The Supreme Court is to review what needs to be proved when a solicitor is sued for failing to advise a client of a potential claim, in the latest of a raft of cases involving Raleys, the controversial but now defunct Barnsley law firm that acted for thousands on miners.
The Court of Appeal had overturned a lower-court ruling that Raleys should not have to compensate a miner who argued that its admitted negligence had caused him to settle a claim at an undervalue.
Ordering Raleys instead to pay £15,000, the appeal court said the rationale behind the ruling of His Honour Judge Saffman in Leeds would have made it “far too easy for negligent solicitors, or, perhaps more pertinently, their insurers, to raise huge obstacles to claimants” in cases such as this.
The Supreme Court announced last week that it has agreed to hear a further appeal on two grounds:
- Where a solicitor negligently fails to advise a client of a potential claim against a third party, and where that client then brings a claim against the solicitor, seeking damages for the lost opportunity to pursue the former claim: must the client prove, on the balance of probabilities, that the former claim would have been an honest claim?
- In which circumstances should an appellate court interfere with a trial judge’s findings of fact?
Raleys was well known for its work for miners claiming compensation, raking in tens of millions of pounds in fees in the process. In 2009, six partners were either suspended or fined by the Solicitors Disciplinary Tribunal (SDT) in 2009 for misconduct in the way the firm handled the claims. The firm went into administration last year.
In the case, Frank Perry, 66, agreed to settle his claims for vibration white finger (VWF) claim for £11,660, but did not make a claim for services under the government scheme for miners’ compensation – six everyday tasks that he could not carry out without assistance because of his injury. Several years later, he sued Raleys for £17,300 for not pursuing it.
Raleys initially defended the case aggressively but admitted its negligence two days before trial. At first instance in 2015, HHJ Saffman found that Mr Perry had not proved that its negligence caused him to settle his claim at an undervalue.
He concluded that Mr Perry had not established that he “honestly” met the “factual matrix” for making a claim for services. The judge did not accept that Mr Perry could not perform unaided the tasks which he did carry out unaided before the onset of VWF.
However, giving the unanimous ruling of the Court of Appeal, Lady Justice Gloster said this was “one of those very rare cases where an appellate court should interfere with the factual conclusions of the trial judge”.
She explained: “In my judgment, the judge was wholly wrong, both as a matter of principle and in the particular circumstances of this case, to have engaged in the kind of factual determination which he did as to whether, on the balance of probabilities, Mr Perry could have brought an ‘honest’ services claim.
“In reality the judge carried out a determination on the balance of probabilities as to whether Mr Perry would have succeeded in his services claim against the [government].”
Gloster LJ said there were “sound public policy reasons” behind her decision: “It is far too easy for negligent solicitors, or, perhaps more pertinently, their insurers, to raise huge obstacles to claimants such as Mr Perry from pursuing their claims, if the latter are required, effectively, to prove in the litigation against solicitors that they would have succeeded in making such a claim against the third party.
“Raleys’ defence in the present case is an unfortunate exemplar of insurers putting the claimant to proof of every issue in the underlying claim. Such an approach is intellectually unsound; it requires the court, inevitably many years later, to investigate whether a claimant, who as here, may be unsophisticated and not have kept records, to prove what he would have done many years earlier.
“In cases of admitted or proven negligence, on the part of solicitors or other professionals, that should not be the correct approach. Nor, in my view, do the authorities support it.”
The Court of Appeal awarded Mr Perry damages of £14,556, plus interest at 8%, on the basis of an 80% prospect of success in the services claim. Raleys’ professional indemnity insurance was picking up the tab.