Nabarro has been hit with a £130m professional negligence claim by a former client disgruntled over the way it conducted a High Court battle.
The dispute was sparked in 2006 when Nabarro defended a company against allegations of wrongful diversion of a business opportunity and centres on the shares and IP rights of now defunct software company MCashback.
Nabarro defended its former client, MCashback and its directors, in a series of cases against it by their former colleague Paul Burtenshaw and Fanmailuk.com.
MCashback was launched in 2002 by three former Dialtime directors, a company that had developed a system for free mobile phone airtime at supermarket checkouts. The fourth Dialtime director, Burtenshaw, was not included in the deal and issued a number of cases against it.
It went into liquidation in 2010 and has now called in Carter-Ruck partner Nigel Tait to launch a case against Nabarro.
The trial has been set down for up to six weeks in November next year and will pitch claimant counsel Maitland’s Christopher Parker QC against Brick Court’s Tom Adam QC.
Adam has been instructed by Clyde & Co partner Sarah Clover for the firm.
As well as being one of the highest value professional negligence claims to be bought against a firm in recent years the case will also test a historic House of Lords decision in Stone & Rolls v Moore Stephens (31 July 2009). That case set down the duties owed by solicitors when they are provided with false instructions by their clients.
A Nabarro spokesperson said: “Nabarro will vigorously contest the claim being bought against the firm by the liquidators of a former client called MCashback Ltd.”
The suit is worth just £10m less than the mammoth £140m professional negligence claim bought against Freshfields Bruckhaus Deringer and Herbert Smith Freehills (HSF) in 2011 by London Underground (28 November 2012) – thought to be the largest ever filed against a City firm. The case settled in September just weeks before the court showdown (19 September 2013).
For the claimant MCashback
Maitland’s Christopher Parker QC leading James Balance instructed Carter-Ruck partner Nigel Tait
For the defendant Nabarro Nathanson
Brick Court Chambers’ Tom Adam QC leading Tony Singla instructed by Clyde & Co partner Sarah Clover