RJW loses £300K in Crédit Lyonnais fight

CrEdit Lyonnais has won a damages claim totalling £300,000 against Russell Jones & Walker

The firm employed a consultant lawyer who specialised in commercial law, while the case he was handling related to property law.
As a result, the judge, having praised the abilities of the consultant as a commercial practitioner, said: “The fault which led to Crédit Lyonnais’s problems can be traced back to Russell Jones’s decision to assign a corporate lawyer in a property case.”
Russell Jones acted for the bank in its attempt to terminate a 25-year lease on commercial premises by way of a break option in a clause within the lease. However, while the required notice was served to the bank’s landlords on time, Crédit Lyonnais failed to make a payment within time limits to facilitate the termination.
Crédit Lyonnais alleged that the Russell Jones consultant on the case David Stanton-Reid, who left the firm around eight years ago, breached duty of care by failing to warn that a payment was a condition of the termination; as a result the bank had to buy its way out of the lease.
Russell Jones’s law firm Bond Pearce claimed the bank’s instructions were sufficiently narrow to make it not a requirement for it to advise the client on the clause in the lease. Also, the narrowness of the instructions was reflected in Russell Jones’s modest fees for the work, which totalled some £500.
However, Mr Justice Laddie held that Russell Jones was instructed not only to draft the letter regarding termination, but also to advise generally on how to effect termination.
One-third of damages owed by the firm’s insurers to the bank relate to interest. Part of this arose out of a penalty imposed because a Part 36 settlement offer by Clifford Chance, Crédit Lyonnais’s lawyers, was declined by the other side.
A Russell Jones spokes-person said: “The events that were the subject of this action took place almost 10 years ago and involved a consultant from the firm. Under advice from our insurers and their lawyers, the claim was defended. We’re considering our position in light of this judgment.”