QUEEN'S BENCH DIVISION
BIRMINGHAM DISTRICT REGISTRY
B e f o r e :
|WEST WALLASEY CAR HIRE LIMITED|
|- and -|
|(1) BERKSON & BERKSON (A FIRM)|
|(2) JOHN PUGH|
Crown Copyright ©
a. The Claimant was, and is, a successful car hire company in Merseyside run by Mr Kenny, its managing director and major shareholder.
b. The First Defendant was, and is, a firm of solicitors nearby in Birkenhead. At the material time, Mr Jones was employed by the firm, initially as a trainee, to conduct its civil litigation but is now running his own practice.
c. The Second Defendant was, and is, a chancery/commercial barrister practising in Liverpool.
a. breach of contract and/or negligence against the solicitors relating to 5 pieces of advice/non-advice on (1) 5th June 2000; (2) 12th July-14th August 2000 and (3) 15th January 2001; and
b. Negligence against the barrister concerning two pieces of advice/non-advice on (1) 2nd June 2000; and between (2) 12th-15th January 2001.
a. failed to spot potential latent flaws in a residual claim for damages in 2000/1 and to recommend acceptance of overgenerous offers of settlement erroneously made by the representatives of the other party to the litigation; and
b. failed to recommend acceptance of such an outstanding final offer when the potential flaws became patent upon exchange of counsel's skeleton arguments on Friday 12th January 2001 before assessment of damages commencing on the following Monday 15th January.
a. First, it must be established that there is a duty of care owed ["Duty"].
b. Second, it must be shown that the duty of care has been breached. This is where the Bolam test is relevant, because falling below the standard of a responsible body of professional men means that person will be considered negligent. ["Breach"].
c. Third it must be shown that there was a causal link between the breach of duty and harm ["Reliance" & "Causation"]; and
d. Fourth, it must be shown that the harm was not too remote ["Reliance & Remoteness"].
"The obligations of a lawyer are, I think, the following: (1) To be skilful and careful; (2) To advise his client on all matters relevant to his retainer, so far as may be reasonably necessary; (3) To protect the interest of his client; (4) To carry out his instructions by all proper means; (5) To consult with his client on all questions of doubt which do not fall within the express or implied discretion left to him; (6) To keep his client informed to such extent as may be necessary, according to the same criteria." [emphasis added as being apposite in this case].
"(1) In general, a solicitor is entitled to rely upon the advice of counsel properly instructed.
(2) For a solicitor without specialist experience in a particular field to rely on counsel's advice is to make normal and proper use of the Bar.
(3) However, he must not do so blindly but must exercise his own independent judgment. If he reasonably thinks counsel's advice is obviously or glaringly wrong, it is his duty to reject it."
"he is not guilty of negligence if he has acted in accordance with a practice accepted as proper by a responsible body of men skilled in that particular art."
a. That which members of the particular profession do in fact achieve ordinarily ; or
b. That which, in the opinion of the court, members of the profession ought to achieve.
"I must say that I doubt the value, or even the admissibility, of this sort of evidence, which seems to be becoming customary in cases of this type. The extent of the legal duty in any given situation must, I think, be a question of law for the court. Clearly, if there is some practice in a particular profession, some accepted standard of conduct which is laid down by a professional institute or sanctioned by common usage, evidence of that can and ought to be received. But evidence which really amounts to no more than an expression of opinion by a particular practitioner of what he thinks that he would have done had he been placed, hypothetically and without the benefit of hindsight, in the position of the defendants, is of little assistance to the court; whilst evidence of the witness' view of what, as a matter of law, the solicitor's duty was in the particular circumstances of the case is, I should have thought, inadmissible, for that is the very question which it is the court's function to decide."
per Oliver J. in Midland Bank Trust Co. Ltd v. Hett, Stubbs & Kemp  1 Ch. 384 at 402B-D.
"A further difficulty that confronts us on this appeal is that in the trial of a claim against a firm of solicitors for damages for professional negligence there is a tradition in this country that the courts do not need expert evidence because judges will be familiar with the standard of care which is reasonably required of lawyers and do not need evidence to help them (see Midland Bank Trust Company Ltd v. Hett Stubbs & Co Kemp  Ch 384, 402B-D, approved and applied by this court in Bown v. Gould and Swayne  PNLR 130). As the practice of the law becomes more and more specialised, the existence of this tradition may give rise on occasion to difficulties."
"Much if not most of a barrister's work involves exercise of judgment - it is in the realm of art not science. Indeed the solicitor normally goes to counsel precisely at the point where, as between possible courses, a choice can only be made on the basis of a judgment, which is fallible and may turn out to be wrong. Thus in the nature of things, an action against a barrister who acts honestly and carefully is very unlikely to succeed."
In Lord Diplock's opinion from 220-221 he said:
"The fact that application of the rules that a barrister must observe may in particular cases call for the exercise of finely balanced judgments upon matters about which different members of the profession might take different views, does not in my view provide sufficient reason for granting absolute immunity from liability at common law. No matter what profession it may be, the common law does not impose on those who practise it any liability for damage resulting from what in the result turn out to have been errors of judgment, unless the error was such as no reasonably well-informed and competent member of that profession could have made. So too the common law makes allowance for the difficulties in the circumstances in which professional judgments have to be made and acted upon".
"If subsequently a barrister is sued by his own client for negligence on what he advised or did in the particular case, he has the protection that the judge before whom the action for negligence against him will be tried is well qualified, without any need of expert evidence, to make allowance for the circumstances in which the impugned decision fell to be made and to differentiate between an error that was so blatant as to amount to negligence and an exercise of judgment which, though in the event it turned out to have been mistaken, was not outside the range of possible courses of action that in the circumstances reasonably competent members of the profession might have chosen to take. [emphasis added]
Lord Salmon said this at 231D:
"The barrister is under no duty to be right; he is only under a duty to exercise reasonable care and competence. Lawyers are often faced with finely balanced problems. Diametrically opposite views may and not infrequently are taken by barristers and indeed by judges, each of whom has exercised reasonable, and sometimes far more than reasonable, care and competence. The fact that one of them turns out to be wrong certainly does not mean that he has been negligent."
"The standard of care to be applied in negligence actions against an advocate is the same as that applicable to any other skilled professional who has to work in an environment where decisions and exercises of judgment have to be made in often difficult and time constrained circumstances. It requires a plaintiff to show that the error was one which no reasonably competent member of the relevant profession would have made. This is an important element of protection against unjustified liabilities."
"What is relevant and material to the public interest is that an industrious and competent practitioner should not be unduly inhibited in making a decision to settle a case by the apprehension that some judge, viewing the matter subsequently, with all the acuity of vision given by hindsight, and from the calm security of the Bench, may tell him that he should have done otherwise. To the decision to settle a lawyer brings all his talents and experience both recollected and existing somewhere below the level of the conscious mind, all his knowledge of the law and its processes. Not least he brings to it his hard-earned knowledge that the trial of a lawsuit is costly, time-consuming and taxing for everyone involved and attended by a host of contingencies, foreseen and unforeseen. Upon all of this he must decide whether he should take what is available by way of settlement, or press on. I can think of few areas where the difficult question of what constitutes negligence, which gives rise to liability, and what at worst constitutes an error of judgment, which does not, is harder to answer. In my view it would be only in the case of some egregious error that negligence would be found."
"Standing back from the mass of detail in this case it is useful to remind oneself that the question is not whether the Appellants' understanding of Mr Fox's complaints against Mr Leech turned out to have been mistaken, it is whether they fell into an "error that was so blatant as to amount to negligence": see Saif Ali at p.221A. If there were any errors on the part of Miss Nickson of Wellers, or Mr Batcup or Mr Susman, and for the reasons set out above I am not persuaded that there were, they could not reasonably be described as "blatant" errors, the kind of errors that no reasonably competent solicitor or barrister would have made. Even if it is too simplistic to expect that a blatant error should "leap out of the page", the need to carry out a minutely detailed reconstruction with the assistance of thousands of documents of events going back over many years before any finding could be made even as to what the error might have been, is perhaps a pointer to the conclusion that if error there was, it was certainly not so blatant as to amount to negligent professional conduct."
" in a system which populates its senior bench from the practising profession, an outside observer might discern equal and opposite risks of excessively sympathetic and excessively critical appraisals of the conduct of legal practitioners. In holding, as this court does, that Underhill J. has erred in the latter of these directions, we ought also to recognise his desire to maintain a high standard of professional trustworthiness. The law does not, however, demand either omniscience or infallibility in lawyers any more than it does in doctors or architects. The law's standard of reasonable competence means not only that there will be errors which are not compensable but that legal advisers are not expected to divine every claim that a client may theoretically have.."
"It would be extremely difficult to define the exact limit by which the skill and diligence which an attorney undertakes to furnish in the conduct of a cause is bounded or to trace precisely the dividing line between the reasonable skill and diligence which appears to satisfy his undertaking, and the crass negligentia or lata culpa mentioned in some of the cases, for which he is undoubtedly responsible. The cases, however, which have been cited and commented on at the bar, appear to establish, in general, that he is liable for the consequences of ignorance or non-observance of the rules of practice of this court; for the want of care in the preparation of the cause for trial; or of the attendance thereon with his witnesses and for the mismanagement of so much of the conduct of a cause as is usually and ordinarily allotted to his department of the profession. Whilst on the other hand, he is not answerable for error of judgment upon points of new occurrence, or of nice or doubtful construction, or of such as are usually entrusted to men in the higher branch of the profession of law"[emphasis added].
" a solicitor does not abdicate his professional liability when he seeks the advice of counsel. He must apply his mind to the advice received. But the more specialist the nature of the advice, the more reasonable is it likely to be for a solicitor to accept it and act upon it." ; and (2) the observations made above about "gross negligence" that is no longer a test in the tort of negligence since at least 1910 upon the case law.
"The circumstances in which barristers and solicitors have to exercise their judgment vary enormously. On the one hand decisions have frequently to be made in court with little time for mature consideration or discussion. That is a situation familiar to any advocate. It is one in which it may be very difficult to categorise the advocate's decision as negligent even if later events proved it to have been wrong. Or in a very complex case it may be that in advising settlement too much weight is given to some factors and not enough to others. Here again a difficult judgment has to be made; and unless the advice was blatantly wrong, i.e. such as no competent and experienced practitioner would give it, [emphasis added as being the appropriate test] it cannot be impugned and the prospects of successfully doing so would seem very slight.
But that is not this case. This was essentially a simple case, though one of great importance for the claimant and her family. It was a case where the advice could be given after careful consideration. It was a case which was typical of many personal injury cases. Where if the claimant's evidence, or that on his or her behalf is accepted, the claim will succeed. If the defendants' account is accepted the claim will either fail or there will be a substantial contributory negligence. Where there is such a conflict it is very difficult, if not impossible at an earlier stage of the case, as this was, to be sure which evidence will be preferred. All that can be done is to point out what I have just said and then make some attempt to evaluate the strengths and weaknesses of the conflicting accounts. It would take very cogent reasons indeed to say that it was overwhelmingly likely that Mrs Grant's account would be preferred and Mr Bailey's rejected, and consequently the claim had no reasonable prospect of success.
On the face of it is surprising result that advice which turns out to be one hundred per cent wrong in such a case was not negligent. The interested layman, or our old friend the officious bystander, might well ask "if the lawyers can be so wrong and they are considered to have acted in a way that competent and experienced lawyers could be expected to advise why do we need lawyers?" I confess that I have listened with increasing amazement and some dismay to the submissions of counsel for the defence that the advice given here complied with the proper standard of care and competence. If that is so the profession should be ashamed that its standards are so low. I do not accept for one moment that this was the sort of advice that competent and experienced solicitors and counsel should have given. The judge thought that it was honestly and carefully given. There has never been any question about the honesty, but I am not at all clear how the judge arrived at the view that it was carefully given if he had correctly applied the law. It is not enough that counsel and solicitors have read the papers and given clear advice which could be understood. In a case such as this logical and sensible reasons have to be given for rejecting the favourable evidence of Mr Bailey. If the reasons do not bear examination they are not such as can be expected from a competent and experienced practitioner."
.Before recording my findings, I would draw attention to two initial points.
.1 First, it is at the heart of Miss Rodway's case that reasonably competent specialist leading counsel and specialist firm of solicitors should have advised that there was no, or no serious, risk of Mr Walker losing on primary liability: and that was so even if the assessment was that Mr Walker would make a very bad witness. That submission would thus connote that not only were Mr Chruszcz and Irwin Mitchell negligent; but also that Mr Makey, Mr Witcomb and previous solicitors acting (and, for that matter, Mr Barker) had themselves also completely misassessed the position: as indeed, by implication, had District Judge Bellamy also.
.2 Second, it is a corollary of Miss Rodway's submissions that correct advice to Mr Walker would have been to the effect that he was in effect bound, or virtually bound, to succeed on primary liability. That gives cause to reflect, as Mr Stuart-Smith and Mr Elkington suggested, on what Mr Walker's reaction and complaints would have been had the case been fought (and I can and do take it that his case would have been properly conducted at trial if it had been fought) and lost before Judge Coles. Of course, Miss Rodway asserts that simply would not have happened. But her stance causes one to bear in mind the words of Judge LJ in Kelley v Corston  QB 686 at p 700 C-F:
"Settlements of litigation are to be encouraged, and as early as possible. Many settlements are advised before litigation is started, and many more cases are settled long before the date of the substantive hearing. Some cases settle a day or two before the hearing, some at the door of the court, and some indeed after the substantive hearing has begun. Yet others settle on appeal. The advice on which settlements are based will reflect many different considerations. For example in one case the advice to settle may arise from the non-availability of a witness in circumstances where the costs of an adjournment would be disproportionate to the value of a claim. In another the settlement of a claim for personal injuries may be woefully inadequate simply because inexperienced counsel has grossly underestimated the value of the claim. In another case, for reasons of his own the client may insist that the case should be settled on the best available terms because there are no circumstances in which he wishes the case to be heard in court. The circumstances are infinite. One specific feature relating to all settlements needs attention. Every lawyer in practice and every judge knows that there is no such thing as the case which is bound to succeed. Experience shows that cases with the brightest prospects of success somehow fail and it is difficult to underestimate the value of the certainty provided by a settlement as opposed to the continuing risks of litigation through to judgment. This factor alone should militate against successful proceedings based on criticism of advice leading to a settlement.'"
"We have to judge negligence by the standards of a solicitor of ordinary competence, the competence, that is, of a typical, reasonably well-informed high street solicitor, just like Mr Zimmer, not the Rolls Royce standards which the big City firms like Jones Day must and do uphold."
"Perfect justice" in one sense involves a tribunal examining every conceivable aspect of a dispute. All relevant witness and all relevant documents need to be considered. And each party must be given a full opportunity of considering everything and challenging anything it wishes. No stone, however small, should remain unturned. Even the adversarial system at its most expensive in this country has not gone that far ..
But a system which sought such "perfect justice" in every case would actually defeat justice. The cost and time involved would make it impossible to decide all but the most vastly funded cases. The cost of nearly every case would be greater than what it is about. Life is too short to investigate everything in that way. So a compromise is made: one makes do with a lesser procedure even though it may result in the justice being rougher. Putting it another way, better justice is achieved by risking a little bit of injustice."
Original claim facts and proceedings
(1) £131,920.52 for sums payable to Global as a result of the failure of Caledonia to honour its obligation to re-purchase the cars.
(2) £8,800 for storage charges.
As an alternative to (1) there was a claim for interest on the re-purchase monies under s.35A of the Supreme Court Act 1981. (1) and the claim for interest are "the relevant claims".
Analysis of the satellite claim
Witness and factual analysis
". . . Faced with a conflict of evidence on an issue substantially effecting the outcome of an action, often knowing that a decision this way or that will have momentous consequences on the parties' lives or fortunes, how can and should the judge set about his task of resolving it? How is he to resolve which witness is honest and which dishonest, which reliable and which unreliable? . . .
The normal first step in resolving issues of primary fact is, I feel sure, to add to what is common ground between the parties (which the pleadings in the action should have identified, but often do not) such facts as are shown to be incontrovertible. In many cases, letters or minutes written well before there was any breath of dispute between the parties may throw a very clear light on their knowledge and intentions at a particular time. In other cases, evidence of tyre marks, debris or where vehicles ended up may be crucial. To attach importance to matters such as these, which are independent of human recollection, is so obvious and standard a practice, and in some cases so inevitable, that no prolonged discussion is called for. It is nonetheless worth bearing in mind, when vexatious conflicts of oral testimony arise, that these fall to be judged against the background not only of what the parties agree to have happened but also of what plainly did happen, even though the parties do not agree.
The most compendious statement known to me of the judicial process involved in assessing the credibility of an oral witness is to be found in the dissenting speech of Lord Pearce in the House of Lords in Onassis v Vergottis  2 Lloyds Rep 403 at p 431. In this he touches on so many of the matters which I wish to mention that I may perhaps be forgiven for citing the relevant passage in full:''Credibility' involves wider problems than mere 'demeanour' which is mostly concerned with whether the witness appears to be telling the truth as he now believes it to be. Credibility covers the following problems. First, is the witness a truthful or untruthful person? Secondly, is he, though a truthful person telling something less than the truth on this issue, or though an untruthful person, telling the truth on this issue? Thirdly, though he is a truthful person telling the truth as he sees it, did he register the intentions of the conversation correctly and, if so has his memory correctly retained them? Also, has his recollection been subsequently altered by unconscious bias or wishful thinking or by over much discussion of it with others? Witnesses, especially those who are emotional, who think that they are morally in the right, tend very easily and unconsciously to conjure up a legal right that did not exist. It is a truism, often used in accident cases, that with every day that passes the memory becomes fainter and the imagination becomes more active. For that reason a witness, however honest, rarely persuades a Judge that his present recollection is preferable to that which was taken down in writing immediately after the accident occurred. Therefore, contemporary documents are always of the utmost importance. And lastly, although the honest witness believes he heard or saw this or that, is it so improbable that it is on balance more likely that he was mistaken? On this point it is essential that the balance of probability is put correctly into the scales in weighing the credibility of a witness. And motive is one aspect of probability. All these problems compendiously are entailed when a Judge assesses the credibility of a witness; they are all part of one judicial process. And in the process contemporary documents and admitted or incontrovertible facts and probabilities must play their proper part.'
Every judge is familiar with cases in which the conflict between the accounts of different witnesses is so gross as to be inexplicable save on the basis that one or some of the witnesses are deliberately giving evidence which they know to be untrue . . . . more often dishonest evidence is likely to be prompted by the hope of gain, the desire to avert blame or criticism, or misplaced loyalty to one or other of the parties. The main tests needed to determine whether a witness is lying or not are, I think, the following, although their relative importance will vary widely form case to case:
(1) the consistency of the witness's evidence with what is agreed, or clearly shown by other evidence, to have occurred;
(2) the internal consistency of the witness's evidence;
(3) consistency with what the witness has said or deposed on other occasions;
(4) the credit of the witness in relation to matters not germane to the litigation;
(5) the demeanour of the witness.
The first three of these tests may in general be regarded as giving a useful pointer to where the truth lies. If a witness's evidence conflicts with what is clearly shown to have occurred, or is internally self-contradictory, or conflicts with what the witness has previously said, it may usually be regarded as suspect. It may only be unreliable, and not dishonest, but the nature of the case may effectively rule out that possibility.
The fourth test is perhaps more arguable. . . ."
(1) 2nd June: Mr Pugh (Barrister)
"If Counsel has any strong views either way, then perhaps he could advise."
(1) said that Mr Kenny should "carefully consider putting in his own Part 36 offer";
(2) asked that the Skeleton Argument he had drafted be sent to Mr Kenny so he could see that "it is not as straight forward as he had imagined" and that he was "anxious to get over to him that the matter was far from straightforward and he was concerned that we would not recover the damages MK was seeking";
(3) offered to be available for a conference "at very short notice if required"; and
(4) when asked if he had a figure in mind for a Part 36 offer said "£100,000 would probably be reasonable".
"The crucial question is whether, on the information available to the defendant when the contract was made, he should or the reasonable man in his position would, have realised that such loss was sufficiently likely to result from the breach of contract to make it proper to hold that the loss flowed naturally from the breach or that loss of that kind should have been within his contemplation."
"The true loss to the Claimant as the result of the Defendant's alleged breach of agreement and the loss which shod be visited upon the Defendant is simply the delay in replacing the Claimant's capital namely the sum of £870,683.12".
(2) 5th June 2000 Berksons (Solicitors)
(3) 12th July 14th August Berksons (Solicitors)
a. On 28th June 2000, the claimant made a Part 36 offer to settle of £100,000 (exclusive of costs) open until 21st July.
b. On 7th July, Mr Marriott of Caledonia's solicitors phoned Mr Jones with an offer of £100,000 (inclusive of costs).
c. On 12th July, Mr Kenny spoke to Mr Jones about the case. The attendance note of Mr Jones (which I accept) states that Mr Kenny said "he was not inclined to reduce the offer by any more. He is confident he will succeed". Mr Jones records his response that he said that "unfortunately in this case there was no middle ground, so either the judge will see it Mike's way and award the full amount of £130,000+ or he will agree with Caledonia and award around £70,000". It goes on to say that "Mike is prepared to take the risk. I did warn him that both me and John Pugh were concerned at the likely outcome the Defendants are confident they are going to win".
d. On 13th July, Mr Jones reiterated Mr Kenny's instructions to Caledonia's solicitors that he would not reduce his offer below £100,000 plus costs.
e. On 19th July, Mr Marriott wrote to Mr Jones reiterating his offer of £100,000 (inclusive of costs) noting that "the area between us will revolve around the court interpreting the rule in Hadley v. Baxendale". "
f. On 14th August, Mr Jones reminded his client, Mr Kenny, of this offer and stated that if Mr Kenny had changed his mind he would see if the offer was still open.
a. First, it would impose on solicitors a duty to retread over old ground incurring irrecoverable unnecessary costs for their clients.
b. Second, it would on many occasions (including this case) provide claimants with an artificial way of evading the provisions of the Limitation Act 1980. In Tesco Stores Ltd v Costain Construction Ltd & Ors  EWHC 1487, TCC, where HHJ Seymour QC held that the cause of action against architects accused of negligent design accrued either on the date the design was completed or (at the latest) the date on which the work in question was inspected and observed that the idea of a continuing duty proposed by the claimant in that case was "a transparent mechanism for delaying artificially the commencement of some period of limitation" (para 270).
(4) 12th 15th January 2001: Mr Pugh (Barrister) and Berksons (Solicitors).
His Honour Judge Simon Brown QC
11th December 2009