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Law firm Mishcon faces UK trial over $3.4 mln in 'unlawfully extracted' fees

Thu, 10th Nov 2022 16:05

Law firm received $3.4 mln taken from property group, judge says


Mishcon says lawsuit will be "defended robustly" at trial

By Sam Tobin

LONDON, Nov 9 (Reuters) - British law firm Mishcon de Reya received approximately 3 million pounds (approximately $3.4 million) in legal fees which had been misappropriated from a property investment business, a judge in London has ruled.

Tonstate Group's claim that the money Mishcon received from its former client Edward Wojakovski ultimately belonged to the group can be decided in the company's favour without a trial, Judge Iain Pester said on Wednesday.

But he said Tonstate's case that it is entitled to recover the money paid to Mishcon, on the grounds that the firm should have known it was misappropriated, would have to be resolved at trial, rejecting Tonstate’s application for summary judgment.

A Mishcon de Reya spokesperson said: “The claimants attempted to make this a matter for a summary judgment application and failed. This will now go to trial and any claims will be defended robustly.”

Tonstate’s lawyer Shlomo Rechtschaffen said in a statement that his client was pleased with the ruling.

The judgment follows a long-running dispute between Tonstate and Wojakovski, a former director of the group who hired Mishcon to represent him when he was sued by Tonstate in 2018.

Tonstate, which was owned by Wojakovski and his former father-in-law Arthur Matyas, brought the claim to recover nearly 13 million pounds which Wojakovski extracted from the group.

Wojakovski admitted to taking the money from the company and his defence that Matyas had consented was rejected by a judge at London's High Court in 2019. The case is Tonstate Group Ltd and others v Mishcon de Reya LLP, BL-2021-001905. For Tonstate: Andrew Fulton KC and Sam Goodman, of Twenty Essex, and Rechtschaffen Law. For Mishcon: Jamie Smith KC, of 4 New Square Chambers, Pia Dutton, of 3VB, and Clyde & Co. (Reporting by Sam Tobin)

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