Professional Negligence: Claims Against Solicitors

February 1, 2017

Seery v Leathes Prior (a firm)

[2017] EWHC 80 (QB) (24 January 2017)There are a number of reasons to instruct a solicitor in regards to a potential claim against someone else.  With a law firm you get advice from people who have undertaken a lot of litigation and appreciate and understand how a claim will be treated by a Court.  You get advice on what aspects of a claim should or should not be argued.  A good example of this is in regards to claims against banks.  Almost everyone wants to plead fraud.  It is an almost universal claim a bank customer will want to argue.  An experienced solicitor will stop you doing this except for the very tiny fraction of cases that actually can be evidenced.  Judges get very angry if you plead fraud when there is no actual evidence of it even if it looks like fraud.

Most of all, with a solicitor you have a sounding board who will advise you generally.  It is not well known, but a quality, experienced solicitor will advise you not to sue someone or a company if you cannot withstand litigation.  Commercial litigation can be very stressful.  It can even, at times, be brutal.  If you cannot withstand such stresses, then litigation is almost certainly something you should avoid if you can.  An experienced solicitor will be able to advise you and guide you on this.  A less experienced solicitor, or a solicitor of lower quality, may not.

In the case of Seery v Leathes Prior (“LP”) (a firm) [2017] EWHC 80 (QB) (see HERE) the claimant had sued his two former shareholder colleagues.  He claimed they had excluded him from the management of their company.  He approached one firm, and then went to LP when he moved house and into an area near LP’s offices.  LP advised that a negotiated settlement was best.  A settlement was reached and the claimant was paid £317,000 plus £7,000 towards legal fees.

Mr Seery decided after the settlement was concluded that his claim was in fact worth £1 million and launched a claim against LP, arguing that he ought to have been advised to litigate, wherein he would have successfully been offered £1 million by a Court.  He therefore alleged professional negligence against the law firm and the Partner that he instructed.

The claim brought against LP is a bit contradictory.  The claimant argued that he was so stressed that he could not take in advice that had been given to him, most of which was in writing.  He claims not to have told LP or the partner that he was that stressed or that he was not understanding their advice.  He claimed that had he been encouraged he would have chosen litigation as an option.

The claim was rejected by the Court.  The Judge, Sir David Eady, sitting as a High Court Judge, ruled that the Defendant was right to advise against litigation, as clearly, being this stressed, the Claimant would not have been able to cope with the pressures of commercial litigation.

The Claimant had only invested £24,000 in the company and, it appears from the judgment, was unable to articulate precisely how much his shares were worth, at one stage calling them worthless (para 16 & 20).  He at one stage valued the shares at £16,000 (20% of a company value of £80,000: paragraph 20).

The Partner in LP considered all of the circumstances and advised not to take a risk by litigation (a “risky strategy” paragraph 31).  In addition to the advice not to litigate, it was also apparent that the claimant could not afford to litigate (paragraph 38).  On litigating, at paragraph 40, the Judge confirms: “the Claimant appeared to accept [on cross examination] that he would not have been interested, at least by that time, in spending money on litigation.”

For all of the above reasons and because of the stress (see paragraphs 44 to 46), the Judge found that LP and the Partner at LP had acted correctly throughout, and found in favour on all points in favour of the defendant.  At paragraph 66 the Judge says:

I am not persuaded, therefore, that there was any breach of duty on Mr Chapman’s part, or on that of the Defendant firm. Indeed, it seems to me that the Claimant received a very good service from them in the difficult circumstances in which he found himself.

What Is Professional Negligence By A Solicitor?

 Professional negligence has a standard definition.  It is simply that a professional owes a duty to someone (in this case a client through the retainer agreement) and fails to act in a way that a reasonable solicitor would act in those circumstances, causing loss.

In the above case the Claimant is alleging, at its core, that a reasonably well experienced partner in a quality reputable law firm would be expected to advise a person in the claimant’s position to consider litigation.  He therefore claims it was negligent of the partner (and thus the law firm) to have advised him not to litigate and as a consequence he lost over £600,000 to which he believed he was owed to settle his claim.

There are, at present, quite a number of professional negligence claims being issued by bank customers who went through the FCA led review into the historic sale of IRHPs against the law firms that represented them in the Review.  They are alleging that the law firms that represented them failed to get an offer that they (the client) deemed their claim to be worth.  Muldoon Britton is currently involved in such a claim in regards to a barrister.

Professional Negligence claims can be difficult.  It is for the Claimant to prove and evidence their case.  Defendants can evidence their claim, but are not required to.  A claimant is required to evidence their claim.  Proving what a “reasonable professional” would have done in similar circumstances can be difficult.

As noted in the above case, the Defendant law firm LP had written communications from the Claimant saying his shares were valueless.  Therefore, alleging that his claim was actually worth £1 million seems to be stretching things.

Professional Negligence is not getting it wrong.  Certainly, if a professional gets their role wrong then that may be negligent.  But professional negligence looks at the whole picture.  In the above case the Partner had described the claim as an employment claim, when clearly it was a company law case.  But no loss flows from that failure, and so it is not a recoverable negligent act/statement.  Loss and/or damage has to be sustained.

No matter who you instruct you are entitled to expect the best service.  You are expected to be offered an experienced solicitor if you instruct a law firm that advertises a particular service.  The law is vast.  I am an experienced commercial litigator.  I would not know what to do if I was asked to go to a police station and sit with someone being questioned for murder.  I did pass exams in that at University, and I am sure I would be capable of protecting the basic rights of someone, but the nuanced and important issues such as how a police officer is allowed to question someone – nope.  I would not know; except that the person who is being questioned is entitled to remain silent.  The same goes for commercial litigation.  Knowing what a claim is, what constitutes the various aspects of a case, what goes against a case, and what issues have arisen in the last 20 similar cases all make me very capable of having a ½ hour call with a client and knowing that I would ask just the right questions to get an idea of their case.  I can read a thousand pages of emails and know that I will home in on the right evidence that helps or damages our case.  A criminal law specialist would not.

So when you instruct a law firm if you do not get the right service and if you suffer loss, it is possible to ask the law firm to correct this.  I am currently involved in a professional negligence claim against a law firm in which the solicitor acting for my client misunderstood the law involving insurance companies and advised that the limitation date (the last date at which you should issue a claim) was more than one year after the actual date.  My client lost his claim against the insurer as a result and suffered loss as a result.  I have an IRHP claim in which the barrister, the night after his chamber’s Christmas party, advised that the limitation date after the termination of a standstill agreement was 18 months after the actual date and my client lost his claim against the bank as a result of that advice.

If you have used a professional – a solicitor, barrister, legal executive, accountant, advisor or similar and they failed to deal with you appropriately and you have suffered a loss as a result, then you should speak to Muldoon Britton today.

Muldoon Britton is a niche litigation only law firm.  We do not undertake any other form of work other than litigation.  We have offices in New York, Manchester and Dublin.  We have a particular specialism in professional negligence cases and claims against banks.  For a no obligations discussion, please call 0161 826 6922.

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