Watson Farley & Williams (WFW) has batted off a £10m professional negligence claim stemming from the global financial crash.
The firm turned to Clyde & Co partner Sarah Clover to defend the case, which was issued as a counterclaim by Itzhak Ostrovizky, who instructed Matthew Arnold & Badwin partner Jonathan Sachs.
The dispute, which was heard over the course of two weeks in November, had its roots in work that WFW had carried out for Ostrovizky in 2007. The firm was retained to draft three share purchase agreements relating to his investment in solar electricity projects in various Greek islands.
Ostrovizky claimed that WFW acted negligently in drafting the agreements and alleged that because of the poor drafting of the contracts he was drawn into litigation in Greece. This meant that instead of being able to make a profit from the sale of the project in 2009, Ostrovizky claims to have suffered a significant loss.
In dismissing the case, Mr Justice Silber rejected that Ostrovizky’s alleged losses were caused by negligent contract drafting and instead pointed toward the credit crunch.
The judge found that the risks of investing in solar energy in Greece at the time were such that a discount should be applied to any damages awarded to reflect the chance that the projects would never have been sold, and that in fact the projects Ostrovizky had invested in had progressed well, given the economic situation.
The High Court ordered Ostrovizky to hand over indemnity costs to the firm due to his approach to disclosure and his unreliable evidence. Disclosure breaches, including failures to identify clearly what searches have not been undertaken will, in appropriate circumstances, justify an award of indemnity costs.
For the counter claimant Ostrovizky
Matthew Arnold & Baldwin partner Jonathan Sachs instructed Hailsham Chambers’ Michael Pooles QC to lead Selborne Chambers’ Gary Blaker
For the defendant Watson Farley & Williams
Clyde & Co partner Sarah Clover instructed 4 New Square’s Ben Hubble QC and Pippa Manby