The High Court has dismissed all claims brought by Towry against Raymond James and seven former Edward Jones advisers, with the judge branding them “unsustainable” and “entirely without foundation”.
In a damning criticism of the case heard at the Royal Courts of Justice in London last July, Mrs Justice Cox roundly rejected the claims made by Towry that Raymond James had encouraged or been reckless in allowing Wayne Hayhurst, Tracy Simpson, Tom Spain, James Chandler, Barry Bennett, Pieter Burger and Stuart Hutton to breach non-solicitation clauses in contracts which prevented the former Edward Jones advisers from contacting the clients for up to 12 months.
Towry brought the case in April 2010 after 388 clients with assets totalling £33m transferred to Raymond James. Towry also alleged Raymond James and the advisers had “conspired” with each other in some instances to breach their Edward Jones contracts.
Raymond James and the advisers argued Towry had provided no evidence of unlawful solicitation and allowed only seven days for new employees to agree contract terms before withdrawing any employment offer.
In her judgment handed down on Tuesday, Mrs Justice Cox said: “Having regard to the whole of the evidence in this case, the allegations against Raymond James do not withstand scrutiny.
“There is no evidence to support a suggestion that Raymond James deliberately set out to induce a breach of contract by any individual defendant. The suggestion that Raymond James either knew or was reckless as to whether any defendant was going to solicit any client is in my view unsustainable, as is the suggestion that they closed their eyes to the obvious.”
On the claim that the advisers were conspiring to breach their contracts, she said: “I reject as entirely without foundation in this case, the allegation that the conduct of the individual defendants prior to leaving their employment with Towry was consistent with a ’pre-existing plan’ to poach Towry’s clients.”
The judge awarded total legal costs against Towry of £1.2m. Towry had sought damages of £5.9m.
Law firm Faegre Baker Daniels, representing Raymond James, says the costs represent the severity of the allegations. Litigation partner Robert Campbell says: “All the claims against all the defendants were dismissed and the judge made the most gen- erous cost offer she is able to do.”
Raymond James chief executive Peter Moores says: “The judgment confirms the advisers did not breach their restricted covenants, that there was no misuse of confidential information and there was no conspiracy to injure Towry EJ.”
Towry chief executive Andrew Fisher says: “We did not undertake this action lightly but to protect our legitimate business interests for our clients and shareholders.”
See this week’s Money Marketing and related stories to the right for full details of the case.