West Wallasey Car Hire Ltd v Berkson & Berkson and Pugh

JurisdictionEngland & Wales
CourtQueen's Bench Division (Administrative Court)
JudgeHis Honour Judge Simon Brown QC
Judgment Date11 Dec 2009
Neutral Citation[2009] EWHC 3454 (Admin)
Docket NumberCLAIM NO: 8BM40026

[2009] EWHC 3454 (Admin)

IN THE HIGH COURT OF JUSTICE

QUEEN's BENCH DIVISION

MERCANTILE COURT

BIRMINGHAM DISTRICT REGISTRY

His Honour Judge Simon Brown Qc

CLAIM NO: 8BM40026

Between
West Wallasey Car Hire Limited
Claimant
and
(1) Berkson & Berkson (a Firm)
Defendants
(2) John Pugh

Introduction

1

This is a professional negligence action by a company against its former lawyers concerning litigation settlement advice 9 years ago.

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.

2

The claim form was issued on 8 th August 2006. Despite the pleadings, it was agreed before final submissions that it claims:

a. breach of contract and/or negligence against the solicitors relating to 5 pieces of advice/non-advice on (1) 5 th June 2000; (2) 12 th July-14 th August 2000 and (3) 15 th January 2001; and

b. Negligence against the barrister concerning two pieces of advice/non-advice on (1) 2nd June 2000; and between (2) 12 th-15 th January 2001.

3

The delay in bringing this “satellite” or “meta litigation” (i.e. litigation about litigation) itself raises difficult problems of limitation, relevant standards of current practice (the current civil procedure rules were in their infancy in 2000/2001), costs and judicial assessment of witnesses in their recollection of insignificant events in their business lives at the time but of minute trial scrutiny and apparent significance to its outcome.

4

The claim is most unusual, if not unique. In essence, it claims that both solicitors and barrister:

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 12 th January 2001 before assessment of damages commencing on the following Monday 15 th January.

5

In summary what had occurred was this. Between February and April 1999 Caledonia had refused to honour its obligation to re-purchase over 70 cars at a total price of £870,683.12. A claim for this sum was conceded leaving a residual claim of £131,920.52 for sums payable to another company, Global, as a result of the failure of Caledonia to honour its obligation to re-purchase the cars (plus another for storage charges). Alternatively, statutory interest was claimed on the repurchase monies. This residual claim was pursued to trial before HH Judge Kershaw QC on 15 th/16 th January 2001 and failed in its entirety on both bases submitted.

6

The reason it failed was that the learned Judge accepted submissions first raised by Caledonia in a skeleton argument by counsel exchanged on the Friday before the Monday 15 th January hearing that, upon strict construction of a leasing contract between West Wallasey and a third party finance company (Global), West Wallasey had sustained no contractual loss nor themselves been kept out of principal monies entitling them thereby to any interest.

7

Nearly 9 years on now, the claimant seeks to recover from its former lawyers the loss of an extant offer “at the doors of the court” of £100, 000 including costs less the sum awarded by the court of £9,714.29 (£90,285.18) plus own trial costs of £3,520.30 and adverse costs of £5,000 totalling £98,805.48 plus interest.

8

It is thus unashamedly a claim for “overvaluing” the true worth of the original claim and for losing the opportunity of obtaining an unjust windfall settlement in the lottery of civil litigation, if respect is properly to be had for the justice of the findings by the trial judge.

9

As a matter of public policy, advocates no longer have special immunity from liability and are in the same position as surgeons performing an operation. However, the courts are very wary of the dangers of effectively relitigating disputes and will not undermine judgments already made and accepted (the rule in Henderson v. Henderson). It is also very costly to revisit commercial disputes. By way of contrast, the combined total costs of the original claim were in the region of £40,000 -£50,000; the costs of this litigation are in the region of £306,000 with the Claimant spending £90,000 on a maximum claim of £98,805 plus interest.

10

As discussed below, the court must be very wary of the dangers of hindsight and of imposing its own standards above, or below, those of “ the Bolam test” (see below) in the litigation context where, uniquely, the court is its own expert. Furthermore, this particular area of litigation 'settlement' is a notoriously difficult area of anticipatory professional judgment: an “art” probably more difficult than that of a doctor advising on the chances of a successful operation where there is more “science” to guide the professional.

Law

11

It is important to remember that the “Bolam test” is just one stage in the fourfold stage test to determine negligence or breach of contractual duty of due care.

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”].

12

This case raises issues under each of those stages.

13

Under Stage 1 ( duty), the general obligations of lawyers were elucidated in Canada by Riley J. in Tiffin Holding limited v. Millican 49 DLR (2nd) 216 (as approved by the Supreme Court of Canada (1967) 60 DLR (2nd) 469:

“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].

14

The balance of duties shared between solicitors and counsel is helpfully summarised in Locke v. Camberwell Health Authority [2002] Lloyds Rep. P.N 23 at page 29 it was stated:

“(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.”

15

Under Stage 2 ( breach of standards), the court needs to evaluate the evidence using the established 50 year old Bolam“jury direction” for professional negligence actions: i.e.

“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.”

16

This test is open to two potentially different standards:

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.

17

As Jackson & Powell on Professional Liability observe in paragraph 2–119, this distinction is frequently blurred but the latter approach is correct as it is the duty of the court to decide what is meant by the appropriate standard of professional competence.

18

In professional negligence cases, codes of practice or expert evidence of standard accepted practices are usually provided to aid the court in establishing what the requisite minimum standard is, or should be. It is then for the court, as a matter of law, to determine what that standard is: “The extent of the legal duty in any given situation must, I think, be a question of law for the court” per Oliver J. in Midland Bank Trust Co. Ltd v. Hett, Stubbs & Kemp [1979] 1 Ch. 384 at 402C.

19

In professional negligence cases against barristers and solicitors, the general rule is that, apart from specialist areas such as tax, expert evidence is not allowed as it is not required:

“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...

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1 cases
  • Lillo Sciortino v Marc Beaumont
    • United Kingdom
    • Court of Appeal
    • 25 May 2021
    ...of some period of limitation”; and West Wallasey Car Hire Ltd v Berkson & Berkson (a firm) [2009] EWHC B39 (Mercantile); [2010] P.N.L.R. 14. 49 The latter case is not an easy case to decipher and I respectfully doubt if it is, in truth, a reliable authority for anything very much at all......

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