Blake Morgan and Deutsche turn to ADR to resolve bank's £8.4m negligence claim against firm

Blake Morgan and Deutsche Bank are attempting to resolve an £8.4m professional negligence claim via alternative dispute resolution (ADR), after the bank took legal action against the law firm last year over a disputed property deed.

Deutsche alleges that Blake Morgan was negligent when advising on a deed of surrender intended to release the bank from its obligations towards a data centre in Middlesex.

The bank claims that the law firm acted negligently by failing to advise that surrendering the lease to the centre required the consent of the Co-operative Bank, which had not been granted, and that as a result, “Deutsche Bank was not released from its liability to pay rent” on the property.

Deutsche alleges that the firm did not exercise “care, skill and diligence”. The bank is claiming damages for any sums that it would have recovered under the lease, as well as costs incurred in dealing with the ineffective surrender.

Deutsche estimates that it would have been entitled to recover £6.1m, and that it has incurred costs of £2.3m and $60,000.

The bank is being advised by Freshfield Bruckhaus Deringer disputes partner Christopher Robinson, who has instructed Sonia Tolaney QC and Adam Rushworth of One Essex Court. Blake Morgan has turned to Clyde & Co, with 4 New Square’s Scott Allen instructed as counsel.

According to the particulars of claim filed by Freshfields last year, Blake Morgan has “admitted liability in correspondence but has ‘reserved its position’ on causation, loss and mitigation”.

The case was stayed for a period of 14 days earlier this year, during which time Deutsche and Blake Morgan began attempts to resolve the dispute through mediation, which are ongoing.

According to one senior City litigator, ADR is becoming increasingly common in complex commercial cases, with courts taking a stronger line on pushing parties to pursue a solution via mediation.

“It is in the interest of the court because it frees up court and judge time, and it is in the interest of the parties involved because it is often better to negotiate a settlement that resolves the dispute, rather than having an outcome that is favourable to one side and damaging to the other,” he said. “It also saves on legal costs for both the claimant and defendant.”

In a statement, Blake Morgan said: “The firm naturally regrets the difficulties this has caused to one of our longstanding and valued clients.

“We have no doubt that the case will be resolved to the satisfaction of all parties. In the meantime, no further comment will be made given that the parties are subject to legal proceedings and it would, therefore, be inappropriate to discuss in any media forum.”

Blake Morgan, which ranked 50th in Legal Week‘s 2016-17 UK top 50, is also currently embroiled in a high-profile dispute over south London football club Dulwich Hamlet’s Champion Hill stadium.

The club claims it is being forced out of the stadium by its owners, Meadow Partners. A letter from Blake Morgan on behalf of Greendales IP, a subsidiary of Meadow, stating that the ‘Dulwich Hamlet Football Club’ name has been trademarked, has gone viral on social media, attracting the attention of celebrities such as Gary Lineker and Danny Baker.

In a statement, Blake Morgan said: “We were asked to provide advice on trade mark law as part of our client’s complex discussions about land at Champion Hill. We’re aware commercial conversations between Meadow Partners and Dulwich Hamlet FC are ongoing, but are not party to these and cannot comment further.”