A US legal firm that was forced to pay $36 million (€31.7 million) to an Irish company in a landmark legal malpractice suit is to appeal the case to a Chicago court.
Interclaim Holdings, based in Bray, Co Wicklow, won one of the largest legal malpractice suits in US history last month after suing a South Carolina legal firm for failing to protect Interclaim's interests in a lawsuit against a Canadian fraudster.
A Chicago district judge is expected today to allow the legal firm - Ness, Motley, Loadhold, Richardson & Poole - to stay payment of the $36 million award until it has appealed the case.
Interclaim, which tracks down payments due to litigants in international lawsuits, won the case against its former legal representatives for entering into an unauthorised agreement with James Blair Down, a fraudster Interclaim was suing on behalf of his victims.
Ness Motley has won hundreds of millions of dollars for clients in claims against tobacco companies but dissolved its partnership a year before the Interclaim judgment. Its former partners are involved in the current litigation.
However, tomorrow, Judge Rebecca Pallmeyer is expected to accept an undertaking by Ness Motley to lodge malpractice insurance bonds and payments due from legal suits against tobacco companies, worth nearly $40 million, as a guarantee pending its appeal.
Speaking from Interclaim's Irish headquarters, founder and director Mr Martin Kenney said he was confident that the appeal would not be successful.
He said that Interclaim had hoped that Ness Motley would lodge a $39.6 million bond (110 per cent of the award) as a security before lodging an appeal but said the court was likely to accept its alternative form of security.
The origins of the $36 million jury award began three years ago, when Interclaim hired Ness Motley to file a class-action lawsuit against Down, who was jailed for six months for defrauding hundreds of thousands of Americans in a telemarketing and mass-mailing scam.
Interclaim had tried to uncover Down's international assets after US authorities estimated he had gain in excess of $120 million illegally selling foreign lottery tickets to Americans. He particularly preyed on the elderly, many of whom lost tens of thousands of dollars, while allegedly buying a $17million home in Barbados.
However, Interclaim later sued its legal representatives, Ness Motley, after discovering that the lawyers privately entered into an out-of-court settlement with Down that would have completely cut out Interclaim from its share of the lawsuit against him.
Ms Laura McNally, a lawyer now representing Interclaim, said that Judge Pallmeyer had indicated on Friday that she would most likely accept Ness Motley's "unusual" offer of $39.6 million in future payouts from tobacco litigation as part of the payment securities it must offer before launching an appeal.
Ness Motley is to file an affidavit stating the terms of its security in the district court today.
Last week one of Ness Motley's malpractice insurers, Old Republic Insurance, filed a federal suit hoping to be released from its contract before Ness Motley pays out the money to Interclaim.
If Old Republic is successful, it will add another $10 million to the amount Ness Motley will have to pay Interclaim.
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