Leading London law firm Mischcon de Reya, setting itself up for the UK’s largest law firm float, has had another major setback with an admission that it breached its duty by failing to file a hard copy of an appeal bundle in time on behalf of client, former Premier League football club Sunderland AFC.
The club is suing the firm in a professional negligence claim that has been estimated at around £20 million, although is almost certainly a far lesser amount, and could hardly come at (another) bad time for the firm after various setbacks to the major stock exchange float.
It accepted that it had failed to file the bundle with the the Court of Arbitration for Sport (CAS) in time during a long-running dispute over the signing of an injury-prone player, but the firm denies that the failure to file actually caused any loss to the club.
The claim relates to the signing of Argentinian midfielder Ricardo Alvarez from Italian giants Inter Milan in 2014 and is an unwelcome addition to the woes that have beset Mishcon in its stock exchange floatation.
Under the deal, the player joined the then-Premier League club on loan and would be signed permanently if a pre-existing injury to his left knee did not get any worse.
Sunderland says that, after a number of injuries, Alvarez saw a specialist who recommended surgery on his right knee for which Inter Milan would not give permission – so the club terminated the transfer and the player’s contract.
Inter Milan brought proceedings against Sunderland in a case that ultimately went to CAS, which ordered Sunderland to pay Inter Milan €10.5m (£8.8m) plus costs.
Separately, Alvarez successfully brought a claim against Sunderland for wrongful termination of his contract, with the dispute resolution chamber of football’s governing body FIFA ordering the club to pay £4.2m plus interest.
The club appealed to CAS and Mishcon filed an electronic copy of Sunderland’s appeal brief in time, but failed to file a hard copy before the deadline. CAS dismissed Sunderland’s appeal and, on Alvarez’s cross-appeal, ordered the club to pay its former player £4.77m plus interest of £1.1m.
Sunderland’s lawsuit claims that the breach by Mischcon meant that it lost the chance to challenge FIFA’s jurisdiction and lost the opportunity to argue that Alvarez lied about his knee injury.
Mishcon argued that ‘it is inevitable that CAS would have dismissed Sunderland’s appeal’ in any event. CAS rejected Sunderland’s assertion that Alvarez made any fraudulent misrepresentations ‘in unequivocal terms’ on the player’s cross-appeal, Mishcon’s barrister Daniel Saoul QC told the court.
George Woods, for Sunderland, today argued that the only relevant evidence for the court at trial is ‘the evidence that was put to the CAS’ in the club’s and Alvarez’s appeals.
Richard Salter QC, sitting as a High Court judge, ruled that Sunderland should provide further disclosure but said it was not ‘necessary or useful … for there to be the very extensive disclosure which the defendant is seeking’, inviting the parties to agree the scope of disclosure.
The trial of Sunderland’s claim is likely to be heard early next year.
Source: LawFuel and the Law Gazette