week. The subsequent legal arguments, which continued in London and Zurich until last week's settlement, would have added a further £20 or £30 million, sources say.
The expense was finally enough to lead even Bermuda's Attorney-General, Dame Lois Browne-Evans, to mock the "big boys" from London who would stroll around "with their big briefcases and big bucks". "How wonderful that all these lawyers are making all of this money," she told the Bermuda Sun. "I just hope that some of it stays in the country and helps this economy."
A little of it did, they will tell you in the bars around Chancery Lane. There were the island's 10 golf courses to sample, the £29 bottles of chilled Italian wine in Fresco's, Bermuda's oldest wine bar, and the lunches of pan-roasted rockfish in pink grapefruit sauce.
TO Baron Heini Thyssen, the powerful Swiss industrialist whose art collection rivals only the Queen's, a Bermuda-based trust initially seemed a sensibly costeffective way to protect his business assets. By last week, when he finally agreed to drop his challenge to the trust's legal status, the legal fees alone had cost his family a big chunk of its £2 billion fortune.
The Baron, who is reported now to be seriously ill in Spain, has admitted to two weaknesses. "Looking at a beautiful woman or at a fine work of art produces a similar act - butterflies in the stomach and an urge to possess," he once confessed. Paintings, however, had the edge - "you hang them on a wall and they stay silent". His current wife has shown no tendency towards silence.
The first signs of family tension emerged after the Baron married Carmen Cervera, his fifth wife, in 1985. The Baroness, a former Miss Spain, had previously been married to the Tarzan actor Lex Barker and a Venezuelan film producer, and had a son whom the Baron adopted. The Baron had by then placed another son, Georg, from a former marriage to an Austrian princess, in charge of the Bermudaregistered Continuity Trust that held the shares in his industrial business. The trust was to pay the Baron £16million a year, subject to the business, Thyssen-Bornemisza Group (TBG), making sufficient profits.
The Baroness had agreed in a marriage settlement to renounce her claim on the trust. For this pledge, the Baron gave her a 179-carat diamond, the Star of Peace. But her concerns grew from 1992, when the Baron was reported to have been facing a cash-flow crisis. By 1995, the Baroness said the shortfall was £50 million. She visited Georg at the company's Monaco headquarters and demanded the money. Georg refused, claiming that this would breach the trust's terms. From then, tension grew.
The following year, after Georg stormed out of his father's 75th birthday party at their 18th-century Swiss villa, a legal fight looked inevitable. "This is going to be the case of the century," promised the Baroness, whose own son stood to gain by changes to the trust. "It affects one of Europe's most important families. The war has started." Legal papers were filed in January 1997.
Five years later, the terms of the settlement suggest that little has been achieved. It provides for "the continued undivided ownership" of the family business interests in the Bermuda trust; a new way of calculating the Baron's annuity, and the Baroness's continued involvement with the art collection. The fight was all, the parties now agree, a regrettable, if expensive, "misunderstanding".
(Evening Standard, March 1 2002)
TO the lawyers unwinding in the Bung Hole wine bar near Chancery Lane, the champagne toast - to the fabulously wealthy Swiss industrialist Heini Thyssen - provoked a roar of self-satisfied laughter. The world's costliest lawsuit, fought between the Baron and his son over control of the Thyssen dynasty's £2billion family trust, had finally ended. It now just remained to settle the bills in a five-year case that had cost £100million in legal fees - much of which has enriched the London legal profession.
The Evening Standard has established that at least three London QCs - Michael Crystal, Robert Ham and Alan Boyle - made £1million a year during an extraordinary two-year court battle that involved 121,959 legal documents. Another two dozen barristers and solicitors, chosen for their expertise in commercial law, also earned substantial fees in a case which became known in the inns of court as a beanfeast.
How appropriate, then, that the lawyers' toast mentioned the Thyssen family motto, "Virtue transcends riches". It reminded those present how far the riches, if not the virtue, of this troubled aristocratic family had provided a windfall for London's legal elite.
The case, heard largely in a courtroom in Bermuda, where the trust had been set up, concerned an attempt by Baron Thyssen and his fifth wife, Carmen Cervera, a former Spanish beauty queen 22 years his junior, to regain control of the trust from his son Georg. Since 1997 the bitter family conflict had drifted through Bermuda's illequipped legal system. Then suddenly a few days ago the Baron - aged 81, and frail after several strokes - joined the rest of his immediate family to announce that "happily" their lawyers had reached a belated settlement. "The family very much regrets that misunderstandings have led to legal proceedings, which today are all dismissed or withdrawn," the agreed statement began. The Baron added that the family would now "build on its many achievements and support the contributions of its members to lasting success".
BEYOND that, all parties involved, and their lawyers, were sworn to silence, not least about the final legal bill calculated by The Lawyer magazine this week to be £100 million. "The sums involved are obscene," said a source at Lincoln's Inn who knows the details of the case. "It seems ridiculous that a family with so much money starts squabbling, and the only people benefiting are the lawyers."
A respected legal commentator confirmed that "it was like a beanfeast - one big staff outing". Even the Bermuda trial judge, who quit dramatically after 18 months, declared in court that "the amount of money which must have been wasted in this case is positively obscene".
The list of fee-earners is a rollcall of London's legal elite. The Baron, his son and the trustees hired the finest commercial barristers from Gray's Inn and Lincoln's Inn - men whose hourly rates can reach £1,000. In addition, they brought over some of London's top City solicitors to work with teams of local Bermuda attorneys.
The Baron's team was led by Michael Crystal, 53, a flamboyant white-haired QC and theatre aficionado who soon made a name in Bermuda for his lavish entertaining and his wife's opulent jewels. Beside him sat two other barristers representing the Baron; Robert Ham QC, a specialist in trust law, with whom Crystal shared a £10,000a-month seaside home in Hamilton, Bermuda's capital, and David Alexander, the 37-year-old son of Lord Alexander of Weedon who works from Crystal's Gray's Inn chambers. This formidable team managed to stretch out its opening address to almost 15 months.
Georg, the son who controlled the family trust, was not to be outdone. He hired four top barristers from Serle Court in Lincoln's Inn, led by Alan Boyle QC and backed by his colleagues Nicholas Harrison, Douglas Close and Tim Collingwood. Boyle, 52, was not a stranger to high-spending clients - he successfully represented Elton John against his music publisher in 1985. Together with Crystal and Ham, he is known as a member of the "million-a-year club" of top London silks.
Then there were the family trust's own lawyers. They faced a more troubled time. Their lead QC, Nicholas Patten, also on track to make a million a year, had to leave halfway through when he was appointed a High Court judge. His replacement, Trevor Philipson, died during the case, and was replaced by Michael Driscoll QC, head of 9 Old Square chambers. A junior barrister, Tom Leech, was retained as well.
Each side also employed a team of London solicitors, whose annual bills ran well into seven figures. Georg's team was represented in Bermuda by a team of top lawyers from Clifford Chance, the huge London-based practice whose fee income boomed by 60 per cent last year, according to the legal publishers Chambers & Partners. It calculates that in 2001 a typical equity partner at Clifford Chance made £721,604 profit, and the company had two partners in Bermuda, Jeremy Sandleson and Jeremy Kosky, plus four assistants.
The Baron employed Allan Reason of the City law firm Davies Arnold Cooper, whose past cases include the Maxwell, Barings and Polly Peck court battles. Another London beneficiary was the trustees' law firm Norton Rose, which last year enjoyed a 26 per cent rise in profits to £521,739 per equity partner. At least seven of the firm's lawyers went to Bermuda.
Michael Chambers, editor of Commercial Lawyer magazine, said: "It's the old story. Wealthy clients like the Thyssens who behave in a slightly irrational way, are a bit of a bonanza for the legal profession. Half the English bar were out there, and they were all doing very nicely." A legal source who spent time in Bermuda on the case agreed: "The leading counsels could typically expect close to £1million a year from the case." Michael Crystal's fee is thought to be "substantially higher", although junior barristers would typically earn two-thirds of the full rate.
A senior barrister's clerk, who sets fees for such cases, explained the charging process. Typically, a QC will charge a six-figure fee simply to be briefed. The clerk said: "The barristers in this case would get an extra premium, as they would be neglecting their London practice and paying Thyssen their full attention. So if a barrister's daily rate was £2,500 in London, it would be £3,000 in Bermuda.
"There's also a rate negotiated for weekends: you'd normally charge half the day rate for just being out there, even if you weren't working. Now, say Mr Average QC is getting £3,500 a day and counts on 48 working weeks a year. It's not difficult seeing how you can get into the million-pound-plus league." Then there were the fully paid expenses, from fine dining to regular flights home.
A REPORTER following the case in Hamilton noted that one of the young barristers kept writing "ARTR" on his briefing papers each morning. Finally he was asked what it meant. "Always remember the refresher," he replied, referring to the generous daily top-up that made the tedium bearable.
But Bermudans were soon questioning why the lawyers were being allowed to drag out the case in Supreme Court Number Four, a former Salvation Army hall refurbished at the Thyssens' expense. "Some of the locals were getting tired of them," recalled a journalist.
It took from October 1999 to January 2001 to complete Crystal's opening address, which involved intricate examination of "voluminous documents" and Crystal's own reflections on which Thyssen painting was his favourite - a Memling, he told the court, now hanging in Madrid.
When the Bermuda judge, Justice Denis Mitchell, quit suddenly in March 2001 after a dispute over his own £85,000 salary, he pointedly attacked the trial's excesses. "I was born and brought up in Scotland and taught a proper respect for money," he said. "It was not to be wasted."
By this stage, the case was estimated to have cost £70million and rising at £500,000 a week. The subsequent legal arguments, which continued in London and Zurich until last week's settlement, would have added a further £20 or £30 million, sources say.
The expense was finally enough to lead even Bermuda's Attorney-General, Dame Lois Browne-Evans, to mock the "big boys" from London who would stroll around "with their big briefcases and big bucks". "How wonderful that all these lawyers are making all of this money," she told the Bermuda Sun. "I just hope that some of it stays in the country and helps this economy."
A little of it did, they will tell you in the bars around Chancery Lane. There were the island's 10 golf courses to sample, the £29 bottles of chilled Italian wine in Fresco's, Bermuda's oldest wine bar, and the lunches of pan-roasted rockfish in pink grapefruit sauce.
TO Baron Heini Thyssen, the powerful Swiss industrialist whose art collection rivals only the Queen's, a Bermuda-based trust initially seemed a sensibly costeffective way to protect his business assets. By last week, when he finally agreed to drop his challenge to the trust's legal status, the legal fees alone had cost his family a big chunk of its £2 billion fortune.
The Baron, who is reported now to be seriously ill in Spain, has admitted to two weaknesses. "Looking at a beautiful woman or at a fine work of art produces a similar act - butterflies in the stomach and an urge to possess," he once confessed. Paintings, however, had the edge - "you hang them on a wall and they stay silent". His current wife has shown no tendency towards silence.
The first signs of family tension emerged after the Baron married Carmen Cervera, his fifth wife, in 1985. The Baroness, a former Miss Spain, had previously been married to the Tarzan actor Lex Barker and a Venezuelan film producer, and had a son whom the Baron adopted. The Baron had by then placed another son, Georg, from a former marriage to an Austrian princess, in charge of the Bermudaregistered Continuity Trust that held the shares in his industrial business. The trust was to pay the Baron £16million a year, subject to the business, Thyssen-Bornemisza Group (TBG), making sufficient profits.
The Baroness had agreed in a marriage settlement to renounce her claim on the trust. For this pledge, the Baron gave her a 179-carat diamond, the Star of Peace. But her concerns grew from 1992, when the Baron was reported to have been facing a cash-flow crisis. By 1995, the Baroness said the shortfall was £50 million. She visited Georg at the company's Monaco headquarters and demanded the money. Georg refused, claiming that this would breach the trust's terms. From then, tension grew.
The following year, after Georg stormed out of his father's 75th birthday party at their 18th-century Swiss villa, a legal fight looked inevitable. "This is going to be the case of the century," promised the Baroness, whose own son stood to gain by changes to the trust. "It affects one of Europe's most important families. The war has started." Legal papers were filed in January 1997.
Five years later, the terms of the settlement suggest that little has been achieved. It provides for "the continued undivided ownership" of the family business interests in the Bermuda trust; a new way of calculating the Baron's annuity, and the Baroness's continued involvement with the art collection. The fight was all, the parties now agree, a regrettable, if expensive, "misunderstanding".
(Evening Standard, March 1 2002)
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