Linklaters, the world’s second-largest law firm, gave “careless and negligent advice” that resulted in a client losing millions of euros, a court heard today.

Lawyers for Levicom, a Baltic telecoms group that is suing Linklaters for £16 million, accused the “magic circle” law firm of negligently overstating its chances of winning a dispute with a rival telecoms group.

Justin Fenwick, QC, from 4 New Square chambers, for Levicom, told the court that the case centres on advice given by Andrew Legg, a former Linklaters partner, who assured Levicom that it had “at least a 70 per cent chance” of winning a dispute with rival Tele2.

In addition, Mr Legg told Levicom that it stood to win damages that would be “very substantial indeed”, the court heard.

Mr Fenwick said that on the strength of Linklaters’ advice, Levicom turned down an offer to negotiate a settlement at the start of the dispute and instead chose to take it to an arbitration tribunal.

He added that Levicom turned down two further settlement offers, again on the strength of Linklaters’ advice that it was on "strong ground" and “should take a hard line”.

Shortly after the dispute came to arbitration, it settled for an amount that Mr Fenwick said was substantially less than Levicom could have achieved had it instead negotiated a settlement at the outset. Levicom is suing for the difference, around £16 million, in compensation.

Mr Fenwick said Linklaters gave “unrealistic advice” and “should have admitted that the case was much more difficult and the damages far less secure” than it had indicated.

He added that before a law firm can tell a client to “dump the offer and arbitrate”, it must consider all likely outcomes, which Linklaters did not.

Giving evidence, Markus Pederiks, a senior executive at Levicom, said the company acted on the basis of advice from Linklaters' lawyers, whom he believed were experts in the field of dispute resolution.

“Linklaters told me we had a very strong claim and we were likely to get substantial damages [at arbitration],” Mr Pederiks said.

Stephen Moriarty, QC, of Fountain Court chambers, acting for Linklaters, said Mr Fenwick had been “over-egging” the case.

“Mr Fenwick posits a standard of conduct [from solicitors] that is simply unrealistic in the real world," Mr Moriarty said.

Linklaters said: "We believe that the claim is wholly without merit and are contesting it."

Levicom is not suing Mr Legg, who left Linklaters in 2004, as an individual. Mr Legg is now a partner at Mayer Brown.

The case continues.

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