News of the launch comes as Eversheds faces a claim from the Bank of Ireland relating to advice said to be negligent that it gave on a property deal — the latest example of the growing trend for claims arising from fraudulent property transactions. Britannia’s loss recovery unit, which will go live in April, will investigate law firms and surveyors working on transactions where its lending arm, Platform, suffers substantial losses following the repossession and sale of a property or portfolio of properties.
The unit, headed by Britannia’s risk and compliance director, Alexia Antoniou, will initially house 17 staff, including analysts and lawyers. It is being set up by consultant Nick Eyre, who carried out a similar process for Bristol & West during the last economic downturn in the 1990s.
Antoniou told Legal Week: “Given the current state of the market and the potential fall-out from the credit crisis, Britannia has decided to set up a loss recovery unit to investigate surveyors and law firms and, where appropriate, seek redress for fraudulent and negligent activities on property transactions we have lent on, in order to protect our members.”
The move puts Britannia ahead of the game, with other lenders expected to follow suit in light of the number of potentially fraudulent transactions being uncovered in the market downturn.
The claim against Eversheds — its second in a year — alleges it gave poor advice to the Bank of Ireland on two property transactions claimed by the bank to be fraudulent. The £2.5m claim, filed in the High Court against Eversheds and property surveyors Dunlop Haywards last month (6 February), relates to the over-valuation of two properties.
Eversheds has turned to Ince & Co to defend the claim while the Bank of Ireland is being advised by London-based Hextalls. Last year the firm faced a multimillion-pound claim by Nationwide Building Society relating to an alleged fraud by Dunlop Haywards.