On 27 July 2022, Mr Justice Robin Knowles CBE handed down judgment in Bugsby Property LLC v LGIM Commercial Lending Limited and Legal & General Assurance Society Limited , following a four-week trial in the Commercial Court earlier this year.
Assessing expert evidence in relation to various heads of loss, Mr Justice Knowles ruled that Bugsby is entitled to £14.9 million in damages for the “loss of a chance” to secure a key financier, losing out on a bid to purchase Olympia after L&G decided to finance with Yoo.
Martello, instructed by Clyde & Co on behalf of the defendant, provided an expert witness to opine on issues related to property investment fund management.
The dispute relates to the sale of Olympia, the exhibition and events space, which was put up for sale by Capital & Counties in 2015. Bugsby claimed that in arranging finance for Yoo Consortium, L&G breached the agreement that was signed between Bugsby and L&G and ultimately led to the failure of Bugsby in acquiring Olympia. L&G admitted breaching the agreement, but argued that Bugsby has suffered no loss because Bugsby would not have been able to acquire Olympia in any event and Yoo Consortium would still have won the bid for Olympia even without L&G’s support.
A significant proportion of the total claim amount was Bugsby’s claim that its purchase of Olympia would have allowed Bugsby to launch a property investment fund, and Bugsby was thereby claiming damages of over £160m related to the potential fund return. Expert witnesses were required to estimate the fund return and comment on the likelihood of success.
In his judgment, Mr Justice Knowles stated he preferred the Martello expert evidence and ruled that there was not sufficient evidence that Bugsby would have “had a real or substantial chance” of raising a property investment fund, dismissing this element of the claim. The judge commented that in both witnesses “the Court had two thoughtful experts… but I preferred the wider experience and expertise of [Martello expert] Mr Jenkin informed by many years of discussion with private equity investors”.
The judgment highlights the challenges in quantifying a claim such as this – “this cannot be a precise exercise” – and notes the value of having expert witnesses with relevant practical experience versus academic.
Orlando Gledhill QC, Medhi Baiou and KV Krishnaprasad of One Essex Court instructed by Clyde & Co, acted for members of the Legal and General Group. Andrew Twigger QC, Thomas Munby QC and Duncan McCombe, instructed by Signature Litigation LLP, represented the claimant Bugsby.
Mr Justice Knowles’s comments and the full judgment can be viewed here: https://www.bailii.org/ew/cases/EWHC/Comm/2022/2001.html