In New York, nine men and women are getting an October crash course about the perils of private equity. They have been chosen as jurors and tasked to decide whether Guy Hands’ Terra Firma Capital Partners is owed billions of dollars by Citi because the bank allegedly tricked the firm into overpaying for struggling music publisher EMI.
The jurors come from different backgrounds and different parts of New York State. One is a retired construction worker, another a social worker with a charity organisation. None of them come from financial backgrounds, and some of the finer points of the private equity plot may sound a little alien to them. But does this matter? Perhaps not.
My experience is in most cases, including this case, it comes down to a credibility contest.
The most important thing the nine men and women must do in Terra Firma vs. Citi is to determine credibility: who is being honest? Who is lying? In the final analysis, that is what court room situations like this one come down to, and according to the judge overseeing the case, Jed Rakoff, the jury, any jury, can be expected to be up to the task.
“My experience is in most cases, including this case, it comes down to a credibility contest,” Rakoff said Tuesday during a break in the proceedings. “That a jury of everyday folks are supremely gifted in ascertaining who is telling the truth and who is not.”
Never mind the huge amount of information the jurors are forced to take in – meeting minutes; drab details of legal contracts; the PR-spin of a company’s annual report. It’s all just background noise surrounding the judgements the jurors must make as they watch the principals testify.
And because it’s all about credibility, the lawyers’ job in this case is to boil everything down to its most simple components. Two days into the trial, it’s been an intriguing spectacle to watch.
Citi’s attorney, Theodore Wells from Paul Weiss, has so far proven to be the better communicator with the jury. Wells speaks with a drawl that would fit perfectly on a factory worker sitting in the pub with an after-shift beer. He has a slow way of speaking, sometimes pausing halfway through a question as if he has lost his thought. Then he resumes, and in a resonant voice that dispels any doubts that he may be distracted.
On Tuesday, Wells showed flashes of heat in some tense exchanges with Terra Firma head Guy Hands. Wells is a great user of hand gestures, pointing at everything from a PowerPoint presentation to a witness, to emphasise his meaning; occasionally splaying his arms out on either side of this body indicating something not to his liking.
His opponent, David Boies, represents Terra Firma. Boies is the noted “superlawyer” who represented former US Vice President Al Gore during the presidential election vote recount in Florida in 2000 that eventually led to George W. Bush’s victory.
Boies is very understated. He speaks softly and shuffles around the court as if not entirely certain of his steps. On Tuesday he seemed a little under the weather, interrupting his own questioning of witnesses with sniffles and loud throat-clearings. Sometime he pulled up the wrong piece of evidence to show on the huge projector screen in the court, on other times he stopped questioning to sift through documents before him.
Such minor mishaps do not mean very much in the legal context of the case. Also, Boies may prove to be an altogether different kind of litigator when he gets the chance to cross-examine witnesses. But remember, the job of the lawyers is to bestow the aura of credibility upon their clients, and that is why their differences in demeanour matter.
Of course, it’s still early days. Yesterday’s highlights were the testimonies of Hands and Tim Pryce, the firm’s CEO. Citi’s witnesses are yet to take the stand, and the bombardment of the jury with tons and tons of facts and figures is going to continue for some time. They’ll be listening carefully for as long as they can concentrate, all the while thinking about that all-important question: the one about who’s telling the truth; the one about credibility.