Supreme Court overturns law firm negligence decision

Supreme Court: Court of Appeal overturned

The Supreme Court has overturned a Court of Appeal ruling that a negligent law firm should have to compensate its former client for failing to make a claim.

Perry v Raleys Solicitors [2019] UKSC 5 is the latest of a raft of cases involving the controversial but now defunct Barnsley law firm that acted for thousands of miners.

Raleys raked in tens of millions of pounds in fees acting for miners claiming from government compensation schemes, in this case for vibration white finger (VWF).

In 2009, six partners were either suspended or fined by the Solicitors Disciplinary Tribunal for misconduct in the way the firm handled the claims. The firm went into administration in 2016.

Frank Perry, 66, agreed to settle his claim for VWF for £11,660, but he did not make a supplementary claim for services – 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, His Honour Judge 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, describing this as “one of those very rare cases where an appellate court should interfere with the factual conclusions of the trial judge”, the Court of Appeal said the judge was wrong to conduct a ‘trial within a trial’ to determine whether Mr Perry would have succeeded in his services claim.

It awarded him damages of £14,556, plus interest at 8%, on the basis of an 80% prospect of success in the services claim.

Giving the unanimous ruling of the Supreme Court, Lord Briggs said: “For present purposes the courts have developed a clear and common-sense dividing line between those matters which the client must prove, and those which may better be assessed upon the basis of the evaluation of a lost chance.

“To the extent (if at all) that the question whether the client would have been better off depends upon what the client would have done upon receipt of competent advice, this must be proved by the claimant upon the balance of probabilities.

“To the extent that the supposed beneficial outcome depends upon what others would have done, this depends upon a loss of chance evaluation.”

The case law did not begin to establish a principle that it was always wrong for the court to try an issue relevant to causation in a professional negligence case, merely because that same issue would have fallen for determination in the trial of the underlying claim, lost due to the solicitors’ negligence, Lord Briggs said.

This meant that Mr Perry needed to prove that, properly advised by Raleys, he would have made an honest services claim and it was not unfair to subject medical and oral evidence to a forensic analysis on the balance of probabilities standard.

On the facts, Mr Perry had to believe the following to bring an honest claim: (1) before developing
VWF, he had carried out all or some of the six tasks without assistance; (2) after developing VWF, he needed assistance in carrying out all or some of those tasks; and (3) the need for assistance was due to complications from VWF.

Lord Briggs said: “Simple facts of that kind, plainly relevant to the question whether Mr Perry could have brought an honest claim if competently advised, do not in themselves fall within either of those categories of futurity or counter-factuality which have traditionally inclined the court to adopt a loss of a chance type of assessment.”

Accordingly, Judge Saffman had made no legal error in conducting a trial of the issue whether Mr Perry would (or could) have brought an honest claim.

Lord Briggs ruled that the Court of Appeal had also been wrong to find that the judge had required Mr Perry to prove that his claim would have been successful as well – though some of his language may have indicated this, the wider context of his ruling showed that he had not.

He went on to find that the Court of Appeal was wrong to conclude that the judge also went sufficiently wrong in his determination of the facts to enable it to intervene, and ruled that HHJ Saffman’s original decision should be restored.

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