Property developers have failed in a bid to prove that a Yorkshire law firm covered up evidence of negligent advice.
Mr and Mrs Chandra and BPC Hotels, claimed that partners of Brooke North destroyed or removed documents which proved they had given negligent advice in a failed property deal.
The case goes back to the late 1990s when Mr and Mrs Chandra and BPC Hotels invested in a hotel development and instructed Brooke North to act for them. Costain was appointed as the main contractor with funding provided by RBS. The development got into difficulties and eventually RBS appointed administrative receivers. The project was completed with £4.2 million owed to the bank. The Chandras’ had provided RBS with personal guarantees and the bank successfully brought proceedings to repossess their home.
Mr and Mrs Chandra accused Brooke North of negligent advice. When their claim failed they went on to accuse the firm of covering up evidence of their negligence. The judge, Mr Justice Edwards-Stuart, sitting in the Technology and Construction Court, found no evidence to substantiate the Chandras’ claim. “‘There is not a single allegation made by the claimants in the particulars of claim in relation to deliberate concealment that can be categorised as anything but wishful thinking,” he said. “They do not establish anything approaching a case with a realistic prospect of success.”
The Chandras’ cover-up claim has been reported in Law Society Gazette.
In the earlier case the Chandras’ had unsuccessfully claimed that Brooke North had acted negligently in advising them on guarantees and warranties and for failing to negotiate their exit from the project. The claims failed, principally because they were brought outside the limitation period. Barristers Hardwicke, has reported on the complex limitation arguments which arose from the case.
“The Chandras’ case has been a long-running saga which highlights a number of issues for solicitors and their insurers,” said James Burgoyne, Director – Claims & Technical, Brunel Professional Risks. “First, it shows that professional indemnity insurance can be called upon many years after an event to fund the defence of an action and second it highlights the importance of limitation periods in defending against accusations of negligence.”