The Court of Session in Edinburgh has awarded a property development company £2.7 million in compensation for the financial advice professional negligence and “breach of contract” of its commercial property lawyers.
According to a judge sitting at the court, the legal firm was “negligent” in failing to ensure that the developer adhered to two revolving credit facility agreements and, as a consequence, sustained substantial losses.
Furthermore, it was argued that had the legal firm advised the developer to ensure a standard security over one of its Glasgow development sites, losses would have been mitigated and no breach would have occurred.
According to Lord Tyre, hearing the case, it was “self-evident” that some form of negligence had occurred.
“Putting the matter bluntly, the breach called in March 2008 ought not to have occurred,” the judge said.
In giving his written opinion, Lord Tyre said that a failure to ensure a security for the site or, alternatively, to ring-fence it from the loan-to-value calculation, constituted the major thrust of the financial advice professional negligence claim.
“In my opinion the bank could not rationally have refused to accept one or other of those alternatives, given that the former at least had no discernible downside for the bank and that the consequence of accepting neither would have been to put the pursuer actually or potentially in default by triggering a breach of the covenant. That would not have been a commercially sensible course of action,” he said.
For information regarding your rights in relation to financial advice professional negligence, click here for more from the professional negligence solicitors at Healys LLP of Brighton and London.