ONE of Britain’s biggest property-law firms has become embroiled in a spectacular fraud claim.

The case, involving more than £15m, is being brought against firms of solicitors that have been absorbed into DLA Piper.

The claim alleges that the solicitors were involved in fraudulent deals involving former directors of Hampton Trust, a property company that is now in effect controlled by funds run by JO Hambro Capital Management.

A claim was lodged with the High Court on Friday.

It names as defendants DLA, Dibb Lupton Alsop and Alsop Wilkinson - all predecessors to DLA Piper, which describes itself as Britain’s fifth-largest legal-services organisation by turnover, with more than 2,800 employees.

DLA Piper itself is not being accused of any fraud. The allegations focus mainly on a former partner of the firms that were absorbed into DLA Piper.

The claim details a string of allegations dating back to the mid1990s.

It includes the accusation that in 1996 and 1997, the solicitors, “in fraudulent breach of trust” took more than £5m of Hampton’s money that was sitting in their client account and paid it to a firm controlled by Hampton’s then directors.

The alleged frauds included one involving a payment of £1.8m. “[The solicitors] tried to cover up the fraud,” claims Hampton.

And Hampton Trust says that more than £100,000 of its money held in a solicitor’s client account was taken to pay for legal work that had been done for a private company owned by the directors.

According to the claim, in 1997, some of Hampton’s money was used to pay for a holiday home in Florida for a man who was then associated with the company.

And the solicitors are accused of dishonesty in handling a deal in which one of Hampton’s offshoots sold a property to one of its directors for far less than it was worth.

That deal took place in 1999. But the court claim alleges that the solicitors were negligent in two further sales, in 2003 and 2004, where again the properties were undervalued.

It goes on: “The defendants were also negligent in relation to a sale of various of Hampton’s subsidiaries in 2003 with the result that Hampton was forced to make a payment of £6m.”

Hampton was the subject of a reverse takeover in 1996 by a private company, Marplace, controlled by three men, Graeme Jackson, Neil Ankers and Felix Pole.

Hampton warned in 2005 that it was at risk of going bust. Holders of convertible loan stock had not been paid interest for more than two years. The company was delisted at the end of that year ahead of a restructuring, masterminded by activist investor Christopher Mills of JO Hambro Capital Management.

Creditors were paid off and investors agreed to a buyout.

Now, Mills is putting his weight behind Hampton’s claim to recoup money from solicitors who worked for its old management.

Part of the claim by Hampton involves a property purchase in Warrington that stalled. More than £500,000 of Hampton’s money was transferred to the solicitors’ client account in anticipation of the deal. But then it appeared unlikely the transaction would go ahead. Instead of the money being returned to Hampton, it went to repay debts that were owed by Marplace, says the claim.

In a second deal, Hampton handed its solicitors £5.7m purportedly to pay for a property in Nottingham. But in fact the deal was worth less than £4m, according to the papers lodged in court. The balance – £1.86m – was used to pay off Marplace debts, according to the claim.

There was an attempt to “conceal from Hampton that the payment had been made”, say the court documents. The claim also details a transaction in 1997 in which, according to Hampton, £30,000 was paid into the account of a firm of lawyers in Florida.

“The payment was not for any purpose of Hampton nor of any benefit to Hampton,” says the claim. Hampton alleges that the money was used to buy a holiday home in Florida.

Hampton is claiming £14.3m from the firms of solicitors now under the DLA Piper umbrella. On top of that, it is seeking interest, almost £1m in fees that the solicitors charged Hampton plus legal costs. It is likely that the total will be about £20m.

Hampton is using the City lawyers Allen & Overy to pursue its claim. Barlow Lyde & Gilbert, acting for DLA, said it couldn’t comment. DLA did not respond to questions.

Jackson, Ankers and Pole have made out-of-court settlements with the company. They have not admitted liability but are understood to have handed over more than £2m in total.

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