Land Securities’ was not entitled to £17m in damages from Fladgate Fielder in a row over a West End office development, a High Court judge ruled today.

The UK’s largest developer sued the law firm for allegedly misusing the judicial review process as ‘an instrument of extortion’ to obtain a ‘collateral benefit.’

However Judge Bernard Livesey QC said in a judgement today that Fladgate Fielder was entitled to use the judicial review process to protect its interest in its headquarters opposite Land Securities’ Park House development on Oxford Street.

Judge Livesey said: ‘Because, in my judgement, the claimants do not have a realistic prospect of proving that Fladgate’s predominant purpose in threatening and using the judicial review proceedings was either collateral in the true sense or improper, it will follow that the claim will inevitably fail.’

Fladgate Fielder said it would face ‘three years of hell’ from the 316,000 sq ft development which could reduce the company’s turnover by as much as 25%.

It also said it was planning to move officers, and that the development would impact on the marketability of its lease.

However the court heard that Mike Hussey, director of Land Securities’ London portfolio, suggested in a witness statement that Fladgate fielder ‘plainly had in mind’ the possibility of getting a financial ‘windfall’ because of it’s negotiating position with the developer.

Hussey said: ‘I believe that when they discovered that Land Securities were applying for planning permission to redevelop Park House in February 2006, Fladgate Fielder saw an opportunity to us the possibility of judicial review to force us to the negotiating table, with a view to assisting them to implement their plans by financial payment.

Land Securities can now appeal the decision.