Giambrone: Told clients they were making safe investments
A law firm with offices in Italy and England has reached the end of the line in challenging a ruling that it was under a duty to warn British and Irish property investors of the risks of investing in a part of Italy associated with organised crime.
The Court of Appeal upheld the decision of Mr Justice Foskett, and the Supreme Court has now refused to hear a second appeal.
A panel made up of Supreme Court president Lady Hale, Lord Sumption and Lord Lloyd-Jones refused permission to appeal “because the application does not raise an arguable point of law”.
In the Court of Appeal last year, Lord Justice Jackson said that Gabriele Giambrone suggested that everything was above board and the clients were making safe investments in holiday homes when he knew “perfectly well about Mafia activities affecting all sectors in Calabria, including the construction sector”.
He upheld the July 2015 ruling of Foskett J in favour of 185 investors who claimed that the firm Giambrone & Law and its partners had failed to act properly in their interests in the transactions, which involved purchasing off-plan apartments in a development on the coast of Calabria.
Following delays in construction, the claimants pulled out of their purchases, but lost their deposits as Giambrone had already been them paid out, even though certain required guarantees from the developers had not been provided.
The deposits, which ranged from £30,000 to £105,000 each, were paid out to the developers and promoters of the scheme on a 38/62 split. Giambrone did not inform its clients that so much was going to the promoters as commission.
There is no suggestion that any of the defendants were involved in mafia or other criminal activity.
Lord Justice Underhill said: “I was at first dubious whether Giambrone could really be under an obligation to advise clients about the prevalence of organised crime in the construction industry in Calabria, which might be said to go more to the overall wisdom of the purchase than to a matter within the remit of a lawyer, even a lawyer advising on a foreign purchase.
“But it is, again, necessary to bear in mind the very particular circumstances of this case and the width of the role undertaken by Giambrone; and I have come to the conclusion that the judge was entitled to make the finding that he did.”
In all, Foskett J held that Giambrone was in breach of duty to the claimants in eight respects, including the failure to tell them about the involvement of the Mafia in the region.
Mr Giambrone has already faced regulatory action over the events, with the Solicitors Disciplinary Tribunal ordering in 2013 that his name be withdrawn from the Register of European Lawyers.
