Northern Rock Asset Management (NRAM) has filed a claim of professional negligence against the law firm Eversheds to the amount of £100m. The claim has been brought forward in relation to legal advice provided by the law firm with regards a ‘together loan’.
A spokesperson from Eversheds has been quick to deny the claim, stating ‘this claim is being vigorously defended. Eversheds is fully satisfied that it discharged its duty of care to NRAM and that the claim is without foundation’.
The ‘together loan’ aspect of the claim relates to advice given by Eversheds after two separate annual statements relating to the loan were reviewed. Despite the claim form, at this time there has been no date for a trial set, or indeed any claim particulars or case management conference. Brick Court Chambers’ was first instructed by NRAM around 2 years ago, but there has been a slow pace of movement since that time.
A ‘together loan’ is a combination of an unsecured loan at a single interest rate and a secured mortgage, with a monthly payment of the two combined being provided. Northern Rock claims that Eversheds did not provide the advice on the matter within a ‘reasonable time’ and the annual statements ‘did not comply with the requirements of the Consumer Credit Act’.
The claim states that due to the negligent advice the loan was not enforceable and as a result NRAM became the liable party in terms of repaying or refunding the interest and charges placed on borrowers.
In response to the claim from NRAM Eversheds has instructed Clyde & Co. to defend them in the case.
As with many high-profile medical negligence and professional negligence cases, the defence for this case is that Eversheds has complied with all duty and regulation regarding the issue. The review was requested by NRAM for Eversheds to look over the loan documentation in question in 2010, and to consider the Consumer Credit Act and the compliance of the loan.
Eversheds claims that a commercial lawyer working within the legal section of NRAM was advised on the matter. They provided information that stated that certain necessary information was not detailed within the relevant documentation from NRAM. Eversheds claim to have explicitly specific that the documentation did not comply with regulations relevant to the matter and that it appears that NRAM have not acted on their advice, which is being argued by their professional negligence solicitors.
It is not clear whether NRAM did not act upon the Eversheds advice for a lengthy period of time or whether the advice was not listened to at all. This vital piece of information is absent from documentation and is the central argument between Eversheds and NRAM. The consequences of the missing information is being blamed on Eversheds, with the firm staunchly defending the service it provided to NRAM in the process.
Summary: One of the largest professional negligence cases in UK history is currently happening between two major companies. Read the full article to find out more details on the legal claim.