Law firm found liable for partner’s role in £2.4m investor fraud

The High Court has found Portner Law LLP vicariously liable for the dishonest assistance of one of its partners in the misappropriation of more than £2.3 million of investor funds belonging to Grosvenor Property Developers Ltd, a failed Bristol student accommodation venture now in liquidation.

The funds—fraudulently diverted by the company’s directors, Jonathan England and Sanjiv Varma—were channelled through Portner’s client account and used in a series of London property transactions, including the purchase of flats on Hallam Street and Green Street, and a £2 million loan for a project on Charles Street.

Deputy Judge Saira Salimi held that partner Daniel Broughton, then Portner’s deputy anti–money laundering officer, had acted with “blind-eye dishonesty” by ignoring obvious red flags and repeatedly failing to verify the source of funds despite clear warning signs. The Court ruled that an “honest solicitor” would have questioned transactions involving third-party payments, misleading statements to lenders, and circular funding between companies controlled by the same individuals. While negligence alone was insufficient, the repeated and deliberate disregard for professional obligations met the threshold for dishonesty under Royal Brunei Airlines v Tan and Ivey v Genting Casinos.

Portner Law was found to be vicariously liable for Broughton’s dishonest assistance, but quantum was left for further determination, with the Court directing that appropriate credits be applied for sums already recovered in the liquidation.

Read the decision here.

Rory Brown of South Square and Andrew Shipley of Selborne Chambers (instructed by Gunnercooke) represented Grosvenor Property Developers, while Amanda Savage KC and Isabel Barter of 4 New Square Chambers (instructed by Mills & Reeve) acted for Portner Law.