I, along with other creditors, installed a Liquidator into a Company, whom we believed was fraudulently trading.
I was the sole funder of the Liquidator and his legal team i.e. his solicitors and Counsel. Initially I paid the Liquidator direct; I telephoned him direct and have one lever arch file of correspondence directly from him. The Liquidator then took a back seat and I had direct contact with the solicitors, I telephoned them direct and have a further 2/3 lever arch files of correspondence direct from the solicitors to myself, I also thereafter paid the solicitors directly, either by cheque or directly into a client account.
Would it be safe to assume that I was owed a duty of care by the Liquidator, the solicitors and Counsel, direct or otherwise?
I was asked by one of the solicitors, ten days before the time limitation period was up, if I could provide £100,000 to prove to the Liquidator, that I could pay an Insurance Premium, when one became available. I was told, should this money not be in the solicitors possession within these 10 days, the Liquidator would not enter the case into Court. This £100,000 was sent to the solicitors client account, within a few days. I received a fax from the solicitors, stating this money was for Adverse Costs, I telephoned the solicitor immediately and told him that the money sent could only be used for an Insurance Premium, the solicitor stated that that was what it was called “an Adverse Costs Insurance Policy” and that this money would be kept in the client account in my name, till an Insurance Premium was obtained.
One year later, I was told by the same Solicitor, that an underwriter he had been in contact with had offered £750,000 Insurance Cover for a Premium of £225,000. I raised this premium and it was agreed that £100,000 would be sent immediately and on the receipt of same, the Solicitors firm would cover the premium until the remaining £25,000 could be sent some 4-6 weeks after, wouldn't it be safe to assume that I had indeed paid the Premium for Insurance Cover of £750,000?
I believe that the 2 extracts of documentation below, that I had received from the solicitor involved, confirms that I had paid this money, on the belief that this Insurance Cover existed.
"Further to my telephone conversation with ----- earlier today, I confirm that the proposed Underwriters have requested comfort that you are able to pay a premium of 30% of £750,000, before they continue with the processing of the application further.
I understand that you have a further £100,000 available in order to fund the premium together with the £100,000 ------ currently holds. I also understand that you are able to obtain a further £25,000 if necessary.
In order to give the proposed underwriter some comfort please forwards the £100,000 currently available to ------- client account, details of which are set out below."
Would it be naturally assumed, that the underwriter was the Insurer, as I had believed?
The £25,000 was sent 5 weeks later, as confirmed in Letter 2 below.
"I confirm receipt of the cheque for £25,000 in respect of the anticipated insurance premium.
Also, I confirm I have discharged ------ fee’s to date amounting to £19,787.00 including VAT."
On receiving the above letter, I telephoned the Solicitor and asked what he meant by the “Anticipated Insurance Premium” as he had told me, as stated above that the premium would be covered until the remaining £25,000 was received. The solicitor involved stated that this was just a formality as it takes time for the insurance contract to be finalised.
The words “Anticipated Insurance”, does this give the solicitors the right to use this money any way the solicitors see fit, without our express permission, or can this money only be used for the premium for the specific £750,000 insurance cover for what the money was actually intended for?
I have recently found out that this Insurance Cover had not only never existed, but had never even been offered to the solicitor, by any Underwriter or Insurer. This money, we later found out was used to pay Adverse Costs amongst other things. Is this a fraud committed against myself i.e. to ask me for money with the intent that I a creditor believed, as seen in the enclosed letters, that it was for Insurance Cover, which actually never existed?
If the answer to 5 above is yes, what recourse do I have?
Thank you for your assistance