The perils of professional negligence

Professional negligence is a worry for all firms. The thought of being a defendant in the Supreme Court would fill most lawyers with dread.

This is probably the case for Cheltenham-based BPE Solicitors, which is facing a visit to the top court after former client Richard Gabriel was granted the right to appeal a 2013 Court of Appeal loss.

The case has brought into sharp relief the issue of what advice solicitors are required to give. Gabriel alleges that the firm was in breach of fiduciary duty when it failed to warn him that his business associate was planning on using a £200,000 to pay off personal loans as opposed to developing a property.

BPE, known for embracing a four-day week back in 2009, was ordered to pay a £191,808.44 damages bill by the High Court, a decision that was overruled at the CoA. Now the case has raised its head again.

It is certainly not the first or last firm to find itself at the pointy end of disputes following sour investments. A case involving Nabarro is due to take place in November, brought against it by a disgruntled former client while Watson Farley & Williams also joined the party earlier this year, batting off a £10m claim stemming from the global financial crash.

Elsewhere both Clifford Chance and Freshfields Bruckhaus Deringer were dragged into negligence claims following advice given to high-profile clients London Underground and JPMorgan.

Both of these managed to settle the issues, with Clifford Chance’s JPMorgan battle coming to a close last month, avoiding an open court finale.

BPE may not be for fortunate.

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