Freshfields sued over alleged breach of duty

CITY firm Freshfields is being sued by Reuters for an alleged breach of duty.

The case centres on advice given by a Freshfields lawyer to the international news service five years ago, over the purchase of a company.

In 1993, Freshfields carried out a due diligence investigation on behalf of Reuters into VAMP Health - a health information company subsequently bought by Reuters for £13m. Reuters now claims the law firm failed to alert it to a contract between VAMP and Intelligent Computer Services (ICS) that ate up all but £100,000 of VAMP's £1.7m annual profits in 1993.

Under the agreement, VAMP had exclusive rights to sell ICS' "Talk" computer systems in the UK, and agreed to pay the computer firm certain sums if it failed to meet given sales targets. Sales were disappointing, and ICS launched legal proceedings for £1.6m against the company.

A Freshfields spokeswoman says the firm cannot comment on the case in detail, but that "we will be defending the writ vigorously".