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Sinclair Roche & Temperley (a firm) v Somatra Ltd [2003] EWCA Civ 1474

Negligence - Shipping Law - Insurance - Breaches of duty caused fundamental loss of trust and confidence in solicitors to conduct case properly and in accordance with clients’ reasonable wishes - Settling claim for less than its true worth foreseeable and reasonable response to breaches of duty - Solicitors had failed to show that trial judge wrong to find that their breaches of duty had caused their client to loose trust and confidence in them - Solicitors liable in damages for difference between settlement achieved and 75% settlement which would have been achieved

31 October 2003

A tanker owned by Somatra, a company controlled by a Saudi Arabian businessman (S), sank in the South Atlantic in 1991. The immediate cause of the loss was a large explosion on board. The vessel was mortgaged to the bank and was insured for $40.5m. The proceeds of the insurance were assigned to the bank. Somatra retained English solicitors who made a claim on the insurance in 1991. The lead insurer (Arig) refused to pay on grounds that the vessel was unseaworthy and that owners either knew or should have known of that unseaworthiness. In 1992 the solicitors issued points of claim. S then decided to retain a firm of solicitors (SRT) in relation to Somatra’s claim. Eventually Somatra settled its claim against the insurers for two-thirds of its value. It then commenced proceedings against SRT alleging breaches of duty, which caused Somatra to settle at that value when it could and should have recovered more. The judge held that SRT had been in breach of duty and that Somatra would other...

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