Saturday, November 13, 2004

Diana fund officals face fresh new suit

Diana Fund officials face fresh US court appearance
By Andrew Alderson, Chief Reporter
(Filed: 14/11/2004)

The officials of a charity set up to honour Diana, Princess of Wales will face public scrutiny in a United States court despite settling a £14 million legal action from an American souvenir company last week.

The Franklin Mint is continuing to sue the American law firm that represented the Diana, Princess of Wales Memorial Fund, The Telegraph learnt yesterday.

A Franklin Mint Princess Diana doll and plate
Andrew Purkis, the fund's chief executive, will be called to give evidence. However, the trustees, including Diana's sister Lady Sarah McCorquodale, will probably be spared court appearances.

The hearing is expected to take place in California next month when Manatt, Phelps & Phillips, a Los Angeles law company, will be sued for $25 million (£14 million) for its role in the "malicious prosecution" of the Franklin Mint. An official close to the Franklin Mint said yesterday: "We will be asking Dr Purkis to explain the circumstances in which the American law firm was hired in the first place." The law company, which is contesting the action, had advised the fund that it should sue the company for selling memorabilia bearing the Princess's image and name. Unsuccessful legal actions against the Franklin Mint have cost the fund £6 million in legal fees.

Dr Purkis said yesterday: "If I am summoned, I will simply tell the truth about the events as they happened."

The fund had hoped to avoid further scrutiny of its decision to begin legal action against the Franklin Mint which was intended to try to protect its "rights" to the late Princess's name and image.

The Mint and the fund last week reached an out-of-court settlement on the eve of a hearing in Los Angeles. The fund agreed to pay £14 million to charities chosen by both sides, and each side has agreed to pick up its legal costs - an estimated £2 million each.

The fund was set up in 1997, after the Princess's death, and has given more than £50 million in charitable gifts worldwide. However, in July last year, it announced that it had frozen further gifts worth £48 million because of the legal action.

The fund first sued Franklin Mint in 1998 but lost the case four years later at a cost of £4 million in joint legal bills. The Mint then counter-sued for "malicious prosecution".

Its owners, Stewart and Lynda Resnick, who have given £25 million to charity in the past eight years, claimed that their reputation and that of their company was unfairly maligned by the fund and its former US lawyers.

The couple were incensed by accusations that they were "stealing" the Princess's name and likeness.

Court papers filed by the Mint blame the US law firm for publicising the fund's law suit to "further their own business plan to generate similar litigation". They say the publicity was "filled with inflammatory allegations designed to damage the Mint's sales efforts . . . and sully [the Mint's] reputation and charitable endeavours. The lead allegation was that the plaintiffs [the Mint] were akin 'to vultures feeding on the dead' ".

A spokesman for Manatt, Phelps & Phillips said yesterday: "We believe strongly in our moral and legal position and that we will prevail in this case. Our trust in the justice system gives us confidence that judge and jury will agree we acted responsibly and with integrity."

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