Magic circle law firm Linklaters escaped a negligence claim that could cost a client more than £6m in rent over 15 years.
Linklaters accepted responsibility for an error that prevented US-owned industrial conglomerate 3M UK from breaking the 25-year lease of its Berkshire technical centre. The High Court ruled that 3M UK brought its claim two days too late.
The decision meant that Linklaters escaped liability while the US company remained committed to paying £428,000 pa for the site until 2012.
In 1987, Provident Mutual Life Assurance Association granted the lease of the technical centre in Easthampstead Road, Bracknell, to 3M UK’s sister company, 3M UK Holdings.
The lease contained a break clause option, timed to coincide with the expiry of the lease of the 3M group’s headquarters, so that 3M could relocate the entire group to a single site.
Linklaters, which had advised the group when the lease was assigned to 3M UK during a group restructure in 1989, had failed to inform it that the option was personal to 3M UK Holdings.
Hart J ruled that 3M had held “necessary knowledge” of the error on 30 August 1995, when an in-house lawyer started work on a deed to vary the lease.
He said that 3M had been required to begin its action within three years of that date, but had not commenced a lawsuit until 1 September 1998.
A spokesperson for Linklaters acknowledged the decision, saying that the “the point before the court was a technical one brought up by insurers”. He added: “3M is a valued client of Linklaters’, so it would be inappropriate to comment further.”
3M said that it will “consider the judgment carefully”.
In 2001, 3M had secured a sale-and-leaseback agreement on a 22-year lease of its new facility at Amen Corner, which it had purchased for £20m in the 1990s in order to relocate the group. The site was subsequently acquired by property entrepreneur Nick Leslau.
3M UK plc and another v Linklaters & Paines Chancery Division (Hart J) 1 July 2005.
Stephen Hofmeyr QC (instructed by Simmons & Simmons) appeared for the claimants; Christopher Nugee QC (instructed by Barlow Lyde & Gilbert) appeared for the defendant.
References: EGi Legal News 15/07/05
