Midland Bank sues Norton Rose for u7.5m

CITY firm Norton Rose faces a u7.5 million High Court claim after the failure of a scheme for industrial development in enterprise zones.

It is being sued by the Midland Bank who are trustees for around 2,700 investors in the scheme.

A writ issued on behalf of the bank by Pinsent & Co accuses the firm of acting negligently and in breach of its retainer in the matter and in failing to exercise reasonable care and skill in carrying out their obligations.

The writ claims the firm failed to ensure that guarantees it drafted, accepted by Midland on its advice, were fully effective.

The writ says the failure of the scheme and the ineffective guarantees are likely to lead to losses estimated at more than u7.5 million and is seeking damages and interest.

A Norton Rose spokesman confirms receipt of the writ but adds: “The allegation against us is that certain bank guarantees omitted to cover a particular set of circumstances, which in the end did not arise.

“We do not believe that the criticism of the drafting of the guarantee is justified or that we have any liability in the matter. The matter is being handled by our insurers.”