An appeal court judge has granted 134 property investors leave to contest a single ‘class action’ claim against a solicitor which is alleged to have provided negligent professional advice on an investment scheme.

Williams & Co Solicitors gave advice about nine different property schemes relating to projects promoted by Northern Powerhouse Developments (NPD) between 2017 and 2019, operating through various associated companies. High-profile property developers Gavin Woodhouse and Robin Forster were behind the firm, which last year claimed to have a revenue of some £4.5 million on one funding website.

Investors had put in retirement cash or life savings, in some cases up to £100,000, losing a total of £14 million.

“It’s a scandal as there was no protection – they didn’t warn them what the risks were likely to be.”

David Niven (pictured), partner at Penningtons Manches Cooper which is representing the claimants, explains that NPD was a holding company set up to acquire hotels and care homes which were to be refurbished and sold as individual rooms to investors by way of a long lease.

Buyers would enter into a sub-lease to a management firm who would pay a guaranteed rent with guaranteed buy-back provisions.

Investors paid all the money upfront before getting the lease; but at the time of exchange, the firm didn’t own the hotel in question (main picture), says Niven. They never completed.

Forster has been subject to an FCA investigation when he was previously found to have taken £57 million from 380 investors in an illegal care home investment scheme through Qualia Care Properties Ltd and Qualia Care Developments Ltd.

“The projects amounted to an illegal collective investment scheme, and we would say the same model was being operated in the hotels as well,” Niven tells LandlordZONE.

Bust

“The developer has gone bust so there’s nothing in the estate to pay my claimants any of their losses back, so we’ve had to try and look for another target: the lawyer whose job it was to protect the buyers,” he adds.

“It’s a scandal as there was no protection – they didn’t warn them what the risks were likely to be.”

Although it could take 18 months before the case goes to trial, Niven is confident of their success.

Read the Appeal Court judgement in full.