JMW obtain judgment for more than £1 million to be repaid to vulnerable client
Background
JMW’s commercial litigation team, headed by Sobashni De Silva (Partner), Kulwant Sokhal (Senior Associate) and Taravat Ghasempouri (Solicitor), successfully acted for a vulnerable individual, who was unable to read and write but had paid the sum of £1,050,000 to a high-profile sports lawyer and his firm, for an investment agreement, on the basis that the sum of £1,050,000 would remain in escrow in the solicitors bank account for 12 months. When the vulnerable client requested the return of his escrow monies, the high-profile sports lawyer refused to return the same or confirm that the funds continued to remain in escrow.
Steps taken by JMW
The team at JMW entered into correspondence with the Defendants, requesting the immediate return of the escrow monies and confirmation that the escrow monies of £1,050,000 remained in the firm’s bank account. The Defendants refused to return the escrow monies or confirm that they remained in escrow. Under the threat of Court proceedings, the Defendants confirmed that the escrow monies had been paid out to a third party on the authority of that third party. Following issue of the Court proceedings, the Defendants applied to stay the Claim stating that the parties were required to resolve any disputes by way of Arbitration in the first instance and not Court proceedings. JMW for the client applied for a proprietary injunction, seeking repayment and information as to the whereabouts of the escrow monies. Both applications were heard together. The Court rejected the Defendants' position that it could rely on an arbitration clause within the investment agreement, which the Defendants were not a party to, and granted the client the proprietary injunction. As part of the proprietary injunction, the Defendants were ordered to set out in an Affidavit under oath what had become of the escrow monies. This revealed that the escrow monies had been paid to a third-party almost immediately after being transferred to the Defendant solicitor firm.
Court directions were provided for trial, with the parties ordered to provide extended disclosure. The Defendants failed to provide extended disclosure and of the 30 documents listed within its disclosure, 28 were Court documents. JMW made an application for specific disclosure of a class of documents, also seeking an unless order. This application was successfully granted, with the Judge ordering that unless the documents were disclosed by the Defendants, their Defence would be struck out, and the client could apply for Judgment to be entered. The Defendants provided further disclosure of some documents; incomplete or no disclosure in relation to other classes of documents, and other documents were heavily redacted on the basis of privilege.
Outcome
JMW for the client applied for judgment to be entered, asserting that the Defendants were in breach of the Unless Order and had failed to comply with their extended disclosure obligations. Just before the Court hearing, the SRA intervened in Defendants' solicitors' practice on the basis of suspected dishonesty. At the hearing, JMW successfully argued that the Defendants were in breach of the Unless order for specific disclosure and obtained an order that judgment be entered against the Defendants, ordering the Defendant Solicitor firm and also the Defendant Solicitor personally for repayment of the escrow monies of £1,050,000 plus interest and indemnity costs.