The High Court has found for City law firm Collyer Bristow and two of its former partners in a litigation fund-backed claim that centred on the failure of 19 complex investment schemes.
The defendants had faced a claim for £60m, brought by 555 claimants. The claim, in which Addleshaw Goddard and niche litigation firm Enyo acted for the claimants, was funded by a financial package that combined a discounted conditional fee agreement and £5m of litigation funding from Allianz ProzessFinanz. The brokers were Calunius Capital and The Judge.
Giving judgment, Mr Justice Hamblen decided that the core allegations of conspiracy, fraud and associated dishonesty relied on by the claimants were 'largely rejected on the evidence'. 'On the evidence at trial I have found that there is no substance in the very serious allegations which have been made against Collyer Bristow and that all claims against them should be dismissed.' He added: ‘Although the claimants are understandably aggrieved to lose their cash contributions and receive back only limited tax relief, there are obvious risks in going into aggressive tax schemes which offer the possibility of almost immediately doubling your money.’
Commenting on the judgment, Collyer Bristow's senior partner John Saner said: 'This decision comes at the end of a lengthy and difficult legal process and I am delighted that our firm has been totally exonerated.'
The schemes, arranged between 2002 and 2005, sought to take advantage of tax relief available on investments in information and communication technology. The schemes were set up in the first instance as LLPs. Former Collyer Bristow partner John Bailey acted at one point as chairman of the scheme promoter Innovator One.
Bailey’s solicitor Nicola Boulton, partner at Byrne and Partners, noted that the terms of the judgment underline the risk in funding litigation of this sort.
Boulton said: ‘The litigation funding was a way of bringing together so many claims. But was it ever really right for this sort of case? [The claimants] were murdered in the judgment.’
She added that defence costs amounted to some £15m, which she doubted the claimants’ after-the-event policy would cover. Her client would be seeking to recover costs, she added.
Kingsley Napley and Segens Blount Petre acted for the other defendants. Former salaried partner Jonathan Roper was also not at fault.
This article was amended on 24 May 2012