National law firm Irwin Mitchell has been granted summary judgment in a professional negligence claim because the retainer prevented its former client assigning his cause of action.
The former client is Paul Baxendale-Walker, a colourful and controversial struck-off solicitor who went on to become an adult film producer and actor, and bought Loaded magazine.
In 2013, APL Management loaned Mr Baxendale-Walker £3.9m to remortgage his Surrey mansion at a high monthly interest rate of 2.8% – or 33.6% a year.
He stopped making repayments the following year and instructed Irwin Mitchell to explore challenging the loan for being in breach of consumer credit legislation.
The firm issued county court proceedings on his behalf but in early 2015 Mr Baxendale-Walker changed solicitors. The claim went to trial in 2016 and largely failed.
In 2017, a circuit judge made a declaration that the balance due from Mr Baxendale-Walker was £6.8m.
APL was granted a possession order in 2018, the same year that Mr Baxendale-Walker was declared bankrupt. We reported a year ago that he had been handed a 10-year bankruptcy restrictions order.
In 2019, Mr Baxendale-Walker signed a deed of assignment purporting to assign his causes of action against Irwin Mitchell to Burleigh House (PTC) Ltd, a corporation domiciled in the British Virgin Islands.
It issued proceedings in both contract and tort alleging that Irwin Mitchell was negligent in failing to advise Mr Baxendale-Walker to accept refinancing terms he had been offered or to explore what refinancing might be available.
Irwin Mitchell’s standard terms and conditions provided: “You may not assign all or any part of the benefit of, or your rights and benefits under, the agreement of which these standard terms and condition [sic] form part.”
Deputy Master Hill QC held that the clause on its face precluded assignment of the right to sue in contract and the claimant did not have a real prospect of showing that it did not also preclude assignment of the right to sue in tort.
The Fiona Trust principle dictated that the rights under the agreement included tortious rights. “I accept the defendant’s arguments as to why permitting the tortious rights to be assigned would be uncommercial and undesirable.
“On that basis, per Fiona Trust, it is to be assumed that the parties would not have intended such consequences without clear language to that effect, and there is none.”
Deputy Master Hill granted summary judgment.