LG, the law firm, was accused of negligence in the High Court today in the latest twist of an ongoing saga involving a former partner who stole more than £6 million of clients' money.

Michael Fielding, a former corporate partner at LG, was jailed for five years in 2005 after admitting to 24 counts of theft and 89 other offences. He was accused of making 140 unauthorised withdrawals from client accounts.

Today, creditors seeking to recover money from Fielding’s wife Sandra, who was declared bankrupt in 2004, turned their attention to his former firm.

In an extremely unusual case, a bankruptcy trustee attempting to recover Mrs Fielding's debts, has sued LG for £7.3 million.

The trustee claims that the firm, formerly known as Lawrence Graham, negligently allowed Mrs Fielding to become liable for her husband's debts when it advised on the £3 million sale of the Fieldings' former family home in Regent's Park, London, in 2000.

Bernard Livesey, QC, for the bankruptcy trustee, said his client was making a “straightforward solicitor's negligence claim”.

The bankruptcy trustee claims that LG should have advised Mrs Fielding that the way in which the property sale was structured meant she would become liable for substantial debts that her husband had run up “without her knowledge”.

Although the house was owned by Mrs Fielding, no one from LG contacted her throughout the sale and subsequent purchase of another smaller property nearby, instead relying on Mr Fielding's instructions, Mr Livesey said.

The bankruptcy trustee argues that if LG had not given Mrs Fielding the negligent advice, she would not have become liable for her husband’s debts, some of which stemmed from the collapse of his earlier law firm, Grangewoods.

She would therefore have been in a stronger financial position and so her creditors would have received more money.

The court heard that although the claim was being brought by a bankruptcy trustee, the Royal Bank of Scotland would be the largest beneficiary of a successful claim because it was entitled to 94 per cent of monies recovered.

Neither Mrs Fielding, who lives in Florida, nor her husband, is involved in the proceedings.

Fielding, who graduated top of his year in the Law Society final exam, used his “immense intellectual capacity” to steal from his clients and partners, his sentencing hearing was told. Prosecutors said Fielding, who was barred for life from practising as a solicitor, had “a love of clothes and expensive jewellery”.

LG said: "We have been advised that this is an unmeritorious claim and we're vigorously defending it."

The firm repaid all clients who lost money through Fielding's deception.

The hearing continues.

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