Wellesley Partners Llp v Withers Llp

Wellesley Partners Llp v Withers Llp

Withers LLP was negligent in drafting clause 25.2 of the LLP agreement without instructions from the client, resulting in Addax being able to withdraw capital earlier than intended. Withers was not negligent in the other respects alleged, including advice on currency risk and redistribution of Addax's interest. WP was not contributorily negligent as it was reasonable for Mr Channing to rely on the solicitors and not review every draft in detail. Damages are recoverable for loss of profits in the US and London, and for diversion of management time, subject to assessment of legal costs.

Parties
Claimant: Wellesley Partners LLP; Defendant: Withers LLP
Jurisdiction
England and Wales
Judgment Date
11 March 2014
Procedural Posture
Civil Professional Negligence / High Court Judgment
Outcome
Claim allowed in part; judgment for the claimant on primary negligence issue; other allegations dismissed; damages awarded.
Legal Topics
Solicitors' Duties, Contributory Negligence, Damages, Remoteness of Damage, Loss of Profits
Professional Negligence Contract Law Tort Law Solicitors' Duties Contributory Negligence Damages Remoteness of Damage Loss of Profits

Case Brief

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Parties

Wellesley Partners LLP

Claimant

Withers LLP

Defendant

Procedural Posture

Civil Professional Negligence / High Court Judgment

Legal Issues

  1. 1 Whether Withers LLP was negligent in drafting clause 25.2 of the LLP agreement without instructions from the client.
  2. 2 Whether Withers LLP was negligent in failing to advise on the currency risk and capital contribution in US dollars.
  3. 3 Whether Withers LLP was negligent in failing to provide for redistribution of Addax's interest upon exercise of the option.

Ratio Decidendi

Withers LLP was negligent in drafting clause 25.2 of the LLP agreement without instructions from the client, resulting in Addax being able to withdraw capital earlier than intended. Withers was not negligent in the other respects alleged, including advice on currency risk and redistribution of Addax's interest. WP was not contributorily negligent as it was reasonable for Mr Channing to rely on the solicitors and not review every draft in detail. Damages are recoverable for loss of profits in the US and London, and for diversion of management time, subject to assessment of legal costs.

Court Disposition

Claim allowed in part; judgment for the claimant on primary negligence issue; other allegations dismissed; damages awarded.

Orders

  • Damages awarded to Wellesley Partners LLP in the sum of £1,612,313, subject to assessment of interest and legal costs.
  • Legal costs attributable to the misdrafting of clause 25.2 to be assessed by a costs judge if not agreed.