BGC Partners, the interdealer broker, was following the established customs of a “tough” and “tribal” industry when it tried to hire several staff from rival Tullett Prebon, the High Court heard today.

The approaches, which resulted in a number of senior brokers quitting Tullett for BGC, were “quite normal,” Andrew Hochhauser, QC, for BGC said.

Tullett has sued BGC claiming it engaged in an unlawful conspiracy to poach around 50 of Tullett’s top performing brokers – referred to as its “crown jewels” - that would effectively ruin its London business.

BGC denies the claims and this morning Mr Hochhauser outlined the firm’s defence to Mr Justice Jack, saying BGC’s tactics were entirely lawful and identical to those regularly used by Tullett.

Mr Hochhauser said Tullett and BGC were “bitter rivals” and that: “both have sought to recruit the other’s staff, and indeed those of the other main players in the market.”“

“Both have a history of pursuing and defending litigation of this nature - today’s poacher is tomorrow’s gamekeeper and vice-versa,” he said.

Mr Hochhauser introduced the interdealer broking business as one whose “raison d’etre is to make money and it’s frankly not for the faint-hearted.”

Brokers who work together for many years form close friendships, he said “and indeed it’s fair to say it’s fairly tribal in nature.”

“If an employee indicates that he wishes to go to a competitor that is not well received by the employer for whom he works even if it is completely lawful."

“Indeed, when an employee decides to leave, his friends may follow,” he said.

Tullett’s case stems from the defection of its former chief operating officer, Tony Verrier, who joined BGC in January 2009 and allegedly masterminded the poaching raid. Tullett is suing BGC as well as Mr Verrier,

Mr Hochhauser said Mr Verrier was “the Pied Piper of Tullett Prebon” and it was only natural that others may wish to follow him to BGC.

But he said BGC’s recruitment methods were lawful and “not the outrageous flouting of legal obligations portrayed by Tullett.”

Mr Hochhauser added that BGC believes that Mr Verrier, who is represented separately, used all lawful means at his disposal to encourage Tullett brokers to join him at BGC.

Mr Hochhauser said the type of contracts offered to Tullett brokers were lawful and had been used by Tullett. Smilarly, the promise of “golden hello” sign-on bonuses were accepted standard practice, popular in the industry because they could be used “to pay off the mortgage” the court heard.

After a group of Tullett brokers agreed to join BGC and signed contracts, Tullett attempted to persuade them to stay, Mr Hochhauser said, with “a carrot and stick approach”.

“One the one hand Tullett threatened to sue them for substantial damages and on the other offer upfront payments to induce them to walk away from their contractual agreements to BGC.”

Following negotiations, Tullett used an unnamed broker as a “mole to spy on his colleagues and report back”.

Mr Hochhauser said that in their desperation to prevent staff joining rivals, interdealer broking firms had become “like magpies” constantly taking parts of other people’s contracts to make their own stronger and lock their staff in for longer.

“The starting principle is that the law encourages competition,” Mr Hochhauser said,

“It’s important to remember that the more that interdealer brokers seek to prevent brokers from enjoying employment mobility, the more important it is for the court to safeguard a right for lawful and permissible recruitment.”

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