Howard Kennedy faces new negligence claim

Howard Kennedy 'strenuously' defends legal action as ex-legal executive is sued

Howard Kennedy has fallen foul of its second professional negligence claim in as many months. The firm is being sued for damages of up to £2m by British Virgin Islands company Cerino Holdings over allegations of breach of contract, breach of fiduciary duty and misrepresentation.
In December, The Lawyer revealed that the West End firm faced a claim for almost £1m arising out of its handling of the sale of shares in Lopping Display Holdings (The Lawyer, 17 December).
The new claim, against Howard Kennedy legal executive Nigel Gladstein and chartered accountancy firm Martin Tiano stems from a 1998 instruction to Gladstein by Michael Hart and Sydney Temple on the acquisition of a company and subsequent formation of Cerino. The claim alleges that Gladstein said he was a solicitor at Howard Kennedy.
Hart is acting on behalf of Cerino as a litigant in person. According to the claim, Gladstein set up an offshore bank account for Cerino and told company directors that accountants would be instructed to prepare accounts, liaise with lenders, and have overall control and management of the account and all monies.
Cerino claims that statements showed £980,000 was missing from its account and in November 2000 it discovered that there was a deficit of funds. It further alleges that Gladstein mismanaged the fund, diverted money without authority and misled Cerino over available funds.
Cerino argues that the impression conveyed by the alleged mismanagement is that Hart plundered the funds. Hart said that he was pursuing the claim to regain credibility. He added: “Certain people think we've stolen the money.”
The claimant is unable to repay missing funds and seeks reparation for its losses from Howard Kennedy, Gladstein and Martin Tiano. It alleges that Howard Kennedy allowed Gladstein to act as a solicitor and was negligent in its supervision of his activities. Cerino is seeking more than £1m, plus expenses, interest and costs from the firm and Gladstein. It is also suing the accountancy firm for damages.
Howard Kennedy has instructed Reynolds Porter Chamberlain partner Caroline Byram to handle its defence. A spokesperson for Reynolds Porter said: “The claim is being strenuously defended. As this is ongoing litigation, that is the only comment we can make.”
Gladstein has not responded to the claim and the Reynolds Porter spokesperson emphasised that the firm was not acting for him. Gladstein is no longer employed by Howard Kennedy.
Mills & Reeve partner Geoff Barrett is acting for Martin Tiano. A spokesperson said: “As far as we're concerned, the allegations have no basis whatsoever.”