Who should pay for bad legal advice?

The Court of Appeal has rejected submissions that financial constraints and economic pressures require solicitors to ‘commoditise’ their advice. Lord Justice Tomlinson warned against over-reliance on standard letters and tick-box questionnaires to discharge the duty owed to clients to ensure they fully understand the instructions that are provided.

The warning was given in Proctor v Raleys Solicitors [2015] EWCA Civ 400, where the court upheld a finding of professional negligence against Raleys for its conduct of Mr Proctor’s miner’s compensation claim.

The case concerned a claim
by Proctor that Raleys failed to adequately advise him that he could pursue a claim for loss of ‘services’ – assistance with DIY, gardening, and so on – as a result of his personal injury claim for excessive exposure to vibration, which led to the development of vibration white finger.

Raleys defended the claim
on the basis that they properly advised Proctor – they sent three standard advisory letters and questionnaires to Proctor
but did not meet with or speak directly to him. Raleys argued that Proctor did not instruct the firm that he required assistance with services and refused to accept that their approach resulted in his lack of instructions.

Short discussion

His Honour Judge Gosnell,
sitting at Leeds County Court, found that Raleys should have done more to ensure that Proctor understood the nature of his instructions: ‘It was not too much to ask the solicitor to directly consult with the client to advise him in layman’s terms what a services claim was and whether on the facts that applied to him he potentially qualified to claim.’

Raleys was granted leave to appeal on the question of whether the firm was negligent
in failing to conduct either a meeting or telephone conversation to satisfy themselves that Proctor
fully understood their advice.
The appeal was dismissed.

Tomlinson LJ observed it was reasonably foreseeable that clients such as Proctor would not fully understand long detailed letters and might misunderstand whether they had a right to claim. Tomlinson LJ was of the view that this matter ‘cried out for a short discussion with the client, preferably face-to-face, but if necessary over the telephone,
in order to ensure that the client understood the circumstances in which a claim… could be made’.

Would the decision have been any different had Raleys simply telephoned Proctor, spelling
out quite clearly what a claim
for services would look like and
what his prospects were? Quite possibly, provided, of course, a detailed attendance note was retained.

There will no doubt be some sympathy among the profession that it is not always commercial, or indeed practical, to conduct face-to-face meetings with clients, particularly in those cases subject to fixed-fee portal regimes. But the profession should tread carefully and heed Tomlinson LJ’s warning that solicitors should not feel ‘inhibited’ from ensuring that clients have ‘understood advice given...by the consideration that so ensuring might generate a further fee payable by the client’.

Undervalue settlement claims

So, is the profession likely to
see an influx of undervalue settlement claims on the back of this decision? Possibly. Of course, undervalue settlement claims are not a new phenomenon, but they have become increasingly prevalent, and will no doubt continue to do so as personal injury practitioners look to other more lucrative sources of work, viewing the handling of these claims as an easy transition from personal injury.

But, is it such an easy transition? Or are claims for professional negligence necessarily complex? This is a question which the profession will need to carefully consider if faced with increased numbers of low-value failed personal injury and undervalue settlements.

Often, professional negligence claims are treated as specialist and complex areas, and so attract hourly rates. But can high hourly rates and multi-track directions really be warranted in undervalue settlement claims worth no more than a few hundred pounds? Shouldn’t such matters be allocated to the small-claims
track or, alternatively, dealt with under the Legal Ombudsman scheme – a scheme designed
to allow lay persons to direct complaints without the need for representation and which is free of charge for the lay client?

Of course, the ombudsman is not supposed to adjudicate on matters as the courts would, but wouldn’t solicitors facing an undervalue settlement claim worth no more than a few hundred pounds welcome the ombudsman’s involvement? Wouldn’t that be more sensible than paying significant sums in claim costs for low-value disputes which, let’s face it, probably fall to be paid out of a firm’s excess rather than by insurers?

Surely there is an obligation on those within the profession to advise potential claimants that there are alternative ways to settle their disputes, such as the ombudsman. Whether this obligation is fulfilled against the backdrop of an opportunity to make some money is another story. SJ

Jennifer Haren is a solicitor in Weightmans' professional risk team

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