London firm Howard Kennedy fighting property negligence claim

On a deal negligently drafted by its former solicitors of a property developer, with a local authority which was aborted shortly after the council’s leader stepping down, Howard Kennedy is fighting a multi-million-pound High Court claim.’

Howard Kennedy is being sued over a scheme to develop multiple sites owned by Lewes District Council (LDC) in East Sussex by Karis Developments Limited and Karis Southern Housing Projects Limited, of which Brighton-based developer Joshua Arghiros is the ‘controlling mind.’ 

 The court heard included a deal for the sale of some development sites from LDC to the housing association, the claimants entered contracts with the local authority and housing association Southern Housing Group in 2015. However, the agreement was terminated following a change in the leadership of the council that December – which the claimants allege is the result of Howard Kennedy’s negligent drafting. 

 Roger Mallalieu QC at the High Court yesterday told that the claimants ‘were looking to the defendant to ensure that the agreement as drafted provided adequate protection in the event of there being a change of control at the council.’ He also added that this was because Arghiros had ‘his fingers burnt before’ after a previous deal with Brighton & Hove City Council fell through, in part because of a change of political control of the authority. 

 Mallalieu argued Arghiros was given ‘false reassurance’ by Howard Kennedy that the agreement did not ‘expose [the claimants] to the very risks that they had raised.’ He also told that ‘there was simply no need’ for the agreement with LDC to be drafted to give the local authority ‘absolute discretion’ to terminate the deal ‘unfettered as it was by any obligation to act in good faith or to seek to resolve any resolvable differences.’ 

 But Jamie Carpenter QC, for the firm, said the claimants is ‘just not sustainable ’case – which he described as being ‘I told Howard Kennedy to produce an agreement which could not be terminated following a change of political control’ and the firm did not do so. He also told the court that ‘It is not Mr Arghiros’ evidence that he gave those instructions and, secondly, the only way to implement those instructions, would be to produce an agreement containing no provisions allowing LDC to exit at any time.’ Carpenter added that the issue of a change of political control of LDC was ‘a commercial risk, not a political one.’ 

 The trail is due to conclude at the end of this month before Mr Justice Trower.