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Bird & Bird loses £1.8m professional negligence case over planning report

Bird & Bird has lost a professional negligence dispute taken by former client and offshore company Orientfield Holdings at London’s High Court and been ordered to pay out £1.8m in damages plus interest.

The dispute arose when in 2010 Orientfield instructed Bird & Bird for its purchase of a large residential property in St John’s Wood for £25 million, which was later bought by media executive Elisabeth Murdoch. However, the court found that the solicitors failed to advise Orientfield of a proposed development close to the property which would have negatively affected its intended use.

Bird & Bird had obtained a planning report for the property which revealed the existence of such developments but, unaware of this, Orientfield signed a contract to buy the property, paying a deposit of £2.5m. Upon learning of the development it terminated the contract and the vendors of the property brought a claim against Orientfield to retain the deposit, which was settled with the latter recovering half of the monies. Orientfield then brought a claim against Bird & Bird to recoup the balance of its deposit and other costs associated with the legal action brought by the vendors.

Bird & Bird argued that it was not under any duty to provide the report and therefore there had not been any negligence. However, Judge Mark Pelling QC held that the firm failed to provide Orientfield with the planning report and confirmed it was the duty of Bird & Bird to inform Orientfield of its content.

Bird & Bird said in a statement: ‘We are disappointed with the result but we’re discussing with our insurers the possibility of an appeal.’

Wedlake Bell partner David Golten advised the claimant while Bird & Bird was represented by Triton Global director Michael Robin.

Commenting on the case, Golten said: ‘We are thrilled that Orientfield has been successful and it is a well-deserved result. Clients rightly expect and should have professional advisors who act diligently to protect their interests. It has been a hard fought claim, and it is excellent that all of Orientfield’s loss has been recovered, including its legal costs.’