CHESHIRE Building Society was successful in its legal claim against professional advisers in relation to an external fraud worth millions of pounds.
The judge in the society’s legal case handed down a summary judgement in deceit against property valuers Dunlop Haywards Limited and ordered the firm to make an interim payment of £10m to the society.
The judgement follows the discovery of a suspected external fraud as the society’s 2005 accounts were being signed off. A £10m exceptional item provision had to be made which plunged the society into the red.
The society then began preparing its legal case in a bid to recover the money.
Commenting on the judgement, Cheshire Building Society’s chief executive officer Karen McCormick said: “We are very pleased to have such a clear outcome in our claim against Dunlop Haywards for deceit. This is good news for the society and confirms the strength of our case.”
The 137-year-old building society is among a number of lenders believed to have been hit by property frauds in the financial services sector.
The suspected fraud was discovered while the year end accounts for 2005 were compiled.
The balance sheet showed losses of £2.1m but Ms McCormick told The Chronicle this belied the underlying strength of the business which has £4.7 billion assets.
The legal action arose from an alleged over-valuation of a property.
The Cheshire, which has 29 branches in the county, is understood to be still pursuing a case against Manchester law firm Cobbetts over the matter.