Camerons defeats professional negligence claim from Edenwest

The High Court has thrown out a professional negligence claim against CMS Cameron McKenna, ruling that the challenge by perfume distributor Edenwest had no real prospect of success.

Nicholas Davidson QC
Nicholas Davidson QC

Ward Hadaway instructed 4 New Square’s Nicholas Davidson QC to lead the claim against Camerons, while Simmons & Simmons partner James Pollock instructed Crown Office Chambers’ Michael Harvey QC for the firm.

Mr Justice Hildyard heard how Camerons had been retained by Edenwest’s bank, Habib, in 2004 after it was forced to consider putting it into administration following a fire that insurers refused to indemnify.

Edenwest was advised its lawyers at Shoosmiths that any claim against its insurers and brokers would stand little chance of success, leaving it little option but to sell up.

KPMG, another Camerons client, was retained as a potential receiver in August 2004. Camerons advised the bank that any claim against the insurers would be arguable, but stood little chance of success.

The claims were credited as having little value by Edenwest, but when the company was later sold to Imperial Pharmaceuticals the claims were valued at £100,000.

In June 2007, Imperial Pharmaceuticals launched a claim against the brokers for £13.4m. The case was settled on confidential terms  but, according to the judgment, for “materially in excess” of the £100,000 value assigned to it.

In June 2010, six years after the fire, the claim was launched against Camerons. Edenwest contended that advice given as to the prospect of recovery in respect of the claims against the broker was “excessively pessimistic”.

The firm contended that as it had been instructed by KPMG it was under no obligation to the claimant. It had not been formally retained by the claimant and therefore, it argued, the case should be thrown out.

The High Court agreed. Hildyard J stated: “The claimant cannot establish a duty of care either in contract or in tort and the defendant is entitled to summary judgment.”

The legal line up:

For the claimant Edenwest: 4 New Square’s Nicholas Davidson QC instructed to lead 4 New Square’s Sian Mirchandani by Ward Hadaway

For the defendant CMS Cameron McKenna: Crown Office Chambers’ Michael Harvey QC to lead South Square’s Lloyd Tamlyn (instructed by Simmons & Simmons partner James Pollock and senior associate Jeremy Roberts.