Lendy and its legal entity Saving Stream Security Holding Limited (SSSHL) have filed a professional negligence claim against law firm Clarke Willmott at the High Court, Peer2Peer Finance News can reveal.
According to posts on the P2P Independent Forum, Lendy and SSSHL filed the claim against Clarke Willmott, which as one of the law firms on Lendy’s legal panel was thought to have been involved in approving a number of loans on the peer-to-peer property lending platform, before it collapsed in 2019.
Lendy has previously advertised that after a loan passes its first stage it is assessed by one of its law firms. These firms ensure that a legal charge is properly made against each security property, that each of the security properties has good title and that if a borrower grants additional security, such as guarantees and debentures, that these securities are properly executed and enforceable.
Both Lendy and SSSHL are in administration. SSSHL acted as the security trustee on behalf of lenders in relation to any security held in respect of any loan provided via the Lendy platform and was responsible for enforcing any security on behalf of lenders under instruction from Lendy.
Lendy entered into administration in May 2019, leaving more than £160m outstanding on the loanbook, with at least £90m of those funds in default. RSM was appointed the administrator.
The negligence claim was filed by Lendy’s lawyers Shoosmiths.
Read more: Lendy administration heads into third year
“We are aware that a claim has been started against us but it has not been served on us and we do not have full details so are unable to comment other than to say we will respond through the usual court process in due course,” said a spokesperson from Clarke Willmott.
“Unfortunately, I don’t have any further information at this time.”
Shoosmiths declined to comment due to client confidentiality.
In June, the latest progress report from RSM showed that the costs of the administration had surpassed £3m.