By IRENE CHAPPLE
The litigation stems from the mid '80s, when former Russell McVeagh partner Paul Carran promoted bloodstock investment partnerships.
Their failure led to out-of-court settlements, believed to have been up to $20 million, to some of the more than 300 investors.
In 1996 the Auckland District Law Society set up a complaints committee to investigate Russell McVeagh for misconduct. In May this year the Privy Council disallowed the society's use of certain documents.
The Auckland District Law Society has abruptly quit its long-running secretive battle with legal giant Russell McVeagh.
The firm received a fax late on Wednesday saying the investigation into failed bloodstock investments, which has cost the society at least $1.5 million, had been dropped and the complaints were dismissed.
The withdrawal appears to have happened because the society, under a Privy Council ruling, is unable to use certain documents critical to its case.
The move comes after 20 years of bad blood and seven years of litigation which had travelled to the country's highest appellate court, the Privy Council.
The law society's executive director, Margaret Malcolm, was tight-lipped yesterday about the decision.
She said she would not normally comment on a legal outcome but since the Herald had approached the society, "We feel in this situation we are obliged to confirm [the withdrawal]".
No charges would be laid, she said, but the society did not feel disappointed because it "has an obligation to investigate and that's what has been done".
The withdrawal comes 10 weeks after a scathing Privy Council decision accused the society of having a cavalier attitude towards the use of privileged documents.
Those documents were obtained when investigating one Russell McVeagh partner but were then used to investigate others.
The Privy Council overturned an Appeal Court decision in deciding the documents could not be used for purposes wider than for what they had originally been obtained.
The society faces costs payable to Russell McVeagh of about $500,000 for the unsuccessful trial.
Asked if the documents were vital to the case, Margaret Malcolm said she could not comment.
But she added: "It is fair to say the matter has been dealt with in the Privy Council as to whether the law society was entitled to use that information and it was not. The committee has looked at the information it has and it is not sufficient."
She said cost was not a factor in dropping the case. Lawyers have previously faced increased levies to cover the cost of the litigation.
Russell McVeagh chief executive Gary McDiarmid said he was pleased and that the firm was assessing "where to go from here".
Bad blood runs dry as law society drops 7-year case
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