Guernsey Press

£20m. judgment in Arch Cru case

A GUERNSEY company has won a £20m. claim for damages against a single former director arising from a case described during the trial as ‘the biggest financial scandal in the UK for many, many years’.

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The award to SPL Guernsey ICC Ltd – formerly Arch Guernsey ICC Ltd – and some of its associated cells against Robert Addison is one of the largest ever made by jurats of the Royal Court.

The trial took place over several weeks.

The case covered only a small part of the plaintiff’s wider claim for US$171.1m, £46.75m. and 12,500 euros.

It concerned breaches of duties that Mr Addison was said to owe to the plaintiffs, which was listed on the Channel Islands Stock Exchange, in his capacity as director.

Advocate Paul Richardson from AFR Advocates represented SPL, while Advocate Anthony Williams, from Appleby, represented Mr Addison.

The trial heard how Mr Addison, who was also chief operating officer of London-based Arch Financial Products LLP, did not exercise due care and diligence in respect of his failings as a director in relation to an investment made in the business of the Club Easy Group, which owned and operated student properties in the UK.

The investment in Club Easy was made via Lonscale Ltd, an Isle of Man Company which, through a series of companies connected to the Isle of Man and the UK, supplied more than 2,000 student bedrooms in cities including Hull, Lincoln, Exeter, Durham and Loughborough.

The court heard that among his other breaches, Mr Addison failed to disclose a conflict of interest that arose out of payments including a £3m. fee to Arch Financial Products LLP of which he was also chief operating officer. The payment was part of a deal to buy the business of the Club Easy Group, which is now worthless.

In a lengthy judgment delivered by Deputy Bailiff Deputy Richard McMahon, the court concluded that Mr Addison had given answers that were evasive.

The jurats were unimpressed at how he appeared to feign ignorance about documents he must have seen and they considered he was out of his depth.