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Client Type: Individual

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 perfect presentation without any foundation…

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Advice was required by investors in relation to false and misleading statements made to induce them to invest in a large group of companies.  It is alleged that the investors were misled as to the inherent value of the business with its value said to be more than £50m when the value of the business was nowhere near this amount.

After a number of years, the investors realised from a document belonging to the company that the investors may well have been misled. This led to the investors narrowing their focus to misrepresentation of value, and pursuing a claim against not only the company in which they invested, but also the individuals who caused the valuation to be produced to them. Losses are estimated to be in excess of £400,000.

The one with the defendant claiming to have no money…

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Advice provided to two investors were victims of fraud following their purchase of a commercial property.  Once judgment was obtained for the client for more than £2m, advice focussed on asset tracing.  The Defendant claimed to have no assets.  However, through a series of non-party disclosure applications in the High Court, the clients ascertained the whereabouts and value of assets held by the Defendant, totalling more than £1m.

These disclosure applications enabled the clients to obtain disclosure from more than ten third parties including pension funds, banks and the Land Registry.  A freezing injunction previously ordered in favour of the clients was extended to cover these assets.  This in time resulted in enforcement and recovery of a large proportion of the judgment debt.

The one with the oligarch with no money in their name…

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Assistance was provided to a specialist international arbitration legal team in relation to threatened proceedings between two wealthy individuals. Advice was needed to understand the asset profile of the proposed Defendant.  Advice was provided to in relation to undertaking asset enquiries in jurisdictions including Russia, Ukraine, United States of America and Cyprus. This was to help the team advising one of the parties assess the merits of pursuing proceedings, particularly considering the risk of challenges in enforcement of any favourable arbitration decision subsequently obtained.

The one with property opportunities promising immediate profits…

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Advice was provided to a group of 340 plus property investors in relation to understanding whether they have been victims of an alleged fraudulent property scheme run by two companies that were later in liquidation.  The scheme resulted in the clients investing into properties in numerous companies including domestically in the UK and further afield in Spain, the United States and Cyprus.

With the benefit of litigation funding, the clients were advised to make an application for non-party disclosure in the High Court against the liquidators of the two companies. We obtained the companies’ books and records.  These documents required 1-2 weeks to review. The review revealed the internal communications and mechanisms of the companies.

Review of these documents revealed that several individuals within that organisation had directed misrepresentations to be made to hundreds of investors (including the clients) relating to property sales.  These misrepresentations concerned due diligence having been undertaken and discounts being provided on property purchases off plan which was not true. This led to many loss-making investments for the clients, many of whom losing life savings as a result.

By obtaining non-party disclosure of the companies’ books and records, this enabled the clients to be able to structure their legal case against the individuals that perpetrated the fraud against them.

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.