Legal Business Blogs

Nabarro settles professional negligence claim for £10m

Nabarro has agreed to pay £10m to settle a £130m professional negligence claim brought against the firm by a former client unhappy with its handling of a litigation matter.

While Nabarro declined to comment on the terms of the settlement, the firm told Legal Business in a statement: ‘We contested these accusations vigorously. The settlement by our insurers is not an admission of liability and represents a small percentage of the alleged value of the original claim.’

The dispute dates back to 2006, when Nabarro defended the now defunct software company MCashback and its directors against allegations of ‘wrongful diversion of a business opportunity’ by former colleague Paul Burtenshaw and

Burtenshaw, a director at a company called Dialtime, which created a system of free mobile airtime credits available at supermarket checkouts, brought a claim against three of his fellow directors who set up MCashback without him.

MCashback entered into liquidation in 2010. Peter Kubik of UHY Hacker Young was appointed as liquidator and instructed Carter Ruck partner Nigel Tait and in 2012 brought a claim against Nabarro in the Chancery Division of the High Court, in what was expected to be one of the highest-value negligence claims against a law firm in recent years. The trial was scheduled to begin on 3 November.

The claimant was represented by Maitland Chambers’ Christopher Parker QC leading James Balance, who were instructed by Tait and fellow Carter-Ruck partner Claire Gill. Nabarro was represented by Clyde & Co’s head of professional disputes Sarah Clover, who instructed Brick Court Chambers’ Tom Adam QC, leading Tony Singla.

Other recent high-profile claims against law firms include an order by the High Court against Withers for £1.6m in damages, after the court upheld a professional negligence claim alleging the misdrafting of a limited liability partnership agreement.