City firm Hextall, Erskine & Co is considering whether to appeal against an order that it pay £3.5 million in damages for negligent advice it gave to Silverstone Circuits, the company which owns the famous Silverstone motor racing track.
The case revolved around the purchase by Silverstone of a half share in car retail business TWR in 1992 for £5.3 million.
Anthony Barling, a former solicitor at Hextall, failed to warn the Silverstone board that the deal needed the approval of the members of Silverstone's ultimate owners, the British Racing Drivers' Club, the High Court heard last week.
The club's members are made up of present and former motor racing drivers. Their approval was needed because the Silverstone Circuits chair, Tom Walkinshaw, was also chair of TWR.
But the club's members failed to give the transaction the go-ahead.
Eventually, the TWR shares were sold back to Walkinshaw in December 1993 for £3 million less than was paid for them.
In his judgment, Mr Justice Carnwath said that the firm conceded it was negligent in failing to advise on the need for members' approval, but that the loss on the shares was caused by the “flawed commercial judgement” of the directors.
Hextall has professional indemnity cover which would come into play if it pays the award. But senior partner Neil Thomas said: “We are taking legal advice on the possibility of appealing.”
Nabarro Nathanson partner Michael Hales acted for the British Racing Drivers Club.