Blog: Gallagher vs Ardonagh – A warning to us all

High Court London

The staff poaching lawsuit between Gallagher and Ardonagh wrapped up in court on Friday, as the judge threw out all but one of Gallagher’s claims. It serves as a timely reminder of the ultimate costs of litigation, which are not always financial.

One might imagine Gallagher left red-faced on Friday morning, facing a £3.1m payment towards the defendants’ legal costs.

The money might be a drop in the ocean to the global broker, but the reputational damage the self-styled ‘ethical’ company has sustained may well be another matter.

Gallagher UK CEO Simon Matson’s former top team do not look good coming out of this, as Ardonagh chair John Tiner was keen to point out.

The case hit national headlines earlier this year when Premiership Rugby was forced to defend its relationship with its sponsor, after former leader of the Liberal Democrats and MP for Twickenham Vince Cable urged it to cut ties with Gallagher.

In court, Matson admitted referring to defendant Nawaf Hasan – who it was revealed during session had once had a long-term relationship with Matson’s now wife – as a “complicated fat Arab” while he was still technically an Alesco employee in 2017.

It was a regrettable slur, but not a discriminatory one, according to Matson, who had been CEO of Gallagher’s Alesco at the time.

It wasn’t just Matson under scrutiny; in response to the Whatsapp message, then-Alesco chief operating officer Gary Lashmar added: “And a very greedy one.”

Matson also found himself challenged over the use of the word “c*nt” by his senior team to describe outgoing employees.

Revelations weren’t just limited to the Alesco team of the time.

Over in the US, Gallagher international commercial director Vyvienne Wade made a reference to “72 virgins” while discussing Hasan in an email conversation with Matson.

So what else did we discover?

The working environment at Alesco sounded, at times, less than pleasant.

We heard about an Alesco member of staff being regularly left in “tears” by her manager’s approach; granted, he was ultimately relieved of these duties.

And the top boss’ feelings towards his team seemed to rapidly oscillate between love – offering the aforementioned manager a bed in his home while he was potentially facing marital difficulties – and disgust and fury.

 “Proper mugged me off”; “Dead to me” – this was how outgoing staff were referred to.

 It sounds like something out of a “gangster movie”, something “teenage kids” might say, as was suggested in the courtroom.

“Is that how you like to style yourself?” a red-faced, red-handed, but still upright Matson was asked.

And yes, it was.

It may be neither here nor there how CEOs style themselves at home if they can keep themselves from dragging their employees and employers into it.

It becomes another matter when their own organisation brings a lawsuit that thrusts their conduct into the public domain.

Did Matson ever think those messages would see the light of day? Of course not.

But they did – and this should serve as a stark warning to others.

The relationship between Gallagher and Ardonagh CEO David Ross – not named as a defendant in this case – will probably never be touchy feely.

Talk of tension has bounced around the market ever since Ross, himself once a Gallagher golden boy, left the business in 2015.

But in the course of this miscalculated case, what did we learn about Ross? That he likes a spot of water polo and fancies himself as a bit of a James Bond figure.

That he’s built an enviable business and, lawfully it turns out, coaxed away some of his rival’s top talent.

Just one of Gallagher’s allegations was upheld – a contract breach pertaining to defendant Hasan, for which just under £100,000 in damages were waived.

Some say this case smacks of hubris; a revenge attempt gone wrong.

Is Matson Macbeth, or Lady Macbeth in this situation? Is he neither?

Was he thrown to the wolves, or is he the ultimate architect of his own ritual humiliation?

And what next for the Gallagher UK CEO? Perhaps he will remain steadfast; perhaps he is destined to be Gallagher’s Ophelia, floating down the proverbial river…

And will this case – which surely should have been settled far, far earlier rather than being allowed to escalate – prompt others to reconsider costly, drawn out and very public litigation?

One can only hope that firms now think twice before leaking out their dirty laundry for all to see.

On Friday morning a Gallagher spokesperson said: “We are, of course, disappointed with the result. However, we respect Judge Freedman’s decision and we now consider the matter closed.”

It could, and should, have been closed a lot earlier.

As things stand, Gallagher has authored its own reputational crisis, and would have done so whether it had won or not.

The judgment is but another blow, and Gallagher will be glad to see this sorry mess behind it.

Now it must pick up the pieces, and ensure the unpleasant attitudes shown to be bubbling beneath the surface cease to be a reflection of itself.

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