Accountant wins ‘IVA Council’ claim

Insolvency practitioner obtains apology and damages over mis-selling allegations

David Mond, a chartered accountant and insolvency practitioner, his firm Hodgsons Chartered Accountants and his company ClearDebt Ltd have received an apology and a substantial sum by way of damages and costs under the terms of a settlement reached on 21 November 2008.

The Claimants had sued for libel, malicious falsehood and causing loss by unlawful means in respect of letters sent to their clients by an entity known as ‘the IVA Council’ (IVAC). The letters alleged that the Claimants had repeatedly mis-sold Individual Voluntary Arrangements (IVAs) to their clients and were running an ‘IVA factory’.

In a written apology the Defendants have admitted that the allegations complained of were entirely unfounded and accepted that various claims made about the nature and status of the IVAC were false.

The case has an interesting interlocutory history. In June of this year Sir Charles Gray continued a freezing order in the sum of £100,000 granted without notice (principally to cover the Claimants’ likely costs to trial) against three of the Defendants, but discharged an interim libel injunction. On 4 November 2008, Eady J granted a further freezing order in the increased sum of £250,000 at a further without notice hearing: this time the cause of action relied on was a new claim under s.423 of the Insolvency Act 1986 (transactions entered into at an undervalue to the prejudice of creditors) on the basis that the initial defendants had allegedly transferred income received from the operation of the IVAC to various third parties, all of whom were added as defendants to the claim. Eady J continued the injunction at an inter partes hearing on 11 and 12 November 2008, and directed a further hearing at which the individual defendants were to be cross-examined on their evidence as to assets. The case settled last week prior to that hearing.

5RB’s Justin Rushbrooke and Richard Munden (instructed by Halliwells) acted for the Claimants, while Adam Speker (instructed by Coles Miller) acted for the Second Defendant, Shane Mulroy, at an earlier stage of the proceedings.

The Claimants also engaged the services of Dr Laurence Godfrey, a computer expert, who provided significant evidence based on IP addresses and tracking information produced by embedded web ‘beacons’ as to the origin and destination of emails sent and received by the IVAC, amongst others.