Insurance litigation partner David Turner led the Bond Pearce team, which won the work through its position on the panel at St Paul Travelers, the professional indemnity insurer for Stewarts.
In 1999 Stewarts partner Andrew Dinsmore brought in Phelps to provide specialist advice on setting up a trust for a client who had won a substantial amount in a personal injury (PI) claim. Phelps was a sole practitioner at the time.
The client put around £1m into the trust, but ended up paying £181,000 in tax. At mediation, Phelps later paid out £200,000 to the client in compensation for the loss. She launched the claim against Stewarts for a contribution towards that settlement.
Bernard Livesey QC of 4 New Square presided over the case. In his judgment he said: “I do not merely prefer the evidence of Mr Dinsmore when it conflicts with that of Ms Phelps, but I do not accept on credibility grounds that Ms Phelps was telling me the truth.”
Paul Paxton, partner and head of Stewarts’ PI group, said: “The outcome has run smoothly, but I think for those involved it was strange to be in that position.”
Mills & Reeve acted for Phelps, instructing David Halpern QC at 4 New Square. Bond Pearce instructed Patrick Lawrence QC, also at 4 New Square.