Mishcons faces £6m action from client

A businessman is suing Mishcon de Reya for nearly £6m because of alleged negligence in the drafting of a contract between his company and a potential investor.

Robin Pesskin hired Mishcons to negotiate investment by Innisfree in a holding company that comprised several companies under his direction. Pesskin specialises in introducing shopping malls to hospitals.
He alleges that, with disastrous consequences for him, Mishcons failed to notice an article in the agreement in which Innisfree could, without justification, remove him as a director of the holding company, HealthGate Holdings.
Mishcons also allegedly failed to ensure the execution of a voting agreement between Pesskin, who negotiated a 20 per cent equity stake in HealthGate and two other equity owners.
In 1998, Pesskin was removed as director of HealthGate and its subsidiaries. Pesskin claims that if Mishcons had fulfilled its duties by telling him of the article, he would have required its removal. He claims he also would have had a good chance of persuading Innisfree not to insist on the article. However, if Innisfree did insist then he could simply have sought financial advice elsewhere.
Pesskin is claiming £4.17m based on the loss of the chance of obtaining 39 per cent of the company if he had retained his position as director. He has also lost the chance of being able to sell his shares in the company, which, if it floats next year, he estimates to be worth £11m.
Pesskin is also claiming £1.556m from profits that he estimates he would have earned from his projects for supplying cook-chill food to the NHS and a clinical waste disposal incinerator.
He is also seeking an unspecified amount for the loss of a managing director's salary, which would have started at £72,000 and increased to £100,000 by August 2002.
A Mishcons spokesman said: “Mishcon de Reya is vigorously defending the claim by Robin Pesskin. We don't believe it is appropriate to discuss the dispute in any further detail at this stage.”
Pesskin's lawyer Russell Sender, a partner at London firm Marshall Ross & Prevezer, said: “Needless to say, my client was hard done by, and we'll be aggressively pursuing his claim for damages.”