Law firms could face more claims
Friday 02 February 1996
Britain's leading law firms are braced for the sort of negligence suits that have recently plagued accountants following the news that Clifford Chance is facing a C$1.3bn (pounds 610m) claim from four Canadian banks that suffered heavy losses in the collapse of Canary Wharf in London's Docklands.
The banks - Royal Bank of Canada, Canadian Imperial Bank of Commerce, Bank of Nova Scotia and National Bank of Canada - allege that incorrect information from Clifford Chance, the City's largest firm of solicitors, put them at a disadvantage during the restructuring that followed the project's failure and placing into administration in 1992.
The claim, which is thought to be the biggest suit against a London law firm made public, is contained in writs filed simultaneously in Britain and Canada by Freshfields, another leading international law firm, and two Canadian firms, Tory Tory DesLauriers & Binnington, and Blake, Cassels & Graydon.
It arises from loans totalling pounds 450m made by the banks to Olympia & York Developments, the holding company for the Canary Wharf development. The banks allege that Clifford Chance advised them in 1989 that the company was a private limited company when in fact it had unlimited liability.
This meant, they add, that they were unable to exercise their rights over the money without becoming liable for the project's entire debt. As a result of not intervening they were excluded by the administrators from the restructuring project.
The banks' involvement ended late last year, when a consortium led by Paul Reichmann, whose family owned the collapsed Olympia & York, bought it. The claim against Clifford Chance was filed last June - before the sale was completed.
The administrators, Ernst & Young, would not comment. But Clifford Chance, whose senior partner is Keith Clark, released a statement saying it was "confident that there is nothing to worry about".
It added: "To date no evidence has been produced to us that any loss was incurred by these banks in relation to these loans following the collapse of Olympia & York as a result of any alleged negligence on the part of Clifford Chance. If the banks pursue the claim, they will have to provide evidence of the alleged loss."
- 1 Hair loss explained: How and why men go bald
- 2 Game of Thrones season 6: Jon Snow theorists believe the Stark may have a twin sister
- 3 Artist takes LSD, draws herself over different stages of the 9-hour trip to show its effects
- 4 A pint of water every day is the key to losing weight, scientists say
- 5 Russia 'accidentally reveals' number of its soldiers killed in eastern Ukraine
Most expensive city to live in for expatriates: Luanda, Angola takes number one spot with Hong Kong and Zurich in top three
Video of Irish 'professional boxer' fighting Istanbul neighbourhood goes viral in Turkey
Irish tourist filmed fighting with shopkeepers in Turkey says they 'messed with the wrong man'
House of Lords: Outcry as donors, fixers and MPs caught up in expenses scandal get peerages
Moody neurotics are more likely to be creative geniuses, study says
Dresden riots: Protesters in Germany attack refugee buses shouting 'foreigners out'
France train shooting: US soldiers speak of the moment they stopped gunman and 'beat him until he was unconscious'
Labour leadership: Jeremy Corbyn accused of 'deluding' young supporters with 'claptrap'
'Women only' train carriages: Jeremy Corbyn unveils radical move to tackle public harassment
Black holes are a passage to another universe, says Stephen Hawking
Iain Duncan Smith calls for urgent ESA overhaul as part of drive to cut down welfare costs
iJobs Money & Business
£13000 - £25000 per annum: Recruitment Genius: Would you like to be part of a ...
£20000 - £25000 per annum + competitive: SThree: Are you passionate about sale...
£25000 per annum + benefits: Ashdown Group: A large financial services company...
£20400 per annum: Ashdown Group: An established and highly reputable organisat...