Representing British Motoring Association the AA in a £60m claim

Our client, the AA, was sued by former shareholders in Motoriety (UK) Limited in relation to a failed joint venture. The claimants sought damages of around £60m for alleged fraudulent or negligent misrepresentation and/or for breach of contract, arguing that because of certain alleged misrepresentations, they forewent another potential investment in Motoriety from a competing company.  

Approach

Our client denied the substance of the allegations against it. We also identified for it a complete defence in that the loss alleged by the claimants was reflective of loss that would have been suffered by Motoriety and was therefore not recoverable by the claimants as shareholders in Motoriety as a matter of law. 

RPC Partner Charlotte Henschen and Senior Associate Alexandra Shearer applied to have the claim struck out at a preliminary stage on the basis that the reflective loss principle barred the shareholders from recovering the losses claimed.

Outcome

The High Court granted the strike-out application.  the claimants appealed, and the Court of Appeal upheld the strike out, holding that the claim was barred in its entirety by the reflective loss principle, which could be seen to be applicable at a preliminary stage without the matter going to trial.   

Impact

Our client was awarded the costs of the original strike out application, the costs of the underlying action and the costs of the appeal, and avoided having to engage with the substantive proceedings.