A legal helpline adviser at Irwin Mitchell (IM) was not under a duty to advise a prospective client of steps she needed to take to protect her position, the Court of Appeal has ruled.
Lady Justice Andrews held that the adviser’s decision to explain limitation to the caller did not mean she was required to provide further advice.
Carole Miller suffered an accident during a holiday to Turkey in May 2014, which led to her leg being amputated above the knee 18 months later. The holiday was booked with an online travel agency called Lowcostholidays.
She argued that her accident was attributable to the hotel’s breach of local standards, and thus Lowcost was in breach of contract.
She initially contacted IM on 19 May 2014 after seeing a television advert but a retainer was not signed until January 2016.
Lowcost’s insurer, HCC International, declined to indemnify Lowcost on the ground that it had failed to notify HCC of the accident until March 2016. This put Lowcost in breach of a condition precedent of its policy.
Lowcost then went into administration. With counsel instructed by IM agreeing that HCC was entitled to decline cover, IM told Mrs Miller that there was “no viable source of compensation for your claim and we will be unable to proceed with it”.
Mrs Miller then sued IM for the lost opportunity of bringing her claim on the basis that failing to advise her to notify Lowcost, and failing to do so itself – which would have led Lowcost to notify HCC – was in breach of its duty to her.
At first instance, His Honour Judge Cadwallader held that no retainer was formed during the 20 months in which IM waited for information from Mrs Miller and investigated her potential claim, and it was not under a duty to advise her to notify Lowcost about the accident until then.
The main argument on appeal was that because the helpline adviser, Victoria Halliwell, chose to inform Mrs Miller that the limitation period for bringing a claim was three years, she assumed a duty to advise Mrs Miller to take reasonable steps that were open to her to protect her position and so should have told her to notify the tour operator of the accident.
Andrews LJ said: “I accept that, in theory, circumstances could arise in which (irrespective of anything said about the limitation period) a solicitor might come under a duty to advise a prospective client to take an obligatory legal step to keep their claim alive, of which the solicitor is aware and the person seeking their advice may not be.
“Indeed, a situation could arise in which it would be at least strongly arguable that a solicitor became obliged to give advice about the limitation period to someone who rang a legal helpline of this type, even if the solicitor would not otherwise generally be required to give such advice.”
But here Mrs Miller had no legal obligation to tell the tour operator about the accident. “Further, such notification had no bearing on the question whether Mrs Miller had a legal basis for bringing a claim against anyone for the personal injuries she sustained in the accident, which was quintessentially what she was ringing the helpline to ascertain.
“There were no other steps Mrs Miller needed to take in order to preserve her right of action against the tour operator (or anyone else).”
Though Ms Halliwell “took it upon herself to offer high-level preliminary advice about the ingredients of a claim in negligence”, and specifically about limitation, “she did not thereby take it upon herself to give wider-ranging advice to Mrs Miller about any steps she might reasonably take to ‘protect her position’ before she issued proceedings; nor would it have been reasonable for Mrs Miller to have relied on her to give such advice or to have thought she was doing so”.
Andrews LJ added: “In general, a solicitor is not obliged to advise even a client with whom there is a formal contractual relationship to take steps to safeguard against the risk of unenforceability of a judgment due to the insolvency or impecuniosity of the other party to actual or prospective litigation, unless he is specifically put on notice that they are in financial difficulties.”
A relevant consideration was also that, in May 2014, it looked like a much smaller claim than it turned out to be.
A solicitor in the position of Irwin Mitchell “had no particular reason to expect the quantum to be much more than whatever the tour operator was likely to have to pay from its own resources under its insurance policy”.
This meant that the risk Lowcost’s insurer might refuse cover of a notification failure was “not something which ought to have been, nor would it have been, a matter of such concern that a reasonable solicitor would have felt compelled to tell Mrs Miller to notify the travel operator immediately, in order that it could notify its insurer”.
The judge also rejected the characterisation of what Ms Halliwell said about the limitation period “as providing some kind of reassurance to Mrs Miller that there were no other steps she needed to take to protect her position”. This was preliminary general advice, she said.
Even if she were wrong on that, it remained the case that there were no other steps Mrs Miller needed to take on 19 May 2014 to preserve her right to make a claim against Lowcost.
Andrews LJ, with Lord Justice Phillips and Lady Justice Falk concurring, dismissed the appeal.