Fladgate Fielder faces a negligence action from John Mundy, a former client who claims the firm breached its duty of care when advising him on an investment scheme run by Orb, the Jersey company at the centre of an ongoing investigation by the Serious Fraud Office.
In a claim form issued last month, which the firm is contesting, Mundy alleges that Fladgate Fielder partners Antonia Brandes and Eammon Cannon, who has since left the firm to become a consultant at Nabarro Nathanson, advised him to invest in a double-your-money property scheme run by Orb.
Under the scheme, Mundy says he was offered the opportunity to invest in flats Orb was developing. Brandes allegedly advised Orb on the development, but Cannon did not.
Mundy was to pay a deposit of £25,000 per flat, which he claims Fladgates said would be returned to him at a later stage, with a premium of another £25,000 once a replacement buyer for the flats was found.
Mundy contends that Fladgates should have advised him to take independent legal advice on the investment. He also alleges that he was told a number of Fladgates partners were investing in the scheme.
Mundy invested in two flats, and although one has been sold, he says he has received neither the deposit nor the premium. The other flat has not been sold and Mundy says he faces a demand by Orb for the remainder of the deposit and a demand to complete the purchase at the agreed price of £780,000.
Fladgates filed a defence to the claim last week. The firm’s head of property Allen Cohen said the firm was defending the case.
Mundy and his solicitors Dawsons declined to comment.