LONDON (Reuters) - The case for unfair dismissal brought by former Olympus CEO Michael Woodford following the uncovering of one of Japan’s biggest corporate frauds was delayed on Monday, sparking talk of an out-of-court settlement.
The employment tribunal began in London, throwing the spotlight back on a $1.7 billion accounting scandal that cost the camera-to-endoscope maker its board and reputation.
But briefly into the proceedings, which had been planned to last five days, presiding Judge Foxwell gave the legal teams for Woodford and Olympus until Tuesday morning to put the finishing touches to their cases.
The delay is a possible sign that Woodford and Olympus are negotiating a settlement.
“If there is an extra lag, there is always a chance to settle and it to go no further,” said Jo Keddie, a partner at law firm Winckworth Sherwood.
But it could also give the judge needed more time to prepare, or enable the feuding parties to finalize their arguments, she added.
Woodford, who was surrounded by his legal team from Simmons & Simmons carrying boxes of documents for the hearing, will be first to present his case on Tuesday.
Despite the delay, the judge said he still intended to wrap up the hearing by Friday, after hearing evidence from both Woodford and Olympus, represented at the tribunal by Slaughter and May.
Woodford, chief executive for just two weeks before being sacked, is expected to seek up to $60 million in compensation from his former employer, according to the Financial Times.
The compensation sought is expected to cover up to 10 years’ lost salary and could potentially mark a record payout.
By bringing a claim on the grounds of whistleblowing and discrimination in the employment tribunal, Woodford’s damages are unlimited, depending on whether he is likely ever to regain a career at global CEO level again.
Olympus has surprised some legal experts by failing so far to reach a settlement with Woodford, who has already published a book in Japanese about his experiences and plans another in English around October.
“This case is a graphic illustration of how an employee can bring an uncapped claim against his employer from day one and without any qualifying service condition,” said Anthony Fincham of law firm CMS Cameron McKenna, “and of course employers will often be concerned with the reputation damage that may ensue from a court appearance.”
Woodford was unanimously dismissed by the Olympus board last October after persistently demanding answers from top executives about a string of obscure and hefty payments linked to acquisitions.
He was told to vacate his Tokyo apartment, return his laptops and telephones and take the bus to the airport.
Olympus said Woodford was sacked because the 30-year company veteran failed to understand its management style and Japanese culture. But over the following weeks, regulators uncovered an accounting fraud stretching back over more than a decade.
Armed with a damning and high-level independent panel report slating “rotten” Olympus bosses as well as a report from auditor PwC PWC.UL — and against the backdrop of a clutch of arrests and an international investigation by U.S., Japanese and UK prosecutors — Woodford might appear to have a strong case.
But he first needs to show it can be heard in Britain.
Woodford, who was Olympus’s president for six months before also being handed the CEO role last October, has spent much of his career in Britain, where he owns an apartment in London and a home near Olympus’s UK headquarters in Southend, southeastern England.
His Spanish wife Nuncy teaches locally in Southend and his two children attended nearby schools.
If the case is thrown out on jurisdiction grounds, Woodford has said he plans a defamation suit in the High Court.
Editing by David Cowell