b'No one at the firm enjoyed Christmas that year. Shortlyof Nauru in making its investment decisions. Ultimately the after Christmas, Jamieson approached the Law Society: theproceedings were settled.firm had secured a $10 million line of credit with Westpac. It had not been easythe bank was strained financiallyIn 1995 the firm initiated proceedings in the Supreme Court and the new CEO Bob Joss, recently arrived from the US,of New South Wales against its professional indemnity did not share the same close relationship with the firm asinsurers when they denied the firms claim to cover the his predecessors. The value of the firms art collection hadmoney sought by the Nauruan trustees. The insurers denial helped, as did the commitment of the partners to providewas based on a dishonesty exclusion in the policies. The firm the remaining $11 million if required.was successful against the insurers at first instance; however, the insurers were successful in overturning the decision According to Marsden it was the quiet dignity of Jamiesonin the New South Wales Court of Appeal, and the Court of that convinced him there was a solution other thanAppeals decision was later upheld by the High Court. receivership. The Law Society accepted the arrangement, and it was approved by the Supreme Court of New SouthIt felt like death by a thousand cuts, says LEstrange. Every Wales on 7 January 1993.time Powles was back in court, it would all get regurgitated.Soon after, Powles was arrested and charged with nineThe confidence of the firm was shaken and, in the months counts of misappropriating money totalling $455,000 (thisafter the Powles affair, the firm struggled financially. The related to the money he had invested for individuals). Hepartners had been absorbed in recovering the money was subsequently convicted and sentenced to seven yearsand setting the firm back on course, and competitors jail with a non-parole period of two and a half years.began circling. Early in the process more than sixty valued colleagues were made redundanta dark day for the firm The Nauruan Phosphate Royalties Trust initiated legalthat has never been forgotten. proceedings against the firm in the High Court of Justice in London seeking to recover the missing money. In itsAllen Allen & Hemsley was left traumatised, but its people defence, the firm argued the trust was not a client of thegalvanised and the firm slowly recovered. Former partner firm and Powless actions, in relation to the trust, werePhilip King said everything seemed manageable after outside the scope of the firms practice. The circumstancesPowles. If an issue arose the partners would simply shrug surrounding the disappearance of the funds remainedand say, Weve had worse.unclear. The UK fraud squad was unable to conclude a crime had been committed. Instead, it appeared Powles had been negligent in his role with the trust, as had the Government 201'