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Around The Firms
4 August, 2005  
Final Round. Boxer and law firm settle

Kostya Tszyu and his former solicitors, Eakin McCaffery Cox, have settled their long running dispute. The firm’s insurers coughed-up $4 million, which makes it one of the biggies in professional negligence settlements

imageBoxer Konstantin (Kostya) Tszyu has settled a damages action against Sydney law shop Eakin McCaffery & Cox and partner Andrew Sutherland for $3.5 million.

With legal costs the insurers will be forking out around $4 million, making it one of the most expensive law firm negligence settlements around town.

It brings to an end a ten-year saga which started when Sutherland gave advice that there was no on-going contractual obligation that Tszyu had with the promoter Bill Mordey.

Sutherland is the head of the firm’s commercial litigation department, with a specialty in entertainment, sports and commercial contracts.

He was retained by Tszyu and his team early in 1994 to provide advice on a contract dated January 17, 1992 the boxer had signed with trainer Johnny Lewis and Bill Mordeys Classic Promotions Pty Ltd, and to represent the boxer in negotiations over new promotional arrangements.

In early 1995, Mordey, through another company Fightvision Pty Ltd, sought to exercise a two-year renewal option, which would have meant extending the 1992 contract through to 1997.

On Sutherland’s advice, Tszyu repudiated any ongoing arrangement with Mordey and instead signed a two-year contract with Sky Channel Pty Ltd to fight a series of bouts between 1995 and 1997.

Mordey, unimpressed with this turn of events, successfully sued both Tszyu and Sky Channel in the Supreme Court of New South Wales. On March 27, 1998, Justice Bainton awarded damages against Sky Channel and Tszyu to the tune of $7.3 million, plus legal costs and interest. Sky Channel paid out Mordey and Fightvision, and then successfully sought contribution of $3.8 million from Tszyu.

The boxer’s appeal was dismissed on September 13, 1999.

There’s quite a nice exposition of the legal issues in the case on the Allens Arthur Robs’ web site.

imageTszyu claimed breach of contract and negligence against Sutherland (seen here) and the firm. He claimed that the advice had cost him over $6 million.

Tszyu’s new solicitors, Roland Barros and Dib Khoury of Benjamin & Khoury, successfully negotiated the whopper settlement with Eakin McCaffrey & Cox and its insurers.

More recently, BRW reported that Kostya Tszyu’s name was mentioned in a search warrant issued under the Commonwealth Crimes Act as part of the large-scale tax raids and investigation, codenamed Operation Wickenby.

BRW was at pains to point out that the warrant sought documents relating to Tszyu “that may provide evidence of crimes by others, not by him” and there is no suggestion that he’s been involved in tax avoidance or evasion.

On June 5 Tszyu had his second loss as a professional boxer. He lost his International Boxing Federation junior welterweight title against Ricky Hatton in Manchester.