Cannibalism in the legal sector

The legal industry has long been home to firms and claims companies seeking redress on behalf of victims of accidents, as well as the less scrupulous firms with a reputation for chasing business where none is to be found.

Such firms are becoming resigned to industry history. However, a new, insidious, and creeping trend of cases has begun to emerge, with professional indemnity insurers finding an increasing volume of claims brought for ‘under-settlement’ of those same accident claims.

This has become informally known as ‘cannibalism’.

Claimants are drawn in by online advertising and cold calls, often with a vague description of the legal basis of the claim, but a clear promise of increased recovery from their former solicitors on a ‘no win, no fee’ basis.

Setting aside for a moment the fact that the legal industry, in a climate of cost cutting and political interference, could well do without firms turning upon each other, is bringing a case over a genuine belief in under-settlement so underhand? Simply put, no.

Genuine grievance

There will, unfortunately, be a small minority of cases where something goes wrong – no industry is perfect.

If a client feels a genuine grievance as to the conclusion of their case, they should of course have options available to them, and therein lies the problem. Is the grievance ‘genuine’?

If a potential claimant honestly believes there has been a gross error in their case, their papers will show this. The claimant will have complained to their solicitor and gone through their solicitor’s formal complaints procedure, and if needs be, they will have taken the matter to the Legal Ombudsman.

The procedures are all in place to deal with such situations and are designed to give customers of legal services clarity and transparency.

It is worth noting that it is the minority of cases that reveal any such error has occurred.

A perfect example of a genuine grievance is Amalgamated Metal Corporation plc v Wragge and Co (a firm) [2011]. In this instance, a claimant’s case had been settled both on negligent advice and without their authority, a serious error with a serious consequence – a loss of £7.65m to the claimant.

Unlike a ‘cannibalism’ case, this grievance had a clear legal basis, with specific allegations, a specific and quantifiable figure sought, and a specific grievance to redress.

As a counterpoint, consider Alexander Langsam v Beachcroft LLP [2012]. Here, there was no negligence by the claimant’s solicitors, who had given cautious advice on settlement of claim, supported by the advice of their leading counsel.

A client may feel that the award they are advised to accept is too low, they may disagree with it, and they may object to it. This is sometimes because a claimant has the figure they want in their mind before their solicitor or barrister has even spoken.

The accurate figure they are presented with then has a bitter aftertaste, and the seed of the mistaken belief that the case has been under-settled is sown.

Opportunistic claims

The largest problem with ‘cannibalism’ claims is that they are opportunistic and strategic rather than brought from any genuine need for redress on the claimant’s part. They target the claimant’s general dissatisfaction with the level of the original settlement, something which often arises from unrealistically high initial expectations or due to changes to evidence in the case rather than from any omission or error.

The beginning of a ‘cannibalism’ case, when the claimant’s representatives contact the former solicitor requesting a copy of the claimant’s file with vague references to ‘a potential professional negligence claim’ – without citing specifics or allegations – is the first evidence of the opportunistic element, coming across more as a fishing expedition than an attempt to redress a specific grievance.

Following this will often be a standardised document, inserting criticisms of alleged minor flaws in the file and then trying to link them as the cause for a ‘gross under-settlement’ of the original claim. There are even instances where the alleged flaws can be countered by simply reading the file provided.

Because the case is brought opportunistically, this document will often not contain the required level of detail, the legal foundation relied on, the causal link between the alleged flaw and the under-settlement, or a specific figure being sought as redress.

This indicates the main and most opportunistic aim of the ‘cannibalism’ case: to advance a case with minimal or no intention of bringing legal proceedings, using solicitors’ concern for protracted litigation and costs to force them to settle, on an entirely commercial basis, with no acceptance of any under-settlement or error on their part.

Worse, perhaps, it muddies the water for the legal consumer, replacing closure and finality in litigation with lingering doubt. SJ

Chris Neale is a litigation assistant at Bott & Co and an unregistered barrister