CAMPAIGN: Litigation PR - Derhalli team sets media's tone at court

Client: Kerim Derhalli PR Team: Bell Yard Communications Campaign: Kerim Derhalli sues City giant Timescale: December 2002- March 2003 Budget: Not disclosed

Last month Kerim Derhalli, a City bond trader, brought what is believed to be the biggest ever employment-related claim by an individual in the UK against his former employer, US merchant bank Lehman Brothers.

At London's High Court, Derhalli alleged constructive dismissal and breach of contract and claimed that he was owed £10m in back pay and bonuses for his work in reclaiming debts owed to the bank in Russia after the collapse of the rouble in 1998.

Following an initial hearing in 2002, it was evident that when finally heard, the case would generate widespread media coverage.

In particular, he accused the bank of 'questionable accounting decisions', posting 'phantom profits' and hiring former KGB spies as debt collectors.

Lehman strongly contested Derhalli's claims and referred to some of his accusations, including the suggestion that the bank hired former KGB agents, as irrelevant.

Last December, to protect his position in the public eye, the now global head of commodities trading at Deutsche Bank hired litigation PR specialist Bell Yard Communications.

Objectives

As bringing a case to the High Court can be a stressful business, Bell Yard was keen to let Derhalli and his legal team focus on matters in court, rather than on what was being said in the media.

Of some concern was that journalists understood the complexities of the case, and the fact that Derhalli was fighting his corner on the point of breach of contract, rather than as a 'fat cat' City trader looking to make himself a tidy sum.

The PR team was also determined that interest in the case should be restricted to the business community and that neither Derhalli's current employment nor his family life should become the subject of media speculation.

Strategy and Plan

The first step was to ensure the media understood that Derhalli was a highly skilled trader who, as manager of the emerging markets team, had recovered millions of dollars for his former employer.

This was followed by an explanation of claims by Derhalli's legal team, that Lehman had gone against its contract to remunerate the trader according to the value of the deals he pulled in.

Once the trial commenced on 17 February, the strategy switched to providing journalists with what they needed to keep up with court proceedings on a daily basis. In particular, the case had amassed a weight of documentation and witness statements involving complex valuations and trading models that needed to be condensed into facts and issues that court reporters and the business media could understand.

To aid this process, Bell Yard, outlined the cast of characters appearing in court for both sides and produced a schedule of which witnesses were likely to be called and when.

For business journalists not in attendance, the PR team also emailed daily extracts from the online live notes made by the court stenographers, providing additional explanations of the key issues as they arose.

Throughout this process, Bell Yard countered claims by Lehman's lawyers which both denied any legally binding contract between the two parties and questioned Derhalli's valuation of certain Russian bonds. The PR team also fought off reported claims made by the bank in court that Derhalli was desperate to cause 'as much collateral damage to Lehman Brothers as possible'.

Measurement and Evaluation

Evaluation was carried out in-house with the emphasis on qualitative rather than quantitative measures.

This revealed that in the main, Bell Yard was successful in restricting media interest to the business pages and broadcasters. In addition, coverage focused on the key issues of the case, namely the alleged breach of contract and constructive dismissal rather than sensationalising the huge sums involved.

However, The Daily Telegraph covered Lehman's side of the argument in detail and more spectacular aspects of the case excited interest from the broader media. In particular, the Daily Express reveled in the claim that Lehman had contacted the KGB and offered Derhalli bodyguards in response to death threats from Russian clients.

In addition, titles including The Guardian reported Lehman's claim that Derhalli was using the publicity surrounding his case to exert pressure on the US bank to offer a favourable settlement.

Results

By getting journalists on-side from the outset, the PR team set the tone for media coverage in this case, protecting Derhalli's professional status and his private life.

Nine days into the hearing, on 3 March, a confidential out-of-court settlement was reached, on the same day that Derhalli's former boss was due to give evidence. The terms of the agreement were undisclosed, but Derhalli is thought to have won around £5m.

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