Raleys ruling “good news for law firms and their insurers”


Bird: Ruling a relief

Yesterday’s Supreme Court ruling on solicitors’ professional negligence is good news for both law firms and their insurers, and should stem the flow of claims about the under-settlement of personal injury claims, experts have said.

Justices overturned a Court of Appeal decision that defunct Barnsley law firm Raleys should have to compensate its former client for failing to make a claim.

Jeremy Riley, a member of the Forum of Insurance Lawyers and head of professional risk at Kennedys, said the ruling was “welcome news” for the solicitors’ professional indemnity insurance market and professionals generally.

The central issue in the case was how the courts should approach assessing ‘loss of chance’ claims.

Mr Riley said: “The Supreme Court has taken a refreshingly modern approach to this and also gone some way to stem the flow of claims for alleged under-settlement of personal injury claims.

“What this judgment means is that retrospective analysis of long-since-settled injury claims may still continue, and result in negligence claims against the solicitors who advised on the original settlement.

“However, if a mistake has been made on a relatively minor issue, such as raising the issue of the cost of care, or services before settlement, then any such claim will be rightly scrutinised through the same retrospective lens.”

Nick Bird, partner at City firm RPC, added: “This decision will be a relief to law firms and their professional indemnity insurers.

“Had the court ruled in favour of the claimant, it may have opened up a new category of professional negligence claims against professionals.”

“The court agreed with the lawyers’ argument that the claimant would have had no success in a further claim that that may have awarded him more money. It held that the claimant had to be in a position to show that the claim could have been brought honestly and the claimant had failed to do so.

“The Supreme Court has sent out a strong message and has corrected the tendencies of some of the lower courts to apply the existing law in favour of claimants.”

Esther Millard, senior associate at Surrey law firm Barlow Robbins, said that loss of chance claims against lawyers tended to benefit claimants whose original claims were weak.

“Even if they would probably have lost their original claim, they can nevertheless succeed against their negligent solicitors, so long as they can show that their original claim had at least a real and not just a fanciful chance of succeeding.

“Today’s decision reaffirms the limits of the application of the loss of a chance formula, and is also a good example of the limits of the tendency of such claims to favour a claimant whose original claim was weak.”

Ross Baker, a partner at BLM, which acted for Raleys, said: “As well as underscoring the general point that the court simply has no business rewarding dishonest claimants, the judgment is a welcome restating of the principles in lost opportunity cases…

“We are pleased it makes it clear that, when the court is looking at causation, it is right that this is exposed to a rigorous examination of the whole body of available evidence.”

He explained that just because Mr Perry’s credibility would have been an issue in the evaluation of the potential success of his claim did not mean that it could not come under detailed scrutiny for the purposes of the case on causation.

“Together with restating that the burden of proof is on the claimant, the judgment goes some way to the pendulum swinging rather more to the centre in the handling of lost opportunity claims.

“Concerns still remain as to the evaluation of the lost chance (here the potential success of a services claim if made) and the approach to the evidence there where the court has said that it is all about prospects rather than there being a trial within a trial.

“That remains an area of challenge for those who seek to fairly defend these claims.”

Yesterday’s Supreme Court ruling on solicitors’ professional negligence is good news for both law firms and their insurers, experts have said.

Justices overturned a Court of Appeal ruling that defunct Barnsley law firm Raleys should have to compensate its former client for failing to make a claim.

Jeremy Riley, a member of the Forum of Insurance Lawyers and head of professional risk at Kennedys, said the ruling was “welcome news” for the solicitors’ professional indemnity insurance market and professionals generally.

The central issue in the case was how the courts should approach assessing ‘loss of chance’ claims.

Mr Riley said: “The Supreme Court has taken a refreshingly modern approach to this and also gone some way to stem the flow of claims for alleged under settlement of personal injury claims.

“What this judgment means is that retrospective analysis of long-since-settled injury claims may still continue, and result in negligence claims against the solicitors who advised on the original settlement.

“However, if a mistake has been made on a relatively minor issue, such as raising the issue of the cost of care, or services before settlement, then any such claim will be rightly scrutinised through the same retrospective lens.”

Nick Bird, partner at City firm RPC, added: “This decision will be a relief to law firms and their professional indemnity insurers.

“Had the court ruled in favour of the claimant, it may have opened up a new category of professional negligence claims against professionals.”

“The court agreed with the lawyers’ argument that the claimant would have had no success in a further claim that that may have awarded him more money. It held that the claimant had to be in a position to show that the claim could have been brought honestly and the claimant had failed to do so.

“The Supreme Court has sent out a strong message and has corrected the tendencies of some of the lower courts to apply the existing law in favour of claimants.”
Esther Millard, senior associate at Surrey law firm Barlow Robbins, said that loss of chance claims against lawyers tended to benefit claimants whose original claims were weak: “Even if they would probably have lost their original claim, they can nevertheless succeed against their negligent solicitors, so long as they can show that their original claim had at least a real and not just a fanciful chance of succeeding.

“Today’s decision reaffirms the limits of the application of the loss of a chance formula, and is also a good example of the limits of the tendency of such claims to favour a claimant whose original claim was weak.”

Ross Baker, a partner at BLM, which acted for Raleys, said: “As well as underscoring the general point that the court simply has no business rewarding dishonest claimants, the judgment is a welcome restating of the principles in lost opportunity cases…

“We are pleased it makes it clear that, when the court is looking at causation, it is right that this is exposed to a rigorous examination of the whole body of available evidence.”

He explained that just because Mr Perry’s credibility would have been an issue in the evaluation of the potential success of his claim did not mean that it could not come under detailed scrutiny for the purposes of the case on causation.

“Together with restating that the burden of proof is on the claimant, the judgment goes some way to the pendulum swinging rather more to the centre in the handling of lost opportunity claims.

“Concerns still remain as to the evaluation of the lost chance (here the potential success of a services claim if made) and the approach to the evidence there where the court has said that it is all about prospects rather than there being a trial within a trial.

“That remains an area of challenge for those who seek to fairly defend these claims.”




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