A law firm was negligent and in breach of trust in the advice it gave hundreds of UK buyers of off-plan holiday apartments, for failing to warn of suspected Mafia involvement. The mafia connection was discovered by the police and all the properties seized.
The Court of Appeal held the firm, Giambrone, liable for more than £5m deposits lost in the venture, in Main & Ors v Giambrone & Ors [2017] EWCA Civ 1193.
The apartments were based in two developments in Southern Italy, Jewel of the Sera and El Caribe, both of which have now been abandoned. Jewel of the Sea was seized by the Italian financial police in relation to allegations of a £400m money-laundering operation organised by the Italian Mafia and the IRA.
More than 100 claimants sought recovery of monies lost, amounting to 50% of the purchase price of the property in each case, from Giambrone.
The Court of Appeal backed the High Court decision, holding that the contract was inadequate to protect the interests of the purchasers, and that the firm did not provide enough relevant information, particularly regarding the payment structure of the project and the promoter’s commission. The Court of Appeal held Giambrone liable for the full consequences of their failure to properly advise purchasers of the risks of the purchase.
Penningtons Manches and Edwin Coe, which are acting for the claimants, said Giambrone and their professional indemnity insurers AIG now say there is no insurance money left for the claimants.
The two firms are now pursuing AIG, arguing that each client has a separate entitlement to the minimum £3m indemnity insurance that solicitors are required to hold. David Greene of Edwin Coe said “It’s a great win in a strong court but the solicitor’s insurers, AIG, claim there is no money in the pot for the winning Claimants which means the judgment is just stage one in ensuring proper compensation.”
Partner David Niven, who is leading the Pennington Manches team, said: ‘We are delighted with this decision. Our clients have been battling to recover substantial sums for nearly ten years. We hope that AIG will provide compensation without any further delay as our clients have suffered enough.’
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