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Legal claims lost by negligent solicitors - how does the law assess the financial damage?

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Posted by Susan Hopcraft on 24 September 2018

Susan Hopcraft Partner

Legal claims for damages can be lost if they are not brought in time.  Your solicitor should make sure that doesn’t happen, but what if they allow the claim to become time barred and you lose the chance to recover damages? 

You can ask the negligent solicitors to compensate you, but even assuming that the solicitor has no excuse, calculating the financial loss might not be so simple.  If the legal claim had gone ahead you might not have won it…. 

Realistic scenarios

The obvious defences from the negligent solicitor who failed to issue the claim form in time are that the claim would never have succeeded; or even if it had been possible to win some damages in principle, the defendant would never have had any money to actually pay the damages; or it would have settled for very little.  All of these are realistic scenarios by which a solicitor might try to escape liability for their mistake.

The court needs to assess the lost chance of recovering damages in the original case.  The temptation is to try to recreate the underlying lost legal case as if it had not become time barred, a ‘trial within a trial’.  But to use that route to assessing what the outcome would have been could take a lot of court resource and is likely to need to be done some time after it should have happened, meaning that witnesses are less reliable and relevant evidence may be gone.

Raleys solicitors

The difficulty of assessing the value of a lost legal claim is a well-known one.  It has most recently been looked at again in the context of a claim for vibration white finger by a former miner, Mr Perry. 

Mr Perry was advised by his solicitors Raleys to settle his personal injury claim against the DTI for £11,660.  That settlement did not include any damages for ‘services’, which means the loss of his ability to carry out various valuable household activities such as cleaning, gardening, decorating, car washing etc. Properly advised by his solicitor Mr Perry ought to have included in his settlement a claim for those elements, which had a financial value of £17,300.  By the time this part of the claim was remembered he was out of time to bring it.  Mr Perry sued Raleys for their negligent settlement advice and for missing limitation in respect of the services claim.

At trial the judge assessed what would have happened if the claim by Mr Perry against the coal board had gone ahead.  He considered that Mr Perry was capable of the various services tasks, meaning that the underlying claim would have failed and therefore no damages were due from the (admittedly) negligent solicitors. In reality the trial judge considered whether, on the balance of probabilities, Mr Perry’s clam against the coal board would have succeeded. 

The appeal court firmly decided that this was the wrong approach and one which was contrary to a heavy body of judicial authority on these ‘loss of chance’ cases. 

The court must, instead, assess the value of the right that has been lost.  The lost court action is a form of asset that needs to be valued, rather than a live action that ought to be played out. The court must evaluate the chances of success on a percentage basis.  Some of the relevant considerations are the fact that the claimant solicitors were prepared to issue (meaning that they thought the claim had good prospects), the possibility of settlement pre-trial, the availability of witnesses for the underlying trial, and whether there had been very cogent causation defences. 

The appeal

The appeal court reviewed the factual evidence (very unusually) and then adopted the trial judge’s assessment that, had the claim gone ahead, it would have had an 80% chance of success, resulting in a damages award of £14,556. 

This case is being appealed to the Supreme Court where it is hoped further clarification can be provided as to how a court can assess the value of the lost asset without a ‘trial within a trial’ and consideration of at least some of the underlying evidence. After all the appeal court had to review that evidence, meaning there was still to some extent a ‘mini trial’.  Permission to appeal was granted in late 2017 and hopefully the case will come before the Supreme Court very soon now.

About the author

Susan is a disputes and professional negligence lawyer, mainly in the financial services sector.

Susan Hopcraft

Susan is a disputes and professional negligence lawyer, mainly in the financial services sector.

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