Court of Appeal looks at door of court settlement

Judgment has been handed down by the Court of Appeal in Joanne Dunhill v W Brook & Co (1) and Justin Crossley (2), affirming the exoneration of both the solicitor and counsel in respect of a settlement reached at the doors of the court in 2003. Mills & Reeve acted for the first defendant law firm (Bharti Patel and Sarah Wearmouth), instructing Jamie Smith QC and Glenn Campbell. 

Background

The claimant instructed the solicitors to pursue an RTA claim against a motorcyclist. A liability-only trial was ordered in January 2003, and attended by a trainee solicitor on behalf of the solicitors’ firm, and counsel. The claim was settled on a full and final basis for £12,500, after one of the claimant’s witnesses failed to attend.  Nearly six years later, the claimant brought two actions: the first sought to re-open the RTA claim on the basis that she had lacked mental capacity at the time of settlement (the injury alleged to have arisen from the accident). This issue went all the way to the Supreme Court, and in 2014 the claimant was found to have lacked capacity and the court refused to retrospectively approve the settlement. This meant that almost a decade later, RTA insurers had to re-open the claim. That claim subsequently was resolved at 55% of its full value. It is noteworthy that the advice the claimant had received prior to the 2003 court hearing was that she was looking at a substantial contributory negligence reduction, such that she would receive only 33%.

The second action was a claim against the solicitors and counsel, and proceeded by way of a liability only trial. While a number of allegations were made during the proceedings, the only one of substance that ultimately remained was that the defendants had been negligent with regard to advice given concerning the settlement reached at court in 2003. The court found that neither defendant had been negligent in this regard. That decision was appealed by the claimant, and the matter was heard in February of this year. The Court of Appeal found that the trial judge’s conclusion that Mr Crossley was entitled (in 2003) to have feared that the claimant’s case may have failed in its entirety, was not a conclusion that could be interfered with (Fage UK Ltd v Chablani). As regards quantum, the Court of Appeal  was not prepared to say that Mr Crossley’s advice in 2003 was ‘blatantly wrong’. The benefit of hindsight played no part, which has to be right.

Comment

A number of issues arise out of the first instance decision, and the affirmation by the Court of Appeal: 

Door of court settlement: Each case is dependent on its specific facts, as to the circumstances in which a decision is taken to settle the claim at the doors of the court. Here, counsel found himself with a key witness failing to attend, assessed this as a significant setback for the prospects of success (on a liability only trial) and advised the claimant that there was a real risk she may lose and receive nothing. 

The case is a useful reminder that when advice to settle is given at the doors of the court, that fact in itself forms part of the context when assessing whether the advice was negligent. In a climate of post-settlement remorse, this case is positive for the profession. It can be far too easy for clients to agree a settlement, be it at court or in mediation, only to feel disgruntled afterwards, think they should have done better and then blame their solicitors or counsel. 

Role of the solicitors/trainee: The Court of Appeal noted (importantly) that “It cannot sensibly be suggested…that the case could succeed against the solicitors if it fails against counsel”.  The other aspect for practical consideration is the decision as to whether or not to send a trainee/unqualified staff to attend hearings and/or trials. Often this may well be appropriate (and indeed insisted upon by clients for cost purposes). The Court of Appeal noted “…it is worth observing that I consider there to be merit in the proposition that it fulfils the solicitors’ duty of care to permit a trainee to accompany properly instructed counsel to a split trial provided that he or she has instructions that a solicitor (preferably having the conduct of the case) is available if the need arises.” In our view, this is common sense.

This long-running piece of litigation is now at an end, and whilst the claim rightly failed against the professional defendants at first instance and on appeal, the claimant did succeed in setting aside the original settlement and achieving a 55% award in her RTA claim (as against the 33% advised back in 2002/3). As the Court of Appeal wryly observed, the figure she received  “is clearly very substantially in excess of the figures ever remotely considered [in 2002/3] and far greater than the upper limit placed on the claim before the County Court hearing.”