A £68m negligence claim against Lupton Fawcett has been dismissed by the High Court, highlighting the complexities involved.
- The claim arose from companies in liquidation following failed property ventures, who alleged improper advice from the firm.
- Justice Sheldon also addressed a related claim against Metis Law, allowing amendments only if agreed by the firm.
- The fraud investigation by the serious fraud office into Gavin Woodhouse adds a layer of intricacy to the proceedings.
- Despite the dismissal, the legal distinctions made in this case have significant implications for future litigation.
In an intricate case involving significant financial stakes and legal complexities, a High Court judge has dismissed a £68m negligence claim against Lupton Fawcett, a Yorkshire law firm. The claim was initiated by companies now in liquidation, which were involved in unsuccessful property development ventures. The allegation centred on accusations that inadequate legal advice from Lupton Fawcett contributed to these failures. Justice Sheldon’s decision highlighted the multifaceted nature of the proceedings, which have undergone numerous iterations since their inception in April 2022.
The dismissed claim tied back to investments linked with Gavin Woodhouse, a businessman currently under investigation by the serious fraud office for suspected fraud and money laundering, charges dating back to August 2021. The claimant companies described themselves as victims of a Ponzi fraud, asserting that proper counsel might have averted their losses. However, Lupton Fawcett’s position rested on the assertion that their advisory role was confined to assessing compliance under the Financial Services and Markets Act 2000 (FSMA), rather than evaluating the ventures’ viability.
In tandem with the proceedings against Lupton Fawcett, Justice Sheldon examined a separate £57m negligence claim against former Leeds law firm Metis Law. This claim focused on Metis Law’s responsibility in advising on investment transactions and managing investor deposits from July 2016. The judge did not permit amendments to the claim, except those mutually agreed upon by Metis Law, citing redundancy concerns and the need for substantial justification.
The investments under scrutiny were initially promoted by Woodhouse and his business partner, Robin Forster, via the MBi Group from 2014 onwards. Despite a separation in business interests over time, Lupton Fawcett continued its advisory role on these schemes up to and beyond 2017. The collapse of these investment schemes eventually led to the claimants entering administration and liquidation, which in turn spawned the legal disputes.
Justice Sheldon’s ruling distinctly separated the issues of fund receipt and fund usage, a crucial legal determination that emphasises the limited scope of Lupton Fawcett’s duties. This decision serves to delineate the boundaries of legal advisories in similar cases, reinforcing the need for clear legal responsibilities in complex investment environments.
The dismissal of the claim against Lupton Fawcett solidifies the need for precise legal boundaries in advisory roles.
