A $3.7m claim against Mishcon de Reya for dishonestly assisting a ‘crook’ client who used money meant to refinance a hotel resort in Orlando on a playboy lifestyle, including a £170,000 Maybach car and a £33,000 diamond bracelet, has been dismissed at the High Court.
Had the case been successful, claimants were planning on suing Mishcon for ‘a sum in excess of £10m for consequential losses’ according to one lawyer involved in the case. With the majority of investment borrowed, the additional sums ‘would have been for the substantial loss of all the business and properties’ that followed.
American businessman Kwok Choon Chiang paid $3.5m and British accountant Patrick Gore an additional $224,500 to Mishcon de Reya, with a promise from the firm’s client Mick Shephard that the money would secure a loan to refinance Gore’s plans for a hotel resort in Orlando.
The claimants argued that a rogue former partner, Kevin Steele, was implicit in allowing that money to be spent on Shephard’s lifestyle and claimed Mishcon was liable for his allegedly dishonest assistance, conspiracy to commit fraud and failure to ensure the money was spent on its particular purpose.
Chaing’s investment in the development was taken by another law firm, Simmons & Simmons, and wired to Mishcon de Reya. Steele, who released the money to Shephard, was expelled as a partner at Mishcon in 2008 after being convicted at Southwark Crown Court of conspiring with him ‘to commit fraud by false representation’ against EFG Bank in a separate matter. He was sentenced to four years and four months in jail.
Chiang and Gore, which instructed Kennedys Law, argued that ‘Mishcons are vicariously liable’ after Steele and Shephard ‘conspired and combined together to defraud’ them. However, Judge Hodge QC dismissed the claims: ‘Whatever sympathy one has for Kwok Chiang and Mrs Chiang – and I do entertain considerable sympathy for them (as distinct from Mr Gore) since they are the most deserving of individuals and they have been treated shamefully – Mishcons were not to blame for their misfortunes; and these claims must therefore be dismissed.’
He added: ‘If KC requires redress, I fear he must look elsewhere (if it is not already too late to do so).’
Eric Sumner at Kennedys Law was the lead solicitor for the claimants and instructed Robert Hantusch of 3 Stone Buildings for the trial. Michael Robin, senior partner at boutique firm Robin Simon, was instructed by Mishcon while Robert Anderson QC and Robert Weekes of Blackstone Chambers carried out the advocacy work.