Main & Orsv (Giambrone & Law (a firm) & Ors [2017] EWCA Civ 1193 (31 July 2017)

Main & Orsv (Giambrone & Law (a firm) & Ors [2017] EWCA Civ 1193 (31 July 2017)

Giambrone breached its duty as custodian of client deposits by releasing funds without obtaining compliant guarantees, constituting a breach of trust. The loss of deposits was a direct consequence of this breach and within the scope of Giambrone's duty. Payment of commission to VFI without disclosure was also a breach of trust. The claimants are entitled to equitable compensation equal to the lost deposits. The SAAMCO principle does not exclude liability as the losses were within the scope of the solicitors' duty. Giambrone also breached its duty regarding due diligence on planning permission and risk disclosure.

Citation
[2017] EWCA Civ 1193
Parties
Claimants/respondents: Main & Ors; Defendants/appellants: Giambrone & Law (a firm); Defendant/appellant: Alessandra Bellanca; Defendant/appellant: Anna Cinzia D'Arpa; Defendant/appellant: Gabriele Giambrone
Jurisdiction
England and Wales
Judgment Date
31 July 2017
Procedural Posture
Appeal / Judgment on Appeal From High Court, Queen's Bench Division
Outcome
Appeal dismissed
Legal Topics
Solicitors' Duties, Breach of Trust, Equitable Compensation, Scope of Duty (saamco), Solicitors' Accounts Rules, Planning Permission, Organised Crime Risk Disclosure
Professional Negligence Trusts and Equity Contract Law Solicitors' Duties Breach of Trust Equitable Compensation Scope of Duty (saamco) Solicitors' Accounts Rules +2 more

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Parties

Main & Ors

Claimants/respondents

Giambrone & Law (a firm)

Defendants/appellants

Alessandra Bellanca

Defendant/appellant

Anna Cinzia D'Arpa

Defendant/appellant

Gabriele Giambrone

Defendant/appellant

Procedural Posture

Appeal / Judgment on Appeal From High Court, Queen's Bench Division

Legal Issues

  1. 1 Whether claimants are entitled to equitable compensation for lost deposits due to breach of trust by solicitors
  2. 2 Whether losses suffered are within the scope of the solicitors' duties (SAAMCO)
  3. 3 Whether payment of commission to promoters without disclosure was a breach of trust

Ratio Decidendi

Giambrone breached its duty as custodian of client deposits by releasing funds without obtaining compliant guarantees, constituting a breach of trust. The loss of deposits was a direct consequence of this breach and within the scope of Giambrone's duty. Payment of commission to VFI without disclosure was also a breach of trust. The claimants are entitled to equitable compensation equal to the lost deposits. The SAAMCO principle does not exclude liability as the losses were within the scope of the solicitors' duty. Giambrone also breached its duty regarding due diligence on planning permission and risk disclosure.

Court Disposition

Appeal dismissed

Orders

  • Claimants entitled to equitable compensation for lost deposits
  • PM limitation claimants entitled to recover commission paid to VFI