Law firm claims no duty of care to Lynchs

A LAW firm being sued by businessman Philip Lynch and his family in an effort to prevent AIB pursuing them for repayment of a €25 million development loan was never retained by the Lynchs in connection with that deal and owed no duty of care to them, the Commercial Court was told yesterday.

Michael Cush SC, for Matheson Ormsby Prentice (MOP) Solicitors, said the firm was never retained by the Lynch family in connection with the €25 million loan issued to the family and developer Gerry Conlan to buy development lands in Waterford and never advised the family concerning the transaction.

It was “absolutely crucial” to the case that the Lynchs never claimed MOP was retained by them and, in those circumstances, it was “absolutely untenable” for the Lynchs to allege MOP owed them a duty of care.

A conclusion by the court that MOP had a duty of care to the family would “so radically alter the ambit of a solicitor’s duty of care as to be almost against public policy”, counsel added. Mr Cush also argued it was difficult for another law firm being sued by the Lynchs, LK Shields, to say they were not retained by the family.

Counsel said LK Shields was asked for advice by Robert Burns, Philip Lynch’s adviser, on a specific issue at the heart of the legal action – whether AIB only had recourse to the lands in Waterford for the €25 million loan.

LK Shields had answered that question in the affirmative and its answer was “totally wrong”, counsel said. Irrespective of whether the court concluded the family had retained LK Shields to advise on the financial aspects of the transaction, this was the end of the issue as regards breach of duty of care by that firm.

Counsel was making closing submissions in the action by Mr Lynch, his wife Eileen and four children brought against AIB, LK Shields and MOP in an effort to avoid AIB pursuing them over the €25 million loan of February 8th, 2007. The family allege the defendants were negligent in relation to how they dealt with the loan and contend they are entitled to be indemnified against any claim by AIB against them for repayment.

The defendants deny the claims. AIB contends the loan was full recourse to all borrowers and is counter-claiming for €25 million judgment orders against the Lynchs and, in separate proceedings, against Mr Conlan.

The final loan facility document was signed on February 8th, 2007, by Judith Whelan, daughter of Mr Lynch, on behalf of the family. An earlier draft facility contained a special condition providing for recourse to Philip Lynch and Mr Conlan but that special condition was removed from the final loan facility with the effect, AIB claims, of giving it recourse to all borrowers for the €25 million.

Submissions continue today.