Foreign banks sue two City practices

FOUR Canadian banks are suing Clifford Chance for damages for breach of contract, breach of fiduciary duty and negligence.

The Canadian Imperial Bank of Commerce, the National Bank of Canada, the Bank of Nova Scotia, and the Royal Bank of Canada have all issued High Court writs through Freshfields against the firm. The claims centre on opinions given by the firm in letters in 1989.

It is alleged that negligent mis-statements were made in the letters which were relied on by the banks, with the result they suffered loss and damage.

In another writ, the Arab Bank Plc is suing Simmons & Simmons. The bank is claiming damages for alleged breach of a 1989 contract when the firm was engaged to prepare a report on title on the Lingfield industrial estate in Darlington, which the bank was being asked to accept as security for a £17.1 million loan.

The writ, issued by Frere Cholmeley Bischoff, accuses Simmons & Simmons of failing to exercise the care and skill of a reasonably competent solicitor in the preparation of the report on title and failing to advise the bank of relevant information that would have affected its decision whether or not to make an advance.

Compensation is being sought for alleged breach of trust in relation to money transferred to the firm to enable the purchase to be completed.

Clifford Chance and Simmons & Simmons declined to comment.