ALLEGATIONS AGAINST SOLICITORS THAT PROBABLY SHOULD NEVER HAVE BEEN MADE: CONSPIRACY, DISHONESTY AND DECEIT – ASSERTIONS THAT WERE JUST UNTRUE
There have been a number of recent cases of property companies, who have lost heavily in the property market, seeking to recover from solicitors (not necessarily always their own solicitors) for those losses. This trend can be seen – possibly at its most extreme – in the decision of Mr Justice Mann today in Mortgage Agency Services Number One Limited -v- Cripps Harries LLP [2016] EWHC 2483 (Ch).
The reason this case is dealt with on this blog is that the judgment deals extensively with witness credibility. Further it shows the difficulties and dangers of alleging fraud.
THE CASE
The claimant property development company lost heavily on a property transaction. It pursued an action against the valuers but did not recover in full (it appears because of contributory negligence). It then pursued an action against the solicitors. However the action was not in negligence it was in misrepresentation and fraud. Very serious allegations against the lawyers involved. All of those allegations were rejected by the court.
THE FINDINGS
In a thorough 474 paragraph judgment the allegations against the solicitor (and legal executive) involved were rejected. The judge rejected every one of the allegations about the lawyers.
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It follows, therefore, that the claim in this case is dismissed. [the lawyers] stand entirely exonerated of the serious matters alleged against them.
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By way of post-script I add one last observation. I am aware that I have dismissed a large number of allegations. Not all of them could be dismissed immediately, and [the lawyers] have had questions that they had to answer about certain things they did and said. One might wonder how a claim can be brought and sustained over so many points (some merely evidential, some going to the actual claim itself) and yet fail on all of them so comprehensively and it be found that there is nothing in the claim or allegations at all. The answer to that is twofold.
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The first is that the prospects of establishing a fraud are not directly proportional to the number of adverse allegations made. The second lies in what I think seems to have happened in the genesis of this case. The claimant was anxious to maximise its recovery in what was a fairly disastrous loan. It did not recover in full from its valuers; having heard the evidence in this case, and without making findings on the inducement/causation part of this case, I will merely say that I am not surprised that contributory negligence was run by the surveyors, as I am told it was. When attention turned to CHH the claimant donned its fraud detection goggles, turned the sensitivity up to High and attributed a dishonest motive to every interesting feature in the landscape (in very delayed proceedings). That led to a large number of accusations of dishonesty being made. Some allegations came close to being allegations which should not have been made or sustained (though I acknowledge that the claimant did exercise sufficient judgment to abandon some allegations after the close of evidence). Whilst motive is not a necessary ingredient in the claim, as I have frequently said, it is obviously important and I doubt if sufficient attention was paid to the realities of that part of the case, especially once the defendant’s evidence was complete. The result is that [the lawyers] have had years of anxiety, culminating in a trial, which they should not have had. They should now be freed from that anxiety.”
Reblogged this on | truthaholics and commented:
“474. The first is that the prospects of establishing a fraud are not directly proportional to the number of adverse allegations made. The second lies in what I think seems to have happened in the genesis of this case. The claimant was anxious to maximise its recovery in what was a fairly disastrous loan. It did not recover in full from its valuers; having heard the evidence in this case, and without making findings on the inducement/causation part of this case, I will merely say that I am not surprised that contributory negligence was run by the surveyors, as I am told it was. When attention turned to CHH the claimant donned its fraud detection goggles, turned the sensitivity up to High and attributed a dishonest motive to every interesting feature in the landscape (in very delayed proceedings). That led to a large number of accusations of dishonesty being made. Some allegations came close to being allegations which should not have been made or sustained (though I acknowledge that the claimant did exercise sufficient judgment to abandon some allegations after the close of evidence). Whilst motive is not a necessary ingredient in the claim, as I have frequently said, it is obviously important and I doubt if sufficient attention was paid to the realities of that part of the case, especially once the defendant’s evidence was complete. The result is that [the lawyers] have had years of anxiety, culminating in a trial, which they should not have had. They should now be freed from that anxiety.””
This case appears to me to be symptomatic of a trend to go after anyone who may be able to meet a judgment if you can get one. The recent case of Mishcon de Rea is another such. In the latter the court ‘gave in’ and said in effect that the claimant could have a judgment against that firm ‘although it had done nothing wrong, but because it is insured and so is best placed to deal with the claimant’s loss’. So now throw away all those contract and tort books. Forget about snails in ginger beer bottles, put Hedley Byrne in the bin and simply ask “Is your opponent insured? If so we go after him, if not forget it, the cost of the proceedings will ruin you and you’ll get nothing even if you win. Lord Wright’s ‘neighbour principle’ might just as well never have been written. Who is my neighbour should now be restated as ‘ who, if anyone, is my neighbour’s, or anyone else’s involved, insurer?’
Good on you Mr Justice Mann for having the backbone to stand up to this trend. But bad on you Ben Hubble Q C and Burgess Salmon for trying it on. You got exactly what you deserved a right, royal raspberry! It is a pity that costs on the indemnity basis were not awarded. Have you any conception what you put those two ladies through? Have you even stopped to ask? Do you care? Answers, as Mrs. Thathcher once said “No, no, no!”