Irwin Mitchell: Client could not have got a better outcome, says judge
Irwin Mitchell (IM) has fought off a professional negligence claim, with the High Court finding it had given proper advice and was also entitled to rely on the views of counsel.
Part of the case was that the national firm did not properly advise Corporation Leasing & Finance Ltd (CLF) on settling a professional negligence claim against its previous solicitors.
In a 69-page ruling, Mr Justice Mansfield concluded: “IM and counsel formed realistic and non-negligent opinions that, given the serious evidential weaknesses, the professional negligence claim was very likely to fail.”
As a result, its settlement was “a reasonable one in all the circumstances”.
CLF, which provides invoice discounting credit facility services, instructed IM in September 2016 to take over a case referred to as the ‘order for sale claim’. In it, CLF sought to enforce a charge taken over a property in Surrey four year earlier.
CLF had been represented by another firm of solicitors, called only ‘RPL’ in the ruling, in taking the charge and in the claim. But RPL had withdrawn shortly before trial, citing a conflict of interest.
The trial was adjourned and the case then settled in May 2017, following which RPL pursued a claim against CLF for its unpaid fees and CLF sued RPL for negligence.
Both claims were settled in May 2019, against the background of IM’s advice that it was likely that CLF would lose.
RPL agreed to pay CLF’s costs of the negligence claim, which were agreed at £90,000, while RPL’s claim was dismissed on terms that each side would bear its own costs. Further, RPL forwent its claim to recover outstanding fees of £152,000 and paid back CLF £9,000 it held on account.
CLF alleged that, as a result of the way in which IM advised it and pleaded the claim, it settled at an undervalue or CLF would have succeeded at trial.
Mansfield J comprehensively dismissed this. Given his own misgivings about CPL director Stephen Thornton’s evidence, he said: “I can well understand IM’s and counsel’s view that Mr Thornton would have been a poor witness at trial and that there was a very serious risk that CLF would fail to prove its debt, with serious repercussions.”
The judge held IM was entitled to rely on counsel, “who were properly instructed and gave advice that was not glaringly wrong. Far from it, both Mr Sadiq and Mr Jackson gave advice that was reasonable and sensible…
“I also reject the argument that there was any realistic prospect of achieving a better settlement from RPL, or of achieving a better result at trial. CLF was caused no loss as a result of the advice it was given.”
Indeed, had CLF proceeded to trial, “in all likelihood, the outcome would have been far worse”.
CLF also accused IM of being negligent in settling the order for sale claim by omitting a clause for interest to be payable on the settlement sum.
Mansfield J said that, while in hindsight, “such a term would have been a benefit to CLF”, there was “no reason to think” that the defendants would have agreed to it.
He added: “A deal was struck for a sum to be paid; part of the deal involved transfer of properties. There is no reason to think that the parties did not each price in the risk of delay in completion of transfer and delay in payment of the settlement sum.
“IM was not in a position to drive a harder bargain: at the time the settlement terms were agreed, there was an imminent security for costs application, and trial was only a few weeks ahead. The view of counsel and IM (rightly) was that CLF was likely to lose both the application and the trial.”
CLF had also had “ample time” to consider the settlement and had not raised the interest issue.
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