Firm gets just £2 for legal 'win'
Airport chiefs "formally" won a fight today with a law firm they had sued for alleged negligence following a row over multimillion-pound bonuses - and were awarded £2 damages.
The Court of Appeal said solicitors Eversheds should have provided a "memorandum" explaining a summary of changes to contracts given to a chief executive and a finance director.
But appeal judges questioned whether damage was done to Newcastle International Airport Ltd - the company which runs the airport.
They said "formally" the correct course was to allow the appeal by airport chiefs. But they said Eversheds should pay "nominal" compensation.
And they said no decisions had yet been made on who should pay the costs of the litigation, which are likely to run into millions of pounds.
Eversheds said appeal judges ruled in the firm's favour on most issues - and a spokeswoman said the firm was "pleased".
In October last year, a High Court judge ruled against airport bosses, dismissing a claim for damages for alleged negligence against Eversheds.
Airport bosses asked three appeal judges to overturn Mrs Justice Proudman's ruling at an appeal hearing in London in June, and the appeal court delivered its decision today.
A spokeswoman for the firm said: "We are pleased to confirm that the Court of Appeal has upheld the earlier decision in Eversheds' favour that the airport executives at Newcastle International Airport had apparent authority to instruct Eversheds. The court also upheld the judge's findings on causation .
"The court found that although Eversheds had been entitled to accept instructions from the executives, they should have provided an explanatory memorandum to Newcastle International Airport Ltd's remuneration committee.
"As a result, the firm has been ordered to pay nominal damages of £2. However, the Court of Appeal accepted the earlier finding that the lay chair of the remuneration committee would not have paid attention to a memorandum."
Airport chiefs had sued Eversheds in relation to contracts entered into with former chief executive John Parkin and former finance director Lars Friis, who is dead, in 2006. Eversheds said lawyers acted in ''good faith on the basis of instructions''.
Mrs Justice Proudman said directors of Newcastle International Airport had not properly understood that they entered into contracts which allowed the two men to claim bonuses totalling £8 million seven years ago.
Airport chiefs complained to appeal judges that Mrs Justice Proudman had been wrong on "all issues".
But appeal judges ruled in their favour on one point relating to a "summary" memorandum and against them on others.
One appeal judge, Lord Justice Rimer, said today: "Formally, I consider that the correct course would be to allow Newcastle International Airport Ltd's appeal."
And he added: "Eversheds must pay nominal damages of £2."