and NIC CICUTTI
A couple who claimed Lloyds Bank negligently advised them to borrow pounds 150,000 to buy and renovate a house yesterday won an historic seven-year court action.
Julia Verity and Richard Spindler were awarded pounds 77,500 damages after Judge Robert Taylor, sitting in the High Court in Leeds, heard them chronicle events which led to "mental and physical stress".
They had claimed pounds 370,000. "We know we've won by proving bad advice, but we also know we could be made bankrupt," said Mrs Verity.
The judge said the case set no precedent for customers' dealings with their banks, a view echoed by Lloyds which is unlikely to appeal against the decision. A spokeswoman argued that the judge had used existing legal precedent to find in favour of the couple.
In 1988, Mrs Verity, 55, a teacher, and acupuncturist Mr Spindler, 36, of Henley-on-Thames, Oxfordshire, borrowed a total of pounds 150,000 from the Beaconsfield, Buckingham-shire, branch of Lloyds to buy and renovate a terraced house in Grey's Hill, Henley. Having spent thousands more on renovation, house prices slumped and in May 1990 they sold for pounds 135,000 - pounds 25,000 less than they anticipated.
The couple claimed they had been given bad advice which amounted to a breach of the duty of care a bank owed its customers. The manager, Maurice Hunt, told them their proposals to buy and renovate the house and sell it for a pounds 10,000 profit were prudent, and encouraged them to go ahead.
Judge Taylor upheld their claim. Mrs Verity had made it clear to the manager that she needed to make a profit of up to pounds 10,000. He said: "Their reliance on the advice caused loss of a kind that was reasonably foreseeable. In my judgment, if Mr Hunt had exercised reasonable care and skill in his advice he would have told the couple the project was not a sensible thing to do, and they should forget about it. Mr Hunt never adequately warned the plaintiffs of the risks involved."
Mrs Verity said after the hearing that the case had put a strain on their relationship."There is a big age difference between us - we hadn't intended to stay together - Richard should be out there looking for a young wife. Because of this case we had to stay together and go on to the end."
They criticised Lloyds Bank's refusal to end the case and let them get on with their lives. "We feel they are determined to make us bankrupt," said Mrs Verity.
A later court hearing will decide the level of damages for Mrs Verity for one year's loss of earnings, but Judge Taylor said the couple could not receive damages for emotional loss.
The bank spokeswoman said Lloyds branch managers would be required to review their future relationship with potential clients more carefully and ensure they were not giving advice on their business schemes.
She added that Mr Hunttook early retirement three years ago, when aged 62. "He had served 37 years with the bank. He was doing his job at the time and his main aim was that of helping the customer." No precedent, page 2
Leading article, page 14