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NMEC alleges bad advice over roofing contract; City firm denies negligence
Norton Rose is being sued for more than £1m by the New Millennium Experience Company (NMEC) on the grounds that it gave bad advice, forcing the Dome operator to pay compensation to a contractor. NMEC has instructed longstanding adviser Berwin Leighton Paisner. Litigation partner Edward Hood is leading the case. The case goes back to a damages claim brought by sacked roofing contractor Koch Hightex against NMEC. Koch's contract to supply a PVC roof membrane was terminated in 1997 when NMEC opted instead for the Dome's famous Teflon roof. Advised by Norton Rose partner Peter Hall, NMEC fought Koch's claim but ended up paying costs of £8,000 and a settlement of £1.3m was made last year. NMEC is now suing Norton Rose for £1,293,200 in damages, which includes Koch's legal fees of £200,000 paid to Herbert Smith, Koch's loss of profit and its own legal fees of £250,000, paid to Norton Rose during the litigation. In addition, the company is claiming damages for the lost opportunity for renegotiating with Koch. Norton Rose is accused of drafting a contract which allowed Koch to recover loss of profits or overheads from NMEC on termination and of negligent advice during Koch's court battle. Norton Rose advised NMEC from 1997 in drawing up letters of intent allowing contractors to start work on the Dome and to advise on the drafting of formal contracts. The writ says that it was essential that contracts could be terminated "without cause", and that any compensation payable to contractors on the termination of letters of intent or contracts should be limited to the cost of work done. But NMEC claims that the Koch contract failed to meet this requirement. At a meeting on 23 December, the NMEC's David Trench followed Norton Rose's advice by telling Koch that NMEC was not liable to pay anything at all for lost profit. Koch's team walked out and refused to continue negotiations. Days later NMEC received different advice from Hall, saying he thought that NMEC's position was "much less favourable". Koch sued for damages, and Norton Rose continued to advise NMEC on the matter. But NMEC now claims that the interests of Norton Rose conflicted with those of NMEC. The court will hear that the firm should have declined to continue acting and advised NMEC to seek independent legal advice. The writ says that Hall was therefore negligent and in breach of his professional duty. NMEC managed to get Koch's claim for damages struck out by a High Court judge, but the case was reinstated by the Court of Appeal, which said that Koch was entitled to summary judgment. Geoffrey Vos QC decided the case for Koch. NMEC's relationship with Norton Rose is understood to have substantially ended in September this year. A spokesperson for Norton Rose said: "Norton Rose and its insurers are defending vigorously the proceedings that have been commenced by NMEC. A defence has been served already."