A High Court judge has ruled in favour of dozens of investors who lost money in a failed care home investment scheme which included developments in Morecambe and Blackpool.
The case centred on investments sold in a number of care home projects promoted by the now-collapsed Care Home Group and Carlauren Group, including the Bay View development in Morecambe and a scheme in Queen's Promenade, Blackpool.
Investors brought legal action against property investment intermediary One Touch Solution Ltd, arguing they had been given misleading information about the safety and security of the investments.
After a lengthy trial, the court found One Touch owed investors a duty of care and was liable to almost all of the claimants who brought proceedings.
The judge found the company had presented itself as an experienced property investment adviser which carried out detailed due diligence on developments before recommending them to clients.
However, the court concluded a number of those claims were not supported by the evidence and that investors were not properly informed about significant risks associated with the schemes.
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The judgment examined investments made in developments across the country, including Bay View in Morecambe and the Queen's Promenade project in Blackpool, both of which formed part of the wider care home investment network.
The developments were marketed to investors with promises of fixed returns and buy-back arrangements.
The judge found investors had been reassured about the security of their investments and the due diligence that had supposedly been carried out before properties were offered for sale.
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In the ruling, the court was particularly critical of claims that developments had undergone extensive checks and assessments.
The judge found some due diligence steps described by the company had either not been carried out as claimed or could not be supported by documentary evidence.
The judgment also criticised the firm's record-keeping and disclosure of evidence during the litigation.
Most of the claimants were successful in establishing liability against One Touch, although a small number of claims failed or were prevented from proceeding because of previous settlements through the Property Ombudsman process.
The amount of damages to be awarded to successful claimants will be determined in further proceedings.
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