Links to pay £5 as $55m negligence battle ends

Linklaters has staved off paying out a $55m (£37m) negligence claim - one of the largest made against a UK law firm in recent years - having instead to pay out £5 in nominal damages to telecoms company Levicom. In the judgment, handed down in the Royal Courts of Justice today (21 April), Mr Justice Andrew Smith ruled that, despite finding Linklaters' early advice to the claimant was expressed negligently, it did not bear any loss to the client and therefore awarded nominal damages of just £5.On all other issues, Smith found Linklaters had not acted negligently.

April 22, 2009 at 08:25 AM

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Linklaters has staved off paying out a $55m (£37m) negligence claim – one of the largest made against a UK law firm in recent years – having instead to pay out £5 in nominal damages to telecoms company Levicom.

In the judgment, handed down in the Royal Courts of Justice today (21 April), Mr Justice Andrew Smith ruled that, despite finding Linklaters' early advice to the claimant was expressed negligently, it did not bear any loss to the client and therefore awarded nominal damages of just £5.

On all other issues, Smith found Linklaters had not acted negligently.

In his judgment, Smith said: "I conclude that Linklaters' advice was negligent in some respects, but the negligence did not cause [the claimant] Levicom any loss. Linklaters were therefore in breach of contract, but are liable for only nominal damages of £5."

The judgment follows a five-week trial which started in January after an unsuccessful mediation at the end of last year, over claims Linklaters gave negligent advice to the Baltic telecoms company.

The case stems from advice Linklaters gave Levicom in 2000 over a dispute with telecoms company Tele2 AB. Levicom claims Linklaters' advice on the dispute led to arbitration in 2004, rather than a settlement on favourable terms.

According to the claim form, which was initially filed in October 2006 and amended last April, Levicom claimed damages for "the lost opportunity to negotiate a more advantageous settlement". It also sought an uplift of at least 10%, bringing the minimum claim value to $55m (£37m).

Levicom also demanded legal costs of £1.7m from Linklaters, which it alleges would have been avoided if an earlier settlement had been reached.

Manches litigation partner Andrew Shaw advised Levicom, with 4 New Square's Justin Fenwick QC instructed as counsel. Linklaters was advised by Clyde & Co litigation partner Conrad Walker, with Fountain Court's Stephen Moriarty QC brought in as counsel.

Levicom commented: "There has been a finding of professional negligence against Linklaters. In particular, the judge has found that two letters of advice written by Linklaters in January and March 2001 were negligent and caused Levicom to understand that Linklaters' assessment of their prospects of establishing damages was considerably more optimistic than it should have been. The judge considered that this advice did not cause significant loss to Levicom and has therefore awarded nominal damages. Levicom are presently considering an appeal."

There will be a costs and appeal hearing on 6 May.

Linklaters declined to comment.