Matthew Hardwick and Ryan Ferro achieve success in unjust enrichment claim in merger and acquisition case | 3VB
Judgment was recently handed down on March 12, 2025, after a trial in H&P Advisory Limited v Barrick Gold (Holdings) Limited [2025] EWHC 562 (Ch). The successful claimant, H&P, was represented by Matthew Hardwick KC and Ryan Ferro, with instructions from Christopher Swart, Lucy Webster, Gabriella Martin, and Thulasy Packianathan of Squire Patton Boggs. The case revolved around H&P’s role in the merger of Barrick Gold Corporation and the Defendant (formerly Randgold Resources) in 2019, creating one of the largest gold mining companies globally.
H&P brought claims against the Defendant under an oral agreement and unjust enrichment for financial advisory services provided in connection with the merger. The judge found in favor of H&P, awarding them US$2 million as restitutionary quantum meruit, determining that the Defendant had been enriched unjustly at H&P’s expense. The judgment delved into the concept of ‘free acceptance’ as an unjust factor, aligning with academic literature and Lord Burrows’ view in Barton v Morris [2023] UKSC 3, stating free acceptance was not unjust in English law.
The court agreed with H&P’s assertion of a failure of basis in the case, recognizing that a claim of unjust enrichment could cover services rendered by an investment bank before a client formally engaged them. The judgment addressed various arguments including the Defendant not being enriched, the enrichment not being at H&P’s expense, H&P not being a risk-taker, and claims not being barred by the illegality doctrine due to potential breaches of regulatory obligations under FSMA. The decision also analyzed valuation principles and determined the Defendant was unjustly enriched at H&P’s expense, leading to the restitutionary award.
This case sets a significant legal precedent, clarifying the principles of unjust enrichment and contribution in the context of mergers and acquisitions. It highlights the importance of establishing a basis for remuneration in M&A transactions and reaffirms the legitimacy of claims for unjust enrichment for services rendered pre-engagement. The judgment emphasizes the common expectation in the industry that an investment bank’s compensation should encompass work done before the formal establishment of the engagement.
In conclusion, the judgment in H&P Advisory Limited v Barrick Gold (Holdings) Limited is a significant development in unjust enrichment law. It provides clarity on the interpretation of ‘free acceptance’ as an unjust factor and affirms the rights of parties to claim restitution in situations involving services rendered before formal engagement. This case serves as a reminder of the importance of establishing clear grounds for compensation in complex transactions and sets a precedent for unjust enrichment claims in the field of financial advisory services.
