Barclays Private Clients International and Barclays Bank are suing mortgage brokers, valuers, solicitors and guarantors over an alleged mortgage fraud it claims cost it £12.7m.
Barclays is suing Savills Private Finance, Stocker & Roberts Partnership and O’Sullivan Law Solicitors for fraud, and Montague Lambert and the firm of solicitors formerly known as Saracens LLP for negligence in relation to a number of mortgages granted between September 2006 and April 2007.
Following a case management conference at the High Court on Tuesday, the trial is scheduled to take place between May and July 2012, if attempts to settle the case through mediation later this year are unsuccessful.
Michael Douglas QC, counsel for Barclays, told Master Foster: “There are six actions. Each of the cases is slightly different, but the essence is that the bank was, over a period of 10 months between September 2006 and April 2007, subjected to a succession of mortgage fraud and negligence by professionals, most of which feature in the various actions.
“We say we lost a total of about £12.7m.”
He claimed that chartered surveyor Stocker & Roberts prepared reports that were “persistently and grossly overvalued, consistent with a fraud,” adding that the areas of the properties were overstated in order to bring them in line with the stated price.
He said that, in respect of five of the actions, O’Sullivan Law “actively and positively misrepresented the sale price” of properties.
He alleged that, in four of the actions, Savills introduced the borrowers to Barclays and commissioned reports from Stocker & Roberts and that in two of those, the professional acting for Savills, Charles Goldsmith, received payments of £10,000 and £70,000 into his personal bank account very shortly after.
He added: “Against all of these three parties we allege fraud”.
And he claimed that Saracens negligently failed to notify the bank of a significant uplift in purchase price within a few months of two Park Lane properties – from £4.5m in an earlier sale to £15m in the sale in which Barclays was involved.
Douglas also alleged that Montague Lambert failed to notify the bank that it was dealing with a subsale of 4 Drayton Gardens, SW2, which was being bought for £2.3m and sold for £4.5m.
He added that his client did “reserve the right to allege fraud against Saracens and Montague Lambert”, if evidence of fraud subsequently emerges.
The Master ordered that the cases should be managed together, along with two related actions in the Chancery Division against mortgage guarantors Tanvir Mukhtar and Baljinder Singh, and ordered a transfer of those proceedings from the Chancery Division to the Queens Bench Division.
The other parties are defending the bank’s claims.
If mediation is not successful, the trial is expected to last five weeks.
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