NGJ escapes being stung in Wasps negligence case

Nicholson Graham & Jones (NGJ) has been cleared of any negligence in a case in which the firm bizarrely found itself as both the claimant’s solicitors and a Part 20 defendant.

NGJ was instructed by the trustees of rugby union club Wasps Football Club in 2002 to bring a claim against surveyors Lambert Smith Hampton (LSH) over a 1995 deal on which both NGJ and LSH advised.

The dispute related to a deal struck by Wasps’ trustees to share Queen’s Park Rangers’ Loftus Road stadium.

Wasps transferred its existing ground, valued by LSH at £832,500, in exchange for nearly five million shares in Loftus Road plc. But in fact the judge found that the valuation should have been around £3m.

The Wasps trustees sued LSH, claiming that had they been advised properly, they would have “reaped the reward” enjoyed by Loftus Road plc in 1999 when it sold the ground. When the claim proceeded to the case management conference in February 2003, more than 10 months after the defendants became aware of the proceedings, LSH brought NGJ in as a Part 20 defendant.

“We considered it an attempt to destabilise our relationship with our clients,” said Anne McCarthy, the NGJ litigation partner who advised Wasps’ trustees.

Consequently, the firm constructed a Chinese wall so that it could continue to advise Wasps. “Our insurers were fully supportive and the Part 20 claim was defended by another partner in the litigation department, Jane Harte-Lovelace, along with separate counsel,” McCarthy said.

Mr Justice Langley found that the Part 20 claim failed; however, LSH was liable for £2.4m in damages.

“Our position was fully vindicated at trial,” said McCarthy. “When we saw the judgment of 100 pages, only one was needed to dismiss the Part 20 claim, all elements of which were rejected, as were all allegations of contributory negligence against Wasps.”

A spokeswoman for LSH said: “The judgment delivered by Mr Justice Langley on 6 May is long and complex; Lambert Smith Hampton is currently reviewing its contents and will decide its next steps having completed that review and consulted with its professional advisers”.