City firm Gateley, the first legal practice to list on the stock exchange in its own right, is fighting a professional negligence claim in the High Court over advice to a British Virgin Islands-incorporated company.
A skeleton argument seen by the Gazette alleges in Moda International Brands Limited v Gateley that the firm failed to properly advise Moda International Brands Ltd (Moda) on a participation agreement it had drafted related to the development of premises in Nottingham. The agreement was made between Mortar Developments Nottingham Ltd (MDNL), Moda, and another individual.
Moda claims it is entitled to £378,815. Gateley, which has been invited to comment, is contesting the claim.
Leicester dispute resolution firm Ashteds, acting for Moda, claims in the skeleton that, had the agreement been properly drafted, Moda would have been entitled to receive 35% of all profits from the development of the site.
According to the skeleton argument, it ‘ought not to be in issue that it was the duty of the first defendant [Gateley] to exercise the standard of skill and care reasonably to be expected of solicitors with expertise in corporate law.’ The document states that Gateley denies breach of duty and causation.
Moda International Brands Limited v Gateley is being heard before Mr Justice Freedman this week.
Gateley, which floated shares on the alternative investment market in 2015, is regarded as a success story in the listed law firm sector. Last month it reported pre-tax profits up 18.6% to £5m on a turnover up 20.1% to £46.4m.