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Various Claimants v Giambrone & Law (A Firm) & 5 Others, 7 July 2015, HC

Giambrone is an international law firm which acted for the claimants’ property investors on the purchase of various off plan properties in Calabria,…

Giambrone (“G”) is an international law firm which acted for the claimants’ property investors on the purchase of various off plan properties in Calabria, Italy.  G said it would carry out due diligence.  However, the properties were never completed and the claimants lost their deposits and complained that G had never advised them that the developments were likely to be closely linked to organised crime.  The issue was whether G had undertaken to go further than simply carry out conveyancing formalities.  The court found, on the basis of the terms of the retainer letter, G had undertaken to do more.  The judge found that G knew organised crime could be involved in building projects in Calabria and that created risks which should have been communicated to the claimants.  The lawyer at G was to be judged by English standards and perspective, regardless of operating out of their offices in Italy. G was criticised for commercial opportunism when it did not have the resources to provide the appropriate services. The contract it drew up did not protect the claimants. Breach of duty was accordingly established.

Comment

The case is an extreme example of the pitfalls of making bold assertions and claims as to expertise in marketing literature which the court found acted as inducements to retain the firm.  The promise to carry out due diligence on the development and the limited company was simply not fulfilled.  These promises went further than just saying that the conveyancing formalities would be fulfilled.  This is a case where the firm went over the top to attract business and it backfired.