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Lewis Silkin partner found to have ‘reconstructed’ his memory in negligence claim

Seven-figure damages sum awarded to former client after firm failed to advise on exclusive jurisdiction clause in employment contract

6 July 2015

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Top 100 law firm Lewis Silkin has been found to be negligent in the High Court after failing to give advice to a former client on the appropriateness of jurisdiction clause in an employment contract.

The claimant, Tim Wright, joined Deccan Chronicle Holdings Limited - an Indian newspaper group - in May 2008 as the chief executive officer of its Indian Premier League (IPL) cricket franchise, the Deccan Chargers.

The appointment was part of the company's long-term plan to build a world-class sporting city in India using the IPL franchise as a spring board. Wright, a veteran of the advertising sector, had previously worked with the late Ayrton Senna and former Formula One champion Michael Schumacher, as well as Chelsea Football Club, Nike, and Sky Sports before agreeing to join Deccan.

He had instructed Lewis Silkin's joint head of employment, Michael Burd, to advise him and prepare the necessary paperwork. However, after just one year, Wright was constructively dismissed following the financial crash.

While the contract contained a £10m severance guarantee it had no jurisdiction clause. It took Wright more than two years for the jurisdiction battle to finally be determined in his favour.

However, despite obtaining a High Court judgment in 2012 for £10,533,478 plus costs, Wright's attempts to enforce it against his former employer were stifled by delays in the Indian legal system.

To complicate matters further, Deccan had been stripped of its IPL franchise and was under investigation by the Indian authorities.

Wright alleged that had his contract contained an exclusive jurisdiction clause in favour of England and Wales, he would have obtained a judgment earlier and had a real chance of forcing Deccan to pay the court award.

Burd claimed the absence of a jurisdiction clause was a deliberate omission after he had advised Wright on the 'pros and cons' of specifying a particular jurisdiction. Wright claimed, however, that no such advice was given.

In his judgment, Mr Justice Hamblen agreed with the claimant and, in what will be seen as a damaging statement to Burd's reputation, as well as that of Lewis Silkin, found that the employment expert had given no such advice and had 'reconstructed' his memory on a number of occasions since the matter was brought to his attention in 2009.

The judge awarded £2m in damages to Wright finding that, but for Burd's negligence, the claimant had a real and substantive chance of enforcing the judgment he obtained in 2012.

Simon Walton of Rosenblatt Solicitors, who represented Wright, said the case had been of utmost importance, having faced a six-year battle to finally obtain what he should have obtained, had his contract been drafted correctly.

'It seemed obvious to me from the outset that there was no good reason for Mr Burd to have failed to include a clause dealing with jurisdiction and indeed Mr Justice Hamblen agreed,' he said.

Walton continued: 'Mr Burd tried to justify the failings in his drafting by the fact that my client put him under what he described as “severe time pressure.”

I think the judgment emphasises that is never an excuse for sub-standard drafting that fails to protect your client’s position – which was the case here. If, as a solicitor, you are asked to work to a deadline which means compromising on your advice, you simply must rebalance the client’s expectations or, which was not the case here, make attendance notes recording appropriate caveats given to your client.

'Mr Wright entered into a multi-million pound contract with an Indian company and was given no advice as to the difficulties he might face enforcing his contractual rights if, as happened, relations turned sour. I think this case is a good reminder to all solicitors about just how global the world of business is and the considerations in legal drafting that come into play as a result.'

Lewis Silkin, which was recently ranked the 54th best company to work for by the Sunday Times, told SJ: 'We are naturally very disappointed with the judgment. The claim relates to advice given more than six years ago in 2008, and in relation to which Mr Burd was found by the judge to be a truthful witness. The claim has been vigorously defended and the amount awarded is substantially less than the amount sought by the claimant, who lost on his primary claim relating to security.

'We are carefully considering our position in relation to the judgment and in particular the possibility of an appeal.'

 

John van der Luit-Drummond is deputy editor for Solicitors Journal
john.vanderluit@solicitorsjournal.co.uk | @JvdLD

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