Football League sues its solicitors over ITV Digital collapse

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The Football League yesterday began one of the biggest claims for professional negligence in British legal history, claiming its former legal advisor was responsible for lost income of £150m after the collapse of the pay-TV company ITV Digital.

The League claimed in the High Court in London that Hammonds Solicitors, which at the time traded as Edge Ellison, failed to ask for payment guarantees when the firm acted in 2000 for the League in its broadcasting deal with ITV Digital. The firm was accused of failing to protect the League's interests, being negligent and being in breach of contract.

ITV Digital, or OnDigital as it was originally known, was an attempt by its parent companies, Carlton and Granada, to challenge Sky's dominance in sport. It collapsed in 2002.

The League subsequently sued Carlton and Granada in an attempt to recoup £132m in broadcasting fees it said it was owed. The High Court ruled that ITV Digital's owners were under no legal obligation to honour their collapsed subsidiary's debts, because neither company had given financial guarantees.

The League is now suing Hammonds directly. It is rare for such cases even to reach court and an out-of-court settlement, funded by indemnity insurance though not worth £150m, is still a possible outcome.