Strengthening the case for affordable justice through group actions
Investors in Northern Powerhouse Developments
Our group actions team represented 134 investors in their bid to seek compensation for losses incurred in one of the biggest collapsed property schemes of its kind in the UK. The investors’ claim for negligent professional advice from their solicitor on their purchase of the property investment, promoted by Northern Powerhouse Developments, is a landmark in the growing trend for claimants who might otherwise be priced out of litigation to seek justice as a group against a common defendant.
Court of Appeal paves the way for timely and cost-effective justice
A group of 134 individuals invested in nine property investment schemes promoted by Northern Powerhouse Developments Ltd in different parts of England and Wales between 2017 and 2020 and sought advice on this from solicitors Williams & Co. Northern Powerhouse was a holding company set up to acquire hotels and care homes for refurbishment and sale to investors as individual rooms by way of a long lease.
Investors put in retirement cash or life savings, in some cases up to £100,000, paying upfront with a view to entering into a sub-lease with a management firm offering to pay them guaranteed rent and buy-back provisions. They expected an annual return of 10% on their investment and the opportunity to sell it back at a 25% profit after a decade. However, the purchase of some of the property developments never completed and when they failed, investors were left with collective losses estimated at £14 million.
In 2023, some of the investors took their claim for damages to the High Court using a single claim form against William & Co for alleged breaches of duty in the firm’s advice – notably its failure to warn of the risks of completion not taking place and the dissipation of the investment deposits. Williams & Co argued that it would not be ‘convenient’ for the claims to be determined in a single set of proceedings because different advice was given to different claimants, at different times, on different schemes, and no decision in one case would bind another. The High Court disagreed, finding sufficient common issues between the claims to justify the use of a single claim form.
Williams & Co’s appeal was dismissed by the Court of Appeal, paving the way for affordable and timely justice for these and other claims which can ‘conveniently’ be disposed of in the same proceedings, where they contain significant common issues of law and fact.
Key takeaways
This landmark case strengthens the case for group actions in the UK
The court decision has strengthened the case for affordable class actions and collective redress in the English courts. The economies of scale they bring enable substantial and often life-changing redress for consumers, private investors and businesses.
Paving the way for future investors who may have no other route to seek redress
This judgment means that, provided it is considered ‘convenient’, any number of claimants can use a single claim form to start any and all claims, such that group claimants will be able to seek access to justice in large-scale litigation in a simple, cost-effective way.
Key facts
134
Total number of claimants
£14
million
Loss incurred by investors
9
Development schemes across England and Wales
A lot of highly educated people were taken in. It’s a life-changing sum of money to lose; you work a long time to build that up.
