A law firm accused of causing an Aberdeen entrepreneur to lose control of his business has been cleared of fraud but was found to have had a conflict of interest, a judge has decreed.
Burness Paull said it will continue to defend the legal action brought by Bob Kidd, the founder of former Aberdeen oil services company International Tubular Services (ITS), who is attempting to sue the law firm for up to £260million.
The finding is the latest result in a series of acrimonious legal disputes over the sale and subsequent failure of ITS which collapsed into administration almost four years ago before being sold to a rival.
Mr Kidd claims that law firm Paull and Williamson – now known as Burness Paull – caused him to lose control of the company, leading to him suffering the losses claimed.
Mr Kidd, who has once honoured as Grampian Industrialist of the Year, has claimed in court that partners working for Paull and Williamsons’ actions – which merged with law firm Burness in 2012 – had been working for or colluding with US venture capital firm Lime Rock Partners, which had bought a stake in ITS from Mr Kidd in 2009.
In a summary decree, judge Lord Tyre agreed that the law firm had breached its fiduciary duty to its client Mr Kidd as a result of its former partner, Ken Gordon, having acted for Lime Rock, a claim which Burness Paull has admitted.
But the judge dismissed claims in the court of sessions that the law firm’s or partners’ actions was fraudulent.
Burness Paull confirmed that Mr Gordon left his position as partner with the firm in October last year.
It is thought Mr Kidd will press ahead with the next stage of the law suit, seeking £168million “plus interest” in an action that has been live in court for the last 18 months.
Court papers revealed that Mr Kidd had received “only $10million” (£8million) from the sale of a stake in the company which he had founded in 1989 and which employed around 1,000 by the time he stood back from day to day management of the business, before its collapse.
A spokeswoman for Burness Paull said: “We note Lord Tyre’s decision and will continue to defend the action, which relates to a historical case involving Paull and Williamsons, prior to the merger with Burness.
“It would be inappropriate to comment further on the matter at this stage.”
A spokesman for Mr Kidd, who is now resident in Cyprus, said that he “welcomed today’s judgement and hoped that matters would now move towards a conclusion”.
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