The High Court has allowed media law firm Olswang to escape being named as a defendant in a $400m (£267m) claim relating to work completed before the partnership converted to LLP status when it upheld a refusal to correct a mistake in naming it as a party.
Dismissing an appeal and cross-appeal from a refusal by Master Bragge to substitute the LLP named in the claim with the original Olswang partnership, HHJ Karen Walden-Smith ruled that the Master had reached his conclusion in such a way that an appellate court should not intervene.
In American Leisure Group Limited v Olswang LLP, ALG, a developer and resorts operator registered in the British Virgin Islands, sought to bring an action against four professional advisers in relation to its IPO in 2007, of which Olswang was one.
It was itself the defendant in a $400m claim brought in Florida by a trust company alleging negligent representations had been made upon which the trust relied.
ALG denied the claim but alleged that if was found liable, the defendants in its own claim were responsible. Its then solicitors, Collyer Bristow, drafted the claim against Olswang LLP and it was later served, in December 2013, by its current solicitors, JPC Law, within days of being statute-barred under the Limitation Act 1980.
The particulars of claim were similarly issued just within the four-month limit. Olswang LLP immediately applied to strike out the claim, to which Master Bragge acceded.
Judge Walden-Smith said the factors taken account of by Master Bragge in deciding not to exercise his discretion in favour of ALG, such as the delay in bringing the application to substitute Olswang for the LLP – which was incorporated in February 2009 – and the size of the claim, were reasonable.
Further, the fact that allowing the change would remove a limitation defence was also relevant, as was the “stress and anxiety” this would cause the partners, who were entitled to think they had that protection once the six years for taking action had passed.
She concluded that the fact the mistake by Collyer Bristow was one of “nomenclature and not an error as to liability” meant the Master had jurisdiction to substitute a party under CPR 19.5. But “the Master did not go outside the wide ambit of his discretion by taking into account irrelevant matters or failing to take into account relevant matters nor did he reach a conclusion that was so plainly wrong that the appellate court should intervene”.
A news story dating from August 2007 remains on the Olswang web site, declaring that “Olswang launches American Leisure Group on AIM”.
Master Bragge refused permission to appeal against his own decision but permission to appeal was given by Mr Justice Morgan.