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A group of 71 investors are threatening to sue law firm ELS International Lawyers LLP over claims its predecessor firm European Legal Solutions SL gave negligent advice on Spanish property investments.
Law firm Regulatory Legal, on behalf of the investors, is pursuing ELS International Lawyers LLP for up to £2.8m in compensation as according to the Solicitors Regulatory Authority (SRA) it is the successor firm to European Legal Solutions SL.
Regulatory Legal claims European Legal Solutions SL said it was offering impartial advice on Spanish property investments while at the same time being employed by the site promoters.
Investors lost their money when the site developers went bust without the cover of legally required bank guarantees, which Regulatory Legal says European Legal Solutions SL should have ensured the developers obtained.
In a statement a spokesperson for the SRA says: "Our records show European Legal Solutions LLP was the successor to ELS SL. There was then a change of name to ELS International Lawyers LLP on 31 March 2009, thus ELSIL LLP would be a continuing practice and successor to ELSSL."
ELS International Lawyers LLP is contesting why this case is being brought and its identity as a successor firm to European Legal Solutions SL. It argues that it cannot be a successor practice because European Legal Solutions SL is still in existence in Spain and it can't be liable for advice given by the Spanish firm.
Regulatory Legal says European Legal Solutions SL offered advice on the structure of various right-to-purchase (RTP) contracts at three developments in Southern Spain, before investors sought out an IFA to execute the transaction.
Principal of the law firm, Joe Ezaz, was also a director of one of the main property managers used to promote the investments, Stately Investments UK LLP. Ezaz's colleague, Darren Dale, was also a director of associated company, Stately International Investments Ltd.
Both Stately Investments UK and ELS International Lawyers were registered at 12 Burleigh Street, London, WC2E 7PX.
ELS International Lawyers LLP were incorporated on 1 April 2006, according to the SRA. Joe Ezaz left the company on 8 February 2010 and Darren James Dale departed on 25 September 2009.
In a separate case, Ezaz is currently wanted under charges he misappropriated €9.8m (£8.4m) from the Stirling Mortimer Global Property fund. Stately Investments UK was one of two promoters hired by the Stirling Mortimer Global Property fund to find purchasers for RTP contracts on the same Spanish sites.
The Stirling Mortimer board dismissed Stately Investments, and other promoter Majestic Investments, in August for failing to find enough purchasers for the fund.
A High Court judge last month ordered ELS International Lawyers to repay the missing £8.4m as it presided over the disappearance of the money from a supposedly secure Escrow account. ELS International Lawyers's legal team say they will pursue Ezaz for the money.
Regulatory Legal says it applied at the High Court at Birmingham for disclosure of client files connected to the Spanish property case but ELS International Lawyers said it did not have these documents.
A spokesperson for Regulatory Legal says: "The investors allege professional negligence against ELS International Lawyers LLP. The claim is a multi-million pound claim relating to Spanish property investments. Our concern is to ensure our clients' interests are protected."
ELS International Lawyers was offered the chance to comment on this story but declined to do so.
Regulatory Legal says it is interested in speaking to fundholders within the Stirling Mortimer fund ranges where ELS International Lawyers LLP or European Legal Solutions SL have been involved.
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All in the same boat!!
When buying property off-plan in Spain I think most people were ill informed. I certainly was. I had no idea that I should have a bank guarantee .... and now am left in the same boat as thousands of others having paid a deposit on a property, mine with San Jose, their subsequent bankruptcy, of which I feel the outcome is still unsure. After buying off plan,and with rumours that San Jose were heading for the wall, I paid 200 euros to a solicitor in Torrevieja to advise me on the possibility of obtaining a bank guarantee. The outcome of this was that I would have had to pay an annual extortionate amount for this privilege which should have been in place at the outset; so just another 200 euros out of pocket. I have kept up with the court process, attended meetings, but am still unsure if anyone will ever receive their deposits back, albeit a reduced deposit and should this ever happen in 4/5 years time I will be extremely surprised. It is my hope that the San Jose build at Santa Ana, Jumilla, Murcia does proceed as there is a vague possibility that I and many others may be able to sell on their property and get deposits back sooner rather than much much much later if at all.
Posted by: Marianne Goodman
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