Retired couple settle action against Bloxham

A RETIRED solicitor and his wife have settled their Commercial Court action against various partners in Bloxham Stockbrokers over allegedly negligent advice to invest in a bond which later fell by more than 97 per cent in value.

The action by Maurice Curran, a former chairman of the Solicitors Mutual Defence Fund (SMDF), is among 10 sets of proceedings brought over the same bond in which Bloxham is facing claims amounting to some €10 million.

Among the claimants is the SMDF itself, the main insurance body for solicitors with 3,500 members, which alleges its ability to indemnify solicitors had been affected by more than €8 million losses suffered after the bond’s value fell.

The court previously heard the SMDF invested some 30 per cent of its portfolio in the bond.

It is alleged Bloxham represented the bond was a suitable investment issued by Dresdner Bank but it later emerged the bond was not issued by Dresdner and was not suitable.

Yesterday, Mr Justice Peter Kelly was told by Declan McGrath, for Bloxham, and Bernard Dunleavy, for the Currans, the couple’s action had settled and could be struck out with no order except one vacating costs orders made to date.

The Curran case was listed for hearing on February 1st next along with two of the other actions against Bloxham.

In his action, Mr Curran claimed, relying on advice from Bloxham, he and his wife had in January 2005 invested €400,000 in the bond. It later emerged the bond was not suitable for their investment requirements and the investment had fallen by 97 per cent, he claimed.

The court previously heard Bloxham is suing Morgan Stanley in the UK for breach of contract relating to the bond but that claim is limited to €42.75 for every €100 invested in the bond.

It has been alleged a “call option” exercisable by Morgan Stanley compromised the integrity of the bond as a secure investment vehicle.

A “mandatory redemption event” exercised by Morgan Stanley meant the bond holders would only recover 3 per cent of their investment, it is claimed.