Kernel Capital, a venture capital funder based in Cork, has recently filed a lawsuit against one of Ireland’s largest law firms William Fry, citing negligence and breach of contract as the chief complaints. The law firm’s 56 partners are being accused of mishandling investments and dispensing bad advice to clients.
Kernel Capital is suing William Fry for around €2 million in damages, claiming they lost that amount after being advised by the law firm to make a bad investment. The investment being referred to is a deal made back in 2006, where Kernel Capital were advised to make a €1.25 investment in Ely Medical Group. When difficulties arose in Ely, Kernel loaned the Group a further €2.45 million and later, a €1.2 million loan, on the back of legal advice from William Fry.
Kernel believed these loans were secured against Ely Medical Group, relying on William Fry to properly execute the deal. It later emerged there was no loan agreement in place for at least one of the amounts, despite the law firm insisting throughout that the loan was enforceable.
Kernel Capital is suing William Fry for the entire sum they have lost, as well as litigation costs, fees and loss of interest on the loans. The law firm has denied the allegations, insisting they will defend their actions fully in court. Such a large law firm as William Fry is bound to have a comprehensive professional indemnity policy in place, but the firm’s partners will not want to make a claim if they can avoid it.