High Court throws out negligence claim against law firm and counsel

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10 June 2016


Soole J: no “arguable basis” for doubting barrister’s ability

The High Court has summarily dismissed a professional negligence claim brought by a hotel company against Midlands law firm Wright Hassall and a barrister, Max Mallin.

Mr Justice Soole rejected the argument by BPC Hotels that there was an “arguable case” that information provided to Mr Mallin “should have set him on a train of enquiry to identify and formulate another claim” against the company’s bank, RBS.

Soole J said Wright Hassall (WH) was in “no different” position from Mr Mallin (MM).

The judge said that “as to the allegation that it was negligent to instruct MM and that there should have been a specialist construction and/or commercial property lawyer”, he saw “no arguable basis” for doubting Mr Mallin’s suitability.

“Since there is no criticism of the instructions which were given by WH to MM, these must equally reflect their instructions from the claimants. In these circumstances they are in principle in no different position to MM.”

The court heard in BPC Hotels and others v Wright Hassall LLP and another [2016] EWHC 1286 (TCC), that BPC bought a Victorian office building in Manchester, with the aim of converting it into a four-star hotel. RBS lent the company over £10m for the purpose.

Soole J said that by early 2003 the project was “experiencing difficulties”, with “delays and cost overruns, for which each party blamed the other”.

RBS demanded that the married couple who owned the hotel company, Mr and Mrs C, increase their guarantees, and following legal advice from law firm Brooke North, they agreed.

In August 2003, RBS demanded repayment of over £12m from BPC, and appointed receivers over its business and assets.

Mr and Mrs C “considered the role which Brooke North had played in the hotel project” and “concluded that the advice and/or lack of advice from Brooke North had caused the project to founder”.

Soole J said Mr and Mrs C instructed Wright Hassall in 2009 to advise on a professional negligence claim against Brooke North. The law firm instructed Max Mallin.

The claimants argued that Wright Hassall was negligent in failing to obtain advice from or instruct a specialist construction/commercial barrister, ensure the claim forms were “drafted sufficiently broadly” and consider properly the advice given by Brooke North. The judge said the allegations against Mr Mallin were “in similar terms”.

However, counsel for the law firm argued that all the claimant’s allegations “lead or amount to the same thing, namely that the claimants should have been advised by Wright Hassall that there was an arguable claim that Brooke North should have identified”.

Counsel emphasised the “ad hoc” nature of the claimant’s requests for advice and argued that “all the evidence indicated” that Mr and Mrs C, rather than being in a strong bargaining position with RBS at the time, were in a “desperate” position.

Mr Justice Soole said the claims against the law firm and the barrister had “no real prospect of success” and should be summarily dismissed.


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