German lawyers cause damage in Germany


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An English broker of derivative investments has brought a claim against a German law firm, claiming that the firm wrongfully induced the broker’s clients to breach their contracts by persuading them to bring claims against the brokers in Germany in breach of exclusive jurisdiction clauses in favour of the English court.

The broker claimed that the lawyers had induced 70 of their former clients to bring claims in Germany, in which they acted for the claimants, resulting in financial losses in excess of £2 million, including the costs of defending and settling those claims.

It is unusual for lawyers to be sued by third parties for the consequences of their advice to clients, but there can be no objection in principle to such claims, particularly where the lawyers have engaged in a campaign to encourage deliberate breaches of contract. No doubt the extent of the campaign provided the evidence that would not normally be available when a lawyer gives confidential advice to a client.

The German lawyers challenged the jurisdiction of the English court in the claim against them under the terms of the Brussels Regulation. The particular question for the Court was whether England was the place where the harmful event occurred, within the meaning of Art 5(3). The Commercial Court held that the claimant had been deprived of the benefit of the exclusive jurisdiction clauses which were suffered in England. However, in cases of economic loss, the place where the harmful event occurred was the place where it directly had its effect. That was where the harmful consequences were suffered, which was Germany. It was not enough for the claimant to say that they ultimately felt the consequences of the loss at their place of domicile, nor for them to say that it was from that place that they had funded the expenditure (AMT Futures Limited v Marzillier, Dr Meier & Dr Guntner Rechtsanwaltsgesellschaft mbH [2014] EWHC 1085 (Comm)).

Paul Howcroft, Partner, Fladgate LLP (phowcroft@fladgate.com)

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