Berwin Leighton hit by £1m legal action

Berwin Leighton (now Berwin Leighton Paisner - BLP) is being sued for nearly £1m by advertising company Maiden Group.

The claim of negligence and breach of contract concerns work carried out for Maiden by two Berwin Leighton lawyers who are no longer with the firm. They are former partner Christopher Mackie, now a partner at Olswang, and solicitor Jo Wilkinson, who is now working in-house at airports owner BAA.

Maiden Group claims that advice from Berwin Leighton caused it to overpay by £750,000 when it bought a company called Adlight for £15m in 1998. Adlight provides illuminated advertising outside supermarkets, including Somerfield, Asda and Kwik Save.

In a High Court claim, Maiden, advised by DLA, claims that Berwin Leighton failed to carry out due diligence work with reasonable skill and care.

It states that Berwin Leighton failed to warn Maiden of a clause in Adlight's Somerfield contract allowing either party to end the agreement for the panels on only three months' notice if either party considered that the commercial value of any advertisements displayed had altered.

Just two months after Maiden acquired Adlight in April 1998, Somerfield decided that rents for the illuminated panels were too low at £395 a year. According to the claim, Somerfield invited and obtained bids from one of Adlight's primary competitors. Maiden eventually agreed to match the competitor's offer of £700 per panel each year.

The claim states that if Berwin Leighton had not been negligent, Maiden would have renegotiated with Adlight over the agreement with Somerfield, and would also have known that the costs of Adlight's business with Somerfield would be £754,185 more than anticipated. As a result, Maiden would have paid around £750,000 less for Adlight.

Maiden is suing Berwin Leighton for damages for breach of contract and negligence, and is seeking interest of £168,257.40 on its losses and continuing interest of £165 a day.

BLP said it is vigorously defending the action and has referred the matter to its law firm, Reynolds Porter Chamberlain. A court date has yet to be fixed.