Tesco sues Lovells over Czech property deal

Lovells is facing a massive negligence claim from supermarket giant Tesco over work carried out in the Czech Republic.

Tesco launched its multi-millon pound claim in March 2005, and the case is set down for trial in the High Court early next year.

The supermarket claims that in 1997 Lovells negligently drafted contracts relating to an agreement with a Czech property developer, Jirí Malik. Malik brought claims against Tesco in respect of the contracts, and after arbitration Tesco was ordered to pay him awards totalling £3m. That figure has since risen to £10m through inflation.

Malik has recently launched further claims against Tesco in Prague, and it is understood that if it loses those cases the supermarket will hold Lovells responsible.

In a statement, Lovells said: “Lovells accepts that one of the contracts did not take into account the effect of an earlier contract between Tesco and the developer, and for this, Lovells has apologised. Nevertheless, even in this case, Lovells does not accept this led to the damage claimed. Negligence in respect of the other contract is denied as is the responsibility for the losses claimed.”
In an ironic twist, Tesco has instructed Berwin Leighton Paisner (BLP) partner Michael Goldmeier to act on the case despite having sued the firm in 2004, also over a property transaction. That case settled in November 2004 for a fraction of the £1m claimed.

A Tesco spokesman confirmed the supermarket was pursuing a claim and declined to comment further.

Lovells has instructed Barlow Lyde & Gilbert partner Richard Harrison and 3 Verulam Buildings’ Christopher Symons QC. Goldmeier is instructing Wilberforce Chambers’ Jonathan Seitler QC.