Negligence claim defeated on breach, causation and limitation - textbook success

Begum v Neejam LLP and Mallick
Summary

This was a loss of chance claim that arose out of the defendants’ handling of the claimant’s employment claim against her former employer. The key allegations against the defendants were that their handling of the employment claim and their advice as to the value of it had been negligent, such that the claimant recovered substantially less than she was entitled to; and their negligence exacerbated her psychiatric illness. The claimant claimed around £560,000.

The court exonerated the defendants and, in any event, found that even if breach had been established, the claim would have failed on causation. The personal injury claim also failed, as there was no medical evidence to support causation and there were serious problems for the claimant in establishing foreseeability, as the court was not persuaded to widen the application of Farley v Skinner.

Ultimately, the court held that the claim was statute-barred (adopting Bennett v Greenland Houchen & Co) and that the claimant could not rely on section 14 or section 33 Limitation Act.

Mills & Reeve acted for the first defendant firm, instructing Clare Dixon of 4 New Square.

Background

The claimant was employed as a receptionist/credit controller, and her gross salary was £11,000 p/a. The claimant had a history of bulimia and depression.

In October 2008, the claimant sent an offensive email to one of the directors and was subsequently suspended pending a disciplinary investigation. During the course of her suspension, the claimant raised a grievance complaining about the director’s rudeness towards her. That grievance was not upheld and so the claimant raised a second grievance, this time alleging that the director had sexually harassed her and discriminated against her. The employer decided that the claimant’s grievance was malicious and that there had been a breakdown in the relationship between her and the other employees. The claimant was dismissed in January 2009.

The claimant issued a claim for unfair dismissal against her former employer in June 2009. The claimant retained the first defendant shortly afterwards, and instructed them to issue an additional claim seeking damages for severe depression, PTSD and bulimia, as a result of race discrimination and sexual harassment that she had suffered at the hands of her former employer. The second defendant (a barrister) was instructed to represent the claimant at the hearing in May 2010.

The claim settled on the second day of the hearing for £33,000.

The claim
The allegations

The key allegations were that the defendants’ handling of the claimant’s employment claim and their advice as to the value of it had been negligent, such that the claimant recovered substantially less than the true value of her claim. As regards loss, part of the claim included a claim for personal injury “caused” by the defendants’ negligence.

Limitation

Section 11 Limitation Act 1980 applies to negligence claims in which the damages sought include damages for personal injury. The limitation period is three years from the date on which the cause of action accrued - not six years, as is the case for a straightforward negligence claim (section 2). As such, the court needed to consider the date on which the personal injury accrued and, if the claim form was issued out of time, whether section 14 or section 33 enabled the claimant to overcome limitation issues.

Judgment

HHJ Worster, sitting as a judge of the High Court, held that the claimant’s claim failed on breach, and would have failed on causation in any event - £33,000 was a good settlement, and had the second defendant not advised her to accept it, she would have been allowing the claimant to take an unwarranted risk. The claim was also found to be statute-barred.

The facts of this loss of opportunity claim are unremarkable, and it is simply a case in which the outcome depended on the merits and evidence. However, what is of particular interest for insurers in this market place is the court’s determination on limitation. The court found that the entire claim was time-barred - the rationale being that the three year time limit started running from 6 May 2010 (the date on which the claim settled) and the claim form was not issued until October 2013.

Having considered all of the evidence in the case, the court held that the claimant could not rely on section 14 because the judge was satisfied that the claimant had the requisite knowledge by 17 May 2010 when she reported to her psychiatrist that she was not sleeping well and was suffering depressive symptoms. No explanation was given for the delay in issuing the claim, and the judge concluded that it would not be just or equitable to extend the limitation period pursuant to section 33.

Comment

Insurers of the legal profession will be all too well aware that loss of opportunity/under-settlement claims are commonplace. While fact specific, this decision is a useful reminder that a detailed forensic analysis of how underlying claims were originally settled (and the rationale applied) means that robust defences can be mounted.

The decision further supports the proposition that a solicitor’s duty of care does not extend to holding a client harmless against personal injury, should the outcome of the retainer be less advantageous than the client alleges it ought to have been.

Finally, the decision is a salient reminder of the important limitation considerations that apply in a professional negligence claim when the damages sought include damages for personal injury.