Not a lovely day.
Withers may have to pay out hundreds of thousands of pounds in compensation after its real estate team failed to detect a pair of high voltage cables running through a planned luxury development, and then botched advice on whether they could be moved.
The firm was instructed by Spire Property Development LLP and Hortensia Property Development LLP ("Spire") on the £42 million purchase of two properties on Fulham Road, which Prime intended to develop into three houses and a block of luxury flats.
Two years after the deal completed in 2012, Withers received a stomach-dropping call when Spire got in touch to complain that three high voltage cables belonging to UK Power Networks had been discovered running through the land, upending its development plans.
A Withers associate confidently replied that the firm "clearly flagged up in advance of exchange the existence of two sub-stations and ancillary cables in the vicinity of the property", which Judge Pelling QC said was accurate but "immaterial", because those items had nothing to do with the high voltage cables.
When the client asked if it could compel UKPN to either move the cables or pay compensation, the associate "failed to give any advice" on potential remedies, and Spire ended up reducing the size of two of the flats and building two mansions instead of three in order to avoid the subterranean hazards. Then it sued Withers, for not carrying out the search in the first place, and then for giving duff advice when the cables were brought to its attention.
The partner in charge of the matter, Emma Copestake, told the court that she never asked Spire if they should carry out a search for electricity cables because the developers were "sophisticated, experienced property professionals" and it would have been "disrespectful".
The judge said the position adopted by Copestake, who left Withers in 2020, was "untenable", and that the firm had breached its duty to either carry out the search "or at least to inform the claimants that one would not be carried out" unless requested.
In a nightmare scenario, the associate, now a special counsel at Withers, was cross-examined about her years-old advice, and admitted, "I have a vague recollection of looking on the PLC note".
"She did not at any stage read the Act that she was purporting to give advice about", thundered the judge, ruling that using sources that "were not even recognised textbooks but commercially available practice notes" was "plainly negligent" and resulted in advice which "actually misled" the client.
"Whilst it might have been appropriate to start her legal research by consulting the PLC website, it was not appropriate to stop there", he said.
Judge Pelling QC also rejected Withers' valiant argument that because the firm never charged for the associate's flawed cable advice, it was not liable for it.
Significant parts of Spire's claims were rejected, but Withers was found liable for the £1.4 million drop in the value of the properties resulting from changes made to the layout to dodge the cables, which included the loss of such luxury essentials as a dressing room and an en suite bath. It represents the first time an oligarch will have to wash standing up because of a PLC note.
Withers told RollOnFriday, "We regret that these matters reached trial despite our efforts to resolve them to everyone's satisfaction, but we are nevertheless pleased that the great majority of the claims failed. Given that there is a possibility of appeals it would not be appropriate for us to make any further comment at this stage".