Pinsents faces £10m negligence claim from former client
Pinsent Masons has been hit with a negligence claim of more than £10m from a former client. Construction contractor Shepherd Construction has launched a claim in the High Court alleging that negligent drafting of contracts by Pinsents left the company liable to repay subcontractors when one of its clients went into administration.
August 01, 2011 at 10:18 AM
3 minute read
Pinsent Masons has been hit with a negligence claim of more than £10m from a former client.
Construction contractor Shepherd Construction has launched a claim in the High Court alleging that negligent drafting of contracts by Pinsents left the company liable to repay subcontractors when one of its clients went into administration.
The claim relates to the collapse of a joint venture to build the Trinity Walk shopping centre in Wakefield. Trinity Walk Wakefield, a joint venture between Modus and CIREF, went into administration in 2009 with York-based Shepherd responsible for the construction.
When the joint venture collapsed Shepherd attempted to withhold payment from subcontractors including steel contractor William Hare; however, a judgment in 2009 ruled that it could not withhold payment as the contract did not allow it.
According to a report in Building, Shepherd alleges that a 'pay-when-paid' clause – that was originally drafted by Pinsents in 1998 and had been used repeatedly since – failed to take into account changes brought in by the 2002 Enterprise Act.
Pinsents, which has enlisted West End firm Beale and Company and 4 New Square's David Sears QC to defend it, is fighting the claim on the grounds that the clause was accurate when drafted.
Beale senior partner Antony Smith said: "Pinsent Masons denies all liability as the contract was accurate when drafted."
Andrew Paton, a professional indemnity partner at Pinsent Masons, commented: "We are disappointed that proceedings have been commenced against us by Shepherd Construction. We shall be vigorously defending these allegations in the Technology and Construction Court and have applied to strike-out the claim."
A hearing due to take place tomorrow (2 August) is set to see Pinsents attempt to strike out the claim completely.
Shepherd Construction could not be reached for comment.
News of the claim comes after it emerged last week that Freshfields Bruckhaus Deringer is facing a £141.96m negligence claim relating to advice it gave London Underground Ltd (LUL) in 2002.
The claim was issued by LUL in the High Court in January this year and relates to advice the magic circle firm gave the company on its 2003 public-private partnership with collapsed transport company Metronet.
LUL is arguing that Freshfields' advice on contracts drawn up in 2002 meant that following Metronet's administration in 2007 it had to pay out more in associated 'breakage' costs than it should have. A court hearing is not expected until 2012 at the earliest.
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