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Client Type: Individual

The one with the alleged backhander…

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Advice was provided to directors of a company of a telecoms and internet services business in relation to allegations made against them by a housing association.  It was alleged by the housing association that the company client had won the supply of telecom and internet services by inducing the head of procurement into favouring the company’s tender.  The case involved advising the directors of the telecoms company to defend proceedings brought against them including challenging a freezing injunction against the company and its directors of more than £2m in value.

The freezing injunction was successfully opposed with the clients discharging the freezing injunction and obtaining a sizeable costs order. Our understanding of key arguments to be considered when challenging the freezing injunction, especially concerning whether there was risk of the directors of the clients dissipating (i.e.moving) their assets enabled the clients to succeed.  This result led to an early resolution of the proceedings.

The one where the solicitors failed to spot the fraud…

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Advice was provided to victims of a property investment fraud in relation to a negligence claim against their legal advisors on the property transaction.  Advice was provided to the clients in relation to recovery of losses from their former solicitors. It was alleged the former solicitors had failed in their duty of care by not advising the clients to withhold from completion on the said property transaction due to there being sufficient information available to allege fraudulent misrepresentation. 

The former law firm had advised the clients that they had no choice but to complete on the transaction which ultimately led to a loss of in excess of £2m.  Whilst some recoveries were made from the fraudsters causing the loss, a sum in excess of half a million pounds was recovered from the insurers for the law firm due to their failure to detect the fraud and the advice to the clients to conclude the property transaction.

The one where the failure of solicitors to identify a route to claim loss caused by the fraud.

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Advice was provided to individuals who had been the victims of fraud.  It was alleged they had suffered loss caused by former litigation solicitors who had failed to pursue an application for a freezing injunction.  The allegation was that the scope of duty of the solicitors included advising on the best options for recovery and construction of a claim.

The nature of the fraud alleged being a property transaction was not truly understood by the law firm advising as to the options for redress. As a result, the merits of pursuing a claim in misrepresentation together with an application for a freezing injunction were not considered.  As a result, the clients did not pursue that application and assert their claim against the fraudulent party until approximately two years later when advised by other solicitors.

That delay caused an increase in loss to the clients due to the nature of the fraud (they were locked into a transaction and could not mitigate their loss without recovery). A claim was brought against their former solicitors for professional negligence.  The claim was resolved leading to a six-figure settlement.

The one with the property purchase and authorised push payment fraud…

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Advice was provided to individuals that when purchasing a property were defrauded through an authorised push payment fraud.     The solicitors advising on the property transaction did not provide any advice on the risk of cybercrime and a claim was therefore made against the conveyancing firm in negligence for failing to provide advice and guidance that may have enabled their client to avoid the loss suffered.

A letter of claim was sent to the solicitors with their insurers thereafter making proposals to resolve the claim.

The one with promises, lies and more lies

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Advice was provided to a group of investors in relation to seeking to “pierce the corporate veil” to help bring a claim against a company’s directors and shareholders who had led them into a series of loss-making property purchases. Those property purchases benefited the former directors and shareholders of the company in question.

The advice provided identified a claim against the former directors and shareholders who had been directing and managing the operations of this property investment company. This company was an agent for the investors and the advice provided identified claims alleging certain individuals had been dishonestly assisting the company to breach fiduciary duties owed to the investors. The work we undertook identified personal claims against the numerous individuals in relation to loss over more than £40m.

The one where false accounting by one director/shareholder caused loss to the other…

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Advice was provided to a shareholder in a small construction company relating to their fellow shareholders’ misconduct.

The defendant shareholder had been misrepresenting the financial performance of the company and hiding his diverting profit out of the company.   The advice provided assisted the client to the allegations with evidence in support.   This led to correspondence alleging deceit and breach of fiduciary duties.  A resolution was reached to the client’s satisfaction without the need to issue court proceedings.

The one with the need for control

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Advised minority shareholders in a manufacturing company in relation to allegations that the majority shareholders had been deceiving them about profitability and monies extracted through alleged management charges.

Our advice led to the client being directed to issue an unfair prejudice petition alleging the various elements of the breach of duties and prejudicial conduct of the majority shareholders. This created focus on the issues and created risk to the majority shareholders.

During proceedings, a resolution was achieved resulting in the clients making sale of their shares to the majority shareholders and achieving a conclusion in their favour in excess of £500,000.

The one with the business partner that drained the business of cash…

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Advice provided to an individual within the construction sector in relation to concerns of diversion of money by a joint venture partner and fellow shareholder.  The client did not have access to the bank records of the companies that were said to be part of the joint venture.  He needed that information to demonstrate that the Defendant had been misappropriating and diverting assets away from the companies.

Advice was given to seek non-party disclosure from the banks hosting the accounts of the companies.  The bank statements revealed the extent of the alleged diversion of monies and assets of the joint venture companies.   Using this information, the client then proceeded to construct the allegations in his case leading to successfully obtaining a freezing injunction for £650,000.   This gave the client the protection he needed to pursue his claim given concerns that the Defendant would move assets to evade judgment.

At a later stage, the Defendant attempted to vary the freezing injunction to use his main asset to defend the litigation.  That application was defeated in the High Court and the client was awarded his costs which increased the pressure on the Defendant.

The one with the pitch about being millionaires from the comfort of your living room…

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Advised a group of over 340 property investors in relation to an alleged fraudulent property scheme causing investment into properties in multiple jurisdictions including the UK, Spain, the US and Cyprus.  These property acquisitions led to investors being in negative equity and many suffered the loss of their life savings.  

With the benefit of litigation funding, the group obtained through a non-party disclosure application to the High Court, the now defunct companies’ books and records which revealed that a key number of individuals within that organisation had caused misrepresentations to be made to hundreds of investors relating to the carrying out of due diligence and genuine discounts being provided on property purchases off plan.  Our efforts enabled the parties to understand and detail the legal case they could pursue against individuals behind the company that was now insolvent.

The one with fraudulent facts in the music industry which were not music to the ears of the investors…

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Advised two individual investors in relation to being misled into buying shares in a company in the music production industry.  The individuals were misled through a series of misrepresentations as to the existence of contracts with certain entertainers apparently signed to the record label.  

Advice led to threatening an application for a freezing injunction due to alleged fraudulent misrepresentations which caused the clients to make their investments. The approach undertaken ultimately led to resolution of the claim with the investors retrieving more than 90% of their investment.