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Court of Appeal determines approach for deciding loss where litigation solicitors miss second claim

Where solicitors have negligently failed to advise a client to pursue a particular claim, they will be deemed to have caused loss if their client can show that it would have brought the claim if so advised, and that it would have had a real prospect of success, the Court of Appeal has said.16 May 2017

The client does not have to show that the claim would have actually succeeded, the court said

The court was ruling on a case between a former miner, Frank Perry, and a firm of solicitors called Raleys. Perry had instructed Raleys to pursue a claim for damages against his employer on his behalf after developing a form of hand arm vibration syndrome though the use of vibratory tools. Perry had been employed by the National Coal Board, which later became the British Coal Corporation.

With Raley's assistance, Perry claimed for compensation against his former employers and agreed to settle his claim for £11,600 in 1999.

Raley's did not, however, advise Perry to claim for personal injury under a compensation scheme set up by the Department for Trade and Industry (DTI) to take responsibility for miners exposed to vibration while working for the National Coal Board and British Coal Corporation.

Perry later issued proceedings against Raleys saying it had been negligent in failing to advise him to claim under this scheme. Perry claimed damages of £17,300 plus interest, representing what he would otherwise have obtained in a successful claim under the DTI scheme. This was based on everyday tasks that he could not now perform, namely gardening, window cleaning, DIY, decorating, car washing and car maintenance.

The judge at first instance agreed that if Perry had received the advice he would have brought the additional claim, but concluded that the claim would have failed based on other conditions that he suffered, including a back condition.  

The Court of Appeal has now overturned this, saying that the judge was wrong to have conducted a "trial within a trial" to determine whether the lost claim would have succeeded. The relevant questions were whether Perry would have made the claim if advised correctly and his prospects of success, and damages should then have been awarded accordingly. 

"The judge either misunderstood or misapplied the test of causation in considering whether Mr Perry had lost a real chance of succeeding on a services claim. Effectively, he conducted a trial of what would have been the underlying claim against the DTI, had it refused to accept a services claim by Mr Perry under the scheme," the Court of Appeal judgment said.

Determining the issue involved two separate questions, the judgment said: whether Perry would have acted differently if he had been properly advised, and what the prospect of success was.

The judge wrongly combined the two questions, the Court of Appeal said, and this led him to consider that in order to prove causation Perry had to prove that, on the balance of probabilities, he would have made a successful claim if he had been properly advised.

This is "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 Court of Appeal also said there "are sound public policy reasons for such an approach. 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".

Damages were set at £14,556.15 plus interest from December 2006.

Professional negligence expert Michael Fletcher of Pinsent Masons, the law firm behind Out-Law.com, said: "This makes sense. If a claim would have had only 40% chance of success, then the first instance ruling would have been that the claim would have failed and therefore no loss had been caused. However, a claim with a chance of success which is real, but low, still has value because it could succeed, including negotiating value. The Court of Appeal recognised this. Indeed the judges' comments on the policy reasons for their decision show an intention to allow claimants a route to recovery in such circumstances".

"This is a welcome ruling for claimants considering claims against solicitors for mishandling litigation. If a claim with some prospects of success was not made, due to negligent advice, claimants can expect their professional negligence claim to have value," Fletcher said.