Supreme Court backs law firm

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In the recent case of Perry v Raleys Solicitors, the Supreme Court overturned the decision of the Court of Appeal and has provided long awaited clarity on the correct approach that should be adopted when considering the issue of causation in professional indemnity cases where the claimant alleges a loss of chance arising from failed litigation.

Background

In 1996, Mr Perry retained the defendant, Raleys Solicitors (Raleys) to advise him on his personal injury claim. Mr Perry had developed Vibration White Finger (VWF) resulting from excessive use of vibratory tools during his employment as a miner.

A group of test cases, representative of some 25,000 similar claims, established that there had been negligence on the part of the National Coal Board, later British Coal, in failing to take reasonable steps to limit the exposure of employed miners to VWF. As a result, in 1999, the Department of Trade and Industry established a tariff-based compensation scheme to assist in resolving the large number of VWF claims (the Scheme). As a result, in 1999, the Department of Trade and Industry established a tariff-based compensation scheme to assist in resolving the large number of VWF claims (the Scheme).

The Scheme provided for two main types of award, broadly akin to general damages and special damages (which could include a Services Award element). In order to successfully claim a Services Award, claimants needed to establish that:

  1. Before developing VWF, they had carried out certain domestic tasks without assistance
  2. That because of VWF they could no longer carry out those tasks without assistance
  3. That they had in fact since received assistance to carry out those tasks

Raleys settled Mr Perry’s claim for general damages and secured a payment of £11,600 in his favour. However, Raleys did not make any claim for a Services Award on behalf of Mr Perry. On 3 February 2009, Mr Perry issued proceedings against Raleys, alleging that, as a result of their negligence, he had lost the opportunity to claim a Services Award, which he quantified in the sum of £17,300.17 (plus interest).

The first instance decision

Raleys admitted breach of duty shortly before trial in April 2015. The trial judge held that Mr Perry did not require any relevant domestic assistance as a result of his VWF. It therefore held that, despite Raleys admission, it had not caused Mr Perry to suffer any loss. The judge referred to Mr Perry's lack of credibility as a witness and concluded that, even if Mr Perry had been advised of the potential claim for a Services Award under the Scheme, he could not have honestly brought such a claim.

The Court of Appeal's decision

In November 2016, the Court of Appeal overruled the first instance decision on causation grounds, concluding that Mr Perry had lost an 80 per cent chance of making a claim for a Services Award. The Court of Appeal, therefore, awarded Mr Perry £14,556.15 (plus interest). It was held that this was a rare instance where it was necessary for the Court of Appeal to interfere with the factual findings of a trial judge, who they considered to have erred in conducting a “trial within a trial”, ie an assessment of whether or not Mr Perry, on the balance of probabilities, was unable to carry out the relevant domestic tasks without assistance. 

The Supreme Court's decision

The Supreme Court unanimously upheld the decision at first instance. With reference to the Court of Appeal’s decision in Allied Maples Group Ltd v Simmons & Simmons, the Supreme Court held that the trial judge had correctly required Mr Perry to prove that, if properly advised, he would (on the balance of probabilities) have made an honest claim for a Services Award. Further, it was held that the trial judge had correctly examined whether Mr Perry was suffering from an inability to carry out the relevant tasks prior to the introduction of the Scheme.

The Supreme Court concluded that, based on his situation at the time, Mr Perry could not have given Raleys instructions that would have resulted in him pursuing a Services Award. The trial judge had found that Mr Perry was not, in fact, incapable of carrying out the relevant domestic tasks without assistance. It was also held that the Court of Appeal had wrongly interfered in the findings of fact by the trial judge. Mr Perry’s claim was unsuccessful.

Comment

The decision is about more than just dishonesty, although the Supreme Court has helpfully provided some clarity on that issue. Loss of chance claims have tended to help those claimants whose original claims were weak. However, the decision confirms that, when considering how a claimant would have acted if given proper advice, on the balance of probabilities, it is permissible for witness evidence to be subjected to forensic analysis. The prospect of subjecting claimants to such cross-examination when defending professional negligence loss of chance claims is a reassuring one for defendant solicitors and their professional indemnity insurers.

Notably, in his leading judgment, Lord Briggs reiterates the importance of the courts not awarding dishonest claims, even in instances where a solicitor has been negligent. At paragraph 26 of his judgment, Lord Briggs emphasises that "if nuisance value claims fall outside the category of lost claims for which damages may be claimed in negligence against professional advisors, then so, a fortiori, must dishonest claims”.

The decision also confirms that by conducting the above forensic analysis the courts would not be conducting a trial within a trial, which is still to be discouraged.

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