The High Court has found decisively in favour of an international law firm in professional negligence claims worth a total of £50m.
Following a three-week trial earlier this year, Mr Justice Richards ruled that Womble Bond Dickenson (WBD) did not breach any duties over a failed property development.
In Siem & Ors v Womble Bond Dickinson the claimants maintained that WBD negligently caused them to lose an opportunity to earn significant profits from a proposed redevelopment in an expensive area of west London. WBD had acted for one of the claimants, Steven Wake, on matters relating to a development management agreement he would enter with another claimant, Kristian Siem. The firm never entered into any engagement with Siem although it had contemplated at various stages taking him on as a client.
The property deal collapsed before the development could proceed. The selling side in the transaction instructed its own lawyers to cease work, objecting to the buyers’ request for a retention provision, their refusal to exchange until an access issue was resolved and to the six-month delay between exchange and completion.
The court heard that Siem withdrew by email from the transaction, citing a lack of confidence in Wake’s ability to manage the redevelopment. The judge said Siem was a straightforward and direct businessman who thought the price was high and who judged the risk to be too great. It was found that Siem would have decided not to sign a transaction about three months before he withdrew.
Mr Justice Richards found the redevelopment had not gone ahead because of a commercial judgement rather than any legal errors. The judge rejected the submission that it had been inappropriate to suggest a retention provision which was ‘ostensibly quite measured’ and not an unreasonable request to make.
It was further found that there was no implied retainer between WBD and Siem for the provision of advice in relation to warranty protection in a draft share purchase agreement.
The judge said the claims all failed ‘for a number of reasons’. The firm did not act in breach of any duty at any point, the claimants failed to establish factual causation and none of the redevelopment schemes had a real or substantial chance of securing planning permission. An additional hearing will deal with costs.
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