Trowers secures landmark victory in High Court property fraud case

Trowers & Hamlins, has achieved a landmark victory in a big scale fraudulent property investment case acting for 4VVV Ltd and Others v Spence & Others.

The firm acted for the lead claimants in a complex fraud group action before the High Court in a case that centres on a multi-million-pound property investment scheme across the Midlands and other parts of the UK. The High Court ruled in favour of the lead claimants marking a critical first step towards obtaining redress for the claimants who invested in the schemes.

The ruling concerned investments in student accommodation and holiday properties across the Midlands and other areas of the UK sold between 2012 and 2019. The claimants alleged that the investments were fraudulent schemes and the promised returns on these investments did not materialise, leading to the 435 claimants taking action after incurring substantial financial losses. With numerous companies involved now insolvent, the claimants pursued personal claims against the defendants, with estimated damages around £45 million.

Birmingham based partner Helen Briant, who led the Trowers team on case commented, “This is a fantastic result for the lead claimants and a demonstration of the strength and depth of the litigation team at Trowers & Hamlins in the Midlands and across the UK. With the support of the exceptional Daniel Saoul KC and Matthieu Gregoire and our dedicated clients, we have been successfully fighting this complex litigation for over four years. I am very pleased that this monumental result brings our clients closer to the redress they have long deserved, and we will continue to work hard to ensure that all of our claimants receive justice.”

Trowers & Hamlins, working alongside a Counsel team led by Dan Saoul KC (4 New Square) and Matt Gregoire (Essex Court), successfully secured declarations that these investments constituted unregulated collective investment schemes (UCIS). This ruling supports the claimants’ right to recovery and affirms the legal safeguards protecting investors in the UK.

The lead claimants succeeded in their claims for deceit, unlawful means conspiracy, rescission of leases induced by fraudulent misrepresentation, and recovery of all monies paid, underscoring the significant impact of this judgment for property investors.

The trial of the ten test cases took place over a ten-week period in the Commercial Court, heard by Justice Foxton, who held that the defendants knowingly conspired to deceive investors over many years. The judge’s decision highlighted the considerable distress and financial harm the defendants’ deceptive practices caused.

Helen Briant added, “It is no secret that pleading fraudulent misrepresentation is no mean feat and this judgment is highly significant in demonstrating the scale in which such allegations can be presented and fought. Further, following FCA v Forster [2023] EWHC 173 (Comm) we are once again reminded of the importance of the FSMA regulation being there to protect potential investors from the significant risks that such investments can present and the necessity for investments of this kind to be offered by only authorised or regulated individuals.”

The Trowers & Hamlins team included partner Helen Briant, partner Alex Sharples, associate Meera Solanki, and other members from Trowers & Hamlins’ Dispute Resolution teams who have each played a key role in this precedent-setting case.