Mr Justice Underhill:
INTRODUCTION
- In May 2004 the Claimants in this case ("PJH"), who are a firm of solicitors, settled a claim for negligence brought against them by clients called Mr. and Mrs. Fox. The settlement was in the sum of £110,000 plus £160,000 in respect of costs. The Defendants, Mr. Peter Susman QC and Mr. David Batcup, are leading and junior counsel instructed by Mr. and Mrs. Fox in relation to the same matter but against whom they did not proceed. PJH say that the Defendants were also negligent and were responsible for the same loss, and they accordingly seek a contribution from them pursuant to s. 1 of the Civil Liability (Contribution) Act 1978.
- The negligence alleged by Mr. and Mrs. Fox against PJH (and by PJH against the Defendants) consisted in a failure to advise them of the time limit applicable to a potential claim against their previous solicitors, Messrs. Wellers. The lost claim against Wellers would itself have been a claim for negligence in failing to advise Mr. and Mrs. Fox of the time limit applicable to a claim against another firm of solicitors, Lindars Leech (and/or the responsible partner, Mr. Alan Leech) ("LL"). The lost claim against LL would have been for negligent advice given to Mr. and Mrs. Fox which it was said led to them losing the opportunity of the favourable settlement of a complicated dispute arising out of a property development project in Spain. The advice in question was given in late October 1985, and (subject to an immaterial qualification which I discuss at para. 43 below) the settlement opportunity was lost by the end of that month. Accordingly any claim for that loss would prima facie have had to have been brought by the end of October 1991, and any action against Wellers for failure to advise Mr. and Mrs. Fox of that deadline would have had to have been brought by the end of October 1997: that is the deadline which it is said that PJH and the Defendants failed to draw attention to.
- PJH have been represented before me by Miss Sue Carr QC and Ms. Anneliese Day and the Defendants by Mr. Roger Stewart QC and Mr. Jamie Smith. I am grateful for their cogent and helpful submissions.
THE FACTS
- As the bald summary given in para. 2 above suggests, the history of this matter is lengthy and involved and, from Mr. and Mrs. Fox's point of view at least, makes a sorry story. I have been taken through voluminous (though not entirely complete) files spanning the entire history of Mr. and Mrs. Fox's travails with the law over twenty years. Although I shall try to confine myself as much as possible to those aspects which are essential to the resolution of the issues before me, I cannot avoid giving a fairly full account. As is inevitable, there are many obscurities about the details. My account will derive very largely from the contemporary documents. Although the witness statement of Mr. Fox in his proceedings against PJH is formally in evidence before me, he was not available to be cross-examined on it; and, as will appear, he has been demonstrated to be, while not in any way dishonest, an unreliable historian. The "live" witnesses from whom I heard – that is, two partners in PJH, Ms. Sally Hartwell and Mr. Stewart Hinds, and the two Defendants – did not claim to be able to remember much beyond what could be reconstructed from the documents, and I will only occasionally need to refer to their witness statements or to the oral evidence.
A. THE ORIGINAL DISPUTE AND THE SETTLEMENT OFFER
Mr. and Mrs. Fox
- Mr. Fox was born in 1919. Between leaving school at the age of fifteen and his (early) retirement in 1966 he had a successful career in business, latterly as Managing Director first of Fine Fare Supermarkets and then of Robinson Rentals. He obtained no professional qualifications but he was clearly a man of considerable vigour, ability and independence of mind. He has recently suffered a serious decline in his health, and he was unable to give evidence in these proceedings, though I have the witness statement (dated 9th January 2004) which he prepared for the purpose of his claim against PJH, together with several other statements of varying degrees of formality and a great deal of correspondence generated by his earlier claims.
- Although Mrs. Fox was to a greater or lesser extent concerned with some aspects of Mr. Fox's business affairs, the evidence before me suggests that her involvement, at least in dealings with the lawyers, was very limited. I may in what follows refer sometimes to Mr. Fox alone in circumstances where I should strictly be referring to Mrs. Fox as well, but if so the inaccuracy should not affect any matter of substance.
The Original Dispute
- In 1970 Mr. and Mrs. Fox undertook a development of holiday apartments at Cala Vinas in Majorca through a company owned by them called Promociones Calas SA. The project absorbed most of Mr. Fox's savings. After a while it ran into difficulties. In 1980 Mr. Fox entered into an arrangement under which a company called Rantlodge Ltd. would help to finance the completion of the project. The precise details of the arrangement are obscure, but the terms that matter for present purposes are (a) that Mr. Fox's interest in the project, valued at £350,000, would be vested in a Spanish company controlled by Rantlodge, in return for shares in an English company, and (b) that in order to help secure borrowings by Rantlodge he would deposit a sum of £70,000 in an account in its name with Banco de Bilbao. The prime mover behind Rantlodge was a Mr. Anthony Hanson. Other individuals associated with Mr. Hanson were a Mr. Farnsworth, a Mr. Cobb and a Mr. Rey (a Swiss businessman): the various individuals and companies associated with Mr. Hanson have been referred to in these proceedings as "the Hanson interests".
- There were further problems affecting the project. The most serious was that in the course of insolvency proceedings brought against Promociones Calas in Majorca Mr. Fox was in October 1981 unexpectedly thrown into prison in Palma, where he remained for over four months. There is no suggestion that Mr. Fox was guilty of any wrongdoing. Who should be regarded as responsible for what happened to him is unclear: several interests were involved in the development and its affairs were complicated.
- Following that episode relations between Mr. Fox and Mr. Hanson deteriorated. Rantlodge went into liquidation. Mr. Fox did not receive – and, to anticipate, has never received – either the return of his deposit or any shares or payment in respect of his interest in Cala Vinas. He believed that Mr. Hanson was reneging on their original agreement and that he had deliberately set out to cheat him and had indeed helped to procure his imprisonment in Majorca. I need not for the purpose of these proceedings decide whether those beliefs were justified, save to observe that on any view Mr. Fox had invested a good deal of money in the project and got nothing back. What matters is that he felt passionately that he had been the victim of a grave injustice and that Mr. Hanson and his associates were dishonest.
The Fontana Proceedings
- In 1984 Mr. Fox instructed solicitors, Messrs. Stoneham Langton & Passmore ("SLP"). He had the benefit of legal aid. His case was handled by SLP's "Senior Litigation Manager", Mr. Geoffrey Lines, at their office in Croydon. Mr. Lines was not a solicitor but an experienced managing clerk. It is fair to record that, although one aspect of Mr. Lines's advice has since been criticised, he appears to have acted throughout in a diligent and conscientious way; and Mr. Fox, even when he did not accept his advice, went out of his way to pay tribute to the service that he had received from him.
- There were some earlier legal skirmishes with which I need not be concerned (including the lodging of a claim in the winding-up of Rantlodge), but in November 1984 Mr. Fox learnt that the £70,000 which he had deposited with Rantlodge had been transferred to an account with Banco de Bilbao in London in the name of a Panamanian company called Fontana Holdings Inc. ("Fontana"). He issued proceedings against Fontana for the recovery of the money (plus interest) and obtained a Mareva injunction which was effective to freeze some US$181,000 in the hands of the bank. Mr. Fox intended also in due course to bring proceedings against Mr. Hanson and/or his associates based on what he believed to be their dishonest conduct against him from 1980 onwards, which would involve a much larger claim; but SLP's advice appears to have been to defer doing so for the time being. Fontana instructed Titmuss Sainer & Webb ("TSW"), who also represented the Hanson interests as a whole. Mr. Fox sought summary judgment but in June 1985 Fontana was given leave to defend. A defence was served on 2nd July.
The Settlement Discussions of October 1985
- The Hanson interests appear from at least mid-1984 to have been interested in settlement and various discussions took place. Outline settlement offers were made in early 1985 and again in June 1985. SLP advised that these should be pursued but Mr. Fox regarded them as unsatisfactory. Mr. Jolyon Grey of counsel advised Mr. Fox in August 1985 that his claims – both his current claim against Fontana and his contemplated claims against the Hanson interests – faced "a catalogue of problems" and continued:
I am therefore firmly of the view that the right approach to the Plaintiff's predicament is to get for him what money can assuredly be obtained by way of settlement in 1985, rather than by way of hope of future recovery in proceedings whose outcome cannot safely be predicted. Such a settlement will not be achieved by further legal expense or threats at this stage, but rather by hard-headed commercial negotiation.
Mr. Fox in a letter to SLP dated 15th August 1985 politely but firmly rejected this advice. He expressed himself perfectly willing to settle on the right terms but made it clear that the terms then on offer were in his view inadequate.
- On 7th September 1985 there was a telephone discussion between Mr. Fox and Mr. Farnsworth on behalf of the Hanson interests which resulted in an agreement in principle on the terms set out in the following without prejudice letter from Mr. Fox to Mr. Farnsworth dated 8th September:
Further to our telephone conversation yesterday I am, as requested, writing to confirm my acceptance of the firm settlement proposals you have put to me on behalf of your associates and/or associated companies.
The offer is as follows:-
1. The payment to Mr Fox of £125,000 upon completion of a settlement agreement.
2. Four payments of £80,000 thereafter over a period of four years.
3. The instalment payments to be suitably secured and guaranteed in a manner acceptable to my solicitors.
In return Mrs Fox and I will undertake to:-
(a) Acknowledge that we have no claim against Fontana Holdings Inc. or A.J. Hanson, or V.M. Cobb and that we shall withdraw the claim in the liquidation of Rantlodge Limited.
(b) Cease all communication either personally, by mail or otherwise with any business associate, professional or banking contact of Mr Hanson, Mr Cobb or Mr Rey, or any member of the Press or Intermediary of any such person or persons, for the purpose of discussing or commenting upon any of the affairs or interests of Mr Hanson, Mr Cobb or Mr Rey.
(c) Refrain absolutely from holding ourselves in any way as being connected with or interfere in any way with or do anything which might affect the development and sale of the project known as the "Cala Vinas project in Mallorca".
I now assume that my solicitors Messrs Stoneham Langton & Passmore will hear from your solicitors in due course … .
The total amount payable, over the five-year period, was thus £445,000. That payment would be in full and final settlement of the entirety of Mr. and Mrs. Fox's claims against the Hanson interests, covering the wider potential claims referred to in para. 11 above.
- Discussion then followed between Mr. Lines of SLP and Mr. Thomas of TSW with a view to concluding the agreement in principle which had been reached by Mr. Fox and Mr. Farnsworth. A crucial question requiring to be resolved was how the future instalments totalling £320,000 were to be "suitably secured and guaranteed" as per head 3 in Mr. Fox's letter. On 24th September 1985 TSW sent SLP a draft Agreement ("the first draft"). This provided for an immediate payment of £125,000 by bankers draft. As regards the future payments, cl. 3.2 of the draft Agreement provided that Fontana should
… confirm to Mr. Fox and Mrs. Fox that four non-discountable Bills of Exchange of £80,000 making a total face value of £320,000 have been deposited with [ ] on specific instructions to deal with each of the Bills of Exchange in the manner set out in paragraph 3.2.1 on each of the four consecutive anniversaries of the date of this Agreement.
3.2.1 [ ] will make available to Mr. Fox and Mrs. Fox the relevant Bill of Exchange on each of the anniversary dates of this Agreement referred to in paragraph 3.3 in order to enable Mr. Fox and Mrs. Fox to obtain payment from the [ Bank] in the amount of £80,000 drawn on the account of Fontana.
3.2.2 The Bills of Exchange shall be guaranteed by U.B.I. by way of an indorsement upon the back of each Bill of Exchange to that effect, and should Fontana be unable to meet the amount of any or all of the said amounts of £80,000 U.B.I. shall be liable to pay any amounts outstanding forthwith.
("U.B.I." was defined in para. 2.1 as "U.B.I. Service Industry Holdings S.A.", which was a company owned or controlled by Mr. Rey.) In return, by para. 4.1 of the draft Agreement Mr. and Mrs. Fox abandoned all their claims against the Hanson interests and entered into a number of ancillary undertakings: I need not set these out in full, but they included undertakings not to volunteer information to the regulatory authorities or to other named parties who were in dispute with the Hanson interests, and to deliver up documents relating to the dispute (subject to a promise that such returned documents would not be used as the basis of a claim for defamation against them). Para. 4.2 of the draft provided as follows:
For the avoidance of doubt it is hereby agreed that should any term on the part of Mr. Fox and Mrs. Fox be broken by them either separately or by both of them, the obligations on the part of Fontana and U.B.I. referred to in paragraph 3 will lapse and become null and void and in the event that any term is broken Mr. Fox and Mrs. Fox undertake to reimburse Fontana any amount paid to them prior to the breach of any such term or terms.
- The proposed scheme as regards the future instalments thus was that an unidentified third party would hold the bills for the amounts in question but would be under instructions to deliver them to Mr. and Mrs. Fox on their due dates: they could at that point be presented, and, if Fontana failed to pay, UBI would be liable. It is not clear to me what the advantage was thought to be of using bills of exchange in this way, given that the bills were not to be delivered to Mr. and Mrs. Fox in advance of the due dates (and indeed, though this provision would in those circumstances seem to be redundant, were expressed to be non-discountable). The same substantive result could have been achieved by a straightforward promise to pay, supported by UBI's guarantee. Mr. Stewart submitted that the adoption of this elaborate mechanism was an indication that the Hanson interests were not making their offer in good faith.
- Mr. Lines sent a copy of the draft to Mr. Fox. Mr. Fox apparently discussed it on the telephone with Mr. Farnsworth. While they were considering it Mr. Thomas of TSW sent a telex message pressing for agreement on the basis that "both parties are anxious to settle this matter as soon as possible". Mr. Fox and Mr. Lines agreed that it was unacceptable that the bills should be guaranteed by UBI. SLP wrote to TSW on 1st October making that point and suggesting that Mr. Rey indorse the bills personally. Mr. Lines and Mr. Thomas then had a telephone conversation on 3rd October. On the following day TSW wrote to SLP saying that they were seeking instructions on the identity of a "reputable institution in the U.K." which could act as guarantor. He again emphasised the need for urgency in reaching agreement.
- On 7th October Mr. Lines and Mr. Thomas spoke again. Mr. Thomas told Mr. Lines that the offer now was that the bills would be indorsed by a bank called Swiss Volksbank ("SV"), which had a London branch, and that SV would also probably act as the "holders" of the bills - not, that is, as holders in the technical sense but as the party that would retain possession of them until their due date as provided under cl. 3.2 of the draft. They discussed (and Mr. Lines marked up in manuscript on his copy of the first draft) the various amendments that would be needed in the light of this proposal, together with some other changes. Having made some enquiries to establish the identity and apparent reputability of SV, Mr. Lines told Mr. Thomas that, subject to contract, they now had a deal; but he said that he intended to put the draft Agreement to counsel in order to have the detailed drafting checked. It is clear – although, as will appear, Mr. Fox later came to remember things differently – that Mr. Lines told Mr. Fox what had happened and what he was doing and that Mr. Fox did not demur.
- On 10th October Mr. Lines sent instructions to Mr. Grey asking him to "re-settle" the first draft of the Agreement. He enclosed a re-typed version of TSW's draft incorporating the changes which he had discussed with Mr. Thomas ("the second draft"). I should note the following points from his Instructions:
(1) He opened by saying that he was sure that counsel would be delighted to hear that "after considerable efforts by all concerned Mr. Fox has been persuaded to accept a settlement package …" - which he goes on to summarise. This way of putting it may not quite do justice to the fact that the basic deal had in fact been procured by Mr. Fox himself and was – if properly secured - a significant improvement on anything so far offered; but no doubt it reflects the fact that both Mr. Lines and Mr. Grey regarded Mr. Fox's case as one that ought to settle but had doubted whether a settlement acceptable to Mr. Fox was likely to be forthcoming. It also clearly shows that Mr. Lines understood Mr. Fox to have agreed to settle on these terms.
(2) He emphasised the importance of getting the drafting watertight because of the provision (cl. 4.2) allowing for the Hanson interests to resile in the event of breach by Mr. and Mrs. Fox; and he suggested that in the event of such a breach being alleged it might be better if the agreement provided for "this to be a matter which must be brought back to the court".
(3) He asked Mr. Grey to advise within two or three days since "both parties to this case are desirous of effecting an early settlement and Fontana's solicitors are imposing rigorous time limits". He referred to the risk that the Hanson interests might pull out if there was delay, but he thought that that was unlikely if the revised draft were submitted promptly.
- Mr. Grey returned a marked-up draft of the Agreement the following day, October 11th (a Friday). Mr. Lines had it re-typed ("the third draft") and sent that same day to Mr. Fox asking him to look at it over the weekend and get back to him on the Monday, i.e. the 14th, with his comments. The third draft broadly followed the shape of the first two drafts. Mr. Grey gave effect to the proposed involvement of SV by providing that (a) the four bills for £80,000 (still described as "non-discountable") should be drawn by Fontana on SV and indorsed for acceptance by it (cl. 3.2) and (b) that the bills so indorsed should be deposited with SV who would be instructed to deliver them to Mr. Fox or his representatives on the relevant anniversaries (cls. 3.2.1 and 3.2.2) so that they could then be presented for payment. Notwithstanding the introduction of SV as acceptors, Mr. Grey left in the provision for indorsement by UBI (cl. 3.2.3). He did not incorporate any changes implementing Mr. Lines's suggestion that the Hanson interests be required to raise any alleged breaches by Mr. Fox in court proceedings.
- Mr. Lines sent the third draft, i.e. Mr. Grey's re-draft, to TSW. He and Mr. Thomas discussed it on the telephone on 15th October. They agreed certain further changes which Mr Lines marked up on his draft. The precise terms of those changes are unclear but the substance was to delete the provision for SV to accept the bills and substitute a provision that SV "guarantee" payment: they also agreed that the provision for a guarantee by UBI was now redundant. Those changes meant that it was necessary to have sight of the terms of the proposed guarantee from SV (as well, of course, as its confirmation that it was prepared to give it). It seems that Mr. Thomas promised that these would be supplied shortly. Mr Lines sent a copy of his marked-up draft ("the fourth draft") to Mr Fox.
- The position as at 15th October was thus that agreement in principle had been reached between Mr. Fox and the Hanson interests for the settlement of his claim for £445,000 payable over a period of five years, but that that was subject to the agreement of detailed provisions, principally (but not only) those providing for the instalment payments to be properly secured. As to the agreement of such provisions, SLP and TSW had reached agreement – subject to contract – on a draft, with the important exception of the terms of the guarantee to be given by SV. SV had neither itself confirmed to SLP that it was willing to give such a guarantee nor supplied a draft. The absence of that crucial element means that it is not strictly accurate to describe the Hanson interests as having made an offer – at least in the contractual sense. Nevertheless, in commercial terms there was a deal on the table, albeit one whose acceptability could only be assessed once SV's position had been confirmed; and I refer elsewhere in this judgment to the settlement "offer" in that sense. The terms of the guarantee which SV was prepared to offer were not simply a matter of mechanics. If it was framed as a guarantee in the strict sense, it would have protected Mr. Fox against the risk of "mere" non-payment as a result of insolvency or otherwise, but it would not have assured him of payment if the Hanson interests chose to assert that he was himself in breach of his obligations under cl. 4.1 and to invoke their rights under cl. 4.2. That risk, of which Mr. Lines was aware, could only be precluded if SV were willing to accept an independent obligation to pay. That seems unlikely, and it would indeed have been inconsistent with the mechanism under which the bills were to be "held" by SV and only released on their clients' authority: it may also be significant in this context that TSW had departed from the proposal that SV accept the bills. The absence of such protection would not have rendered the proposed guarantee from SV worthless, but it meant that Mr. and Mrs. Fox could not rely on having a summary remedy if Fontana failed to pay.
B. OCTOBER l985 – JANUARY 1991: LINDARS LEECH
- There are two aspects to the involvement of LL – (a) the involvement of Mr. Leech in relation to the settlement offer from the Hanson interests discussed above; and (b) the subsequent conduct of litigation on Mr. Fox's behalf. The former is of central importance in this case, and I need to set out the facts in considerable detail. The latter is of lesser importance and can be dealt with much more summarily, even though it covers several years.
(a) LL's Advice on the Settlement Offer
- Although it was he who had procured the original settlement offer, Mr. Fox was by the week-end of 12th/13th October 1985 beginning to have second thoughts about whether the Hanson interests could really be trusted to deliver on the later instalments. It was, understandably, a big step for him to give up his claim in return for a package most of which would be received only in the future; and he wanted to be as sure as possible that the £320,000, which represented the lion's share of the financial recovery and his family's future financial security, would be paid. He appears to have discussed the position at length over the week-end both with members of his family and with a Mr. Cutting who was also engaged in litigation against the Hanson interests. He decided that he needed to take a second opinion. Mr. Cutting recommended Alan Leech of LL, who had acted for him and another Rantlodge creditor called Geoffrey Wood in their disputes with the Hanson interests and had, so Mr. Cutting said, experience of the devious way in which they operated.
- Mr. Fox rang Mr. Lines on 15th October. He explained his concerns and said that he wanted to get a second opinion on the Agreement. Mr. Lines sought to dissuade him, but Mr. Fox went to see Mr. Leech later that day. He took with him a copy of the draft Agreement which Mr. Lines had sent him on 11th October (i.e. what I have called the third draft). Mr. Fox has given various, and conflicting, versions of the detail of what transpired at that meeting, helpfully and painstakingly analysed for me in a note supplied by Mr. Stewart and Mr. Smith as part of their closing submissions. Even the earliest of these were written some years later, and the details need to be treated with caution. But the broad picture which he gives is corroborated by the contemporary documents, particularly two letters written by him the following day (see paras. 25-26 below). In summary, Mr. Fox's account is that Mr. Leech gave him "forceful" advice that the terms of the draft Agreement were unacceptable, both because the undertakings being sought from himself and Mrs. Fox were too wide (and thus gave scope for the Hanson interests to raise spurious allegations of breach) and because the mechanisms proposed for ensuring payment of the future instalments were inadequate. He seemed to know something about Mr. Fox's dealings with the Hanson interests already, apparently from Mr. Cutting and/or Mr. Woods. He emphasised, from his own experience of dealing with the Hanson interests, that they could not be trusted. He made it clear that he believed that, because of that experience, he thought he would be better at dealing with them than SLP. Mr. Leech's manner was "dominant" and inspired confidence. In the course of the meeting he asked to speak to Mrs. Fox on the telephone, and he summarised to her in strong terms the points which he had made to Mr. Fox. In some accounts – most notably the "ten-page note" described at para. 47-49 below - Mr. Fox gives the impression that the essence of Mr. Leech's advice at the meeting was that all negotiations should be discontinued and that he should proceed at once down the litigation route (indeed in a later note he suggests that Mr. Leech offered to undertake such proceedings on a contingency basis). His witness statement in the proceedings against PJH gives a different impression and is to the effect that the emphasis was still very much on obtaining a settlement based on the original agreement with Mr. Farnsworth: what Mr. Leech said was that he would be able to obtain a "watertight" settlement. I need not seek to resolve those differences here, save to say that I am sure from the overall history and from his contemporary letters that Mr. Fox was still very willing to settle if he could get reasonable assurance of payment of the future instalments. It is at least clear that Mr. Leech advised Mr. and Mrs. Fox in strong terms that the Agreement as it then stood was unacceptable and that in consequence of that advice they decided to transfer the handling of the matter forthwith from SLP to LL.
- On 16th October Mr. Fox wrote to Mr. Lines, in terms drafted by Mr. Leech, asking him to transfer the papers to LL. He expressed his reasons as follows[1]:
I have expressed to you my deep concern about the terms of settlement being offered by Fontana/Hanson etc; I am particularly concerned about the extensive undertakings which are being required from me and the fact that payment is being spread over 4 years on terms that would give the opposition scope for argument over whether there had been proper compliance with these extremely wide undertakings.
I am apprehensive that they could use this as an excuse for non-payment of stage payments as they fall due. I am also concerned that if I was to proceed on these terms I would be in constant peril of an action to try and snatch back any money actually paid to me.
You must be aware that the entire cause of my complaint about the persons who make up the opposition in this case is that their professed bona-fides are never to be taken at face value and I have no trust whatsoever in any of them.
He said that he knew that it was Mr. Lines's strong view that the settlement terms should be accepted and that it was not possible to obtain a second opinion, funded by legal aid, while SLP continued to act for him; and that accordingly a transfer to another firm was the only option. He continued:
I am not closing my mind entirely to the prospect of settlement but simply wish to ensure that I get the best possible terms.
In this context it is important that I should feel secure and that my wife and I have peace of mind in the knowledge that we have done the best thing.
I cannot proceed with confidence on the terms currently on offer.
I and my wife are aware of the risks of delaying acceptance of the terms and of seeking to negotiate further if we are advised to do so. However we consider the risks of proceeding with the terms on offer to be far greater.
We have considered the position very carefully before arriving at this conclusion and we hope you will not take it amiss or as a reflection on your own abilities.
- On the same day, i.e. 16th October, Mr. Fox also wrote to Mr. Leech in the following terms:
Further to our meeting in your office yesterday when I sought your advice regarding the proposed financial settlement of my claim against Rey/Hanson/Fontana etc, I am now enclosing a copy of the latest Draft Agreement (no. 3) that includes the Swiss Volksbank Guarantee, plus other amendments, all of which my present solicitors, Messrs Stoneham Langton & Passmore, have approved.
After my wife and I spoke to you yesterday we both thought you understood our problem of being very anxious to proceed with the completion of the Fontana Agreement but being a little hesitant due to our mistrust of Mr Hanson and our fear of his clever trickery.
This is why, after discussing the situation with John Cutting he suggested we consulted you for a second opinion and guidance on the Agreement and the proposals.
However, we both thought you were so definite and convincing in advising us not to sign the Fontana Agreement that in accordance with your instructions I have today posted off to Mr Lines the letter you prepared for me.
I will though, definitely telephone you tomorrow to obtain your views and opinions on this latest Draft Agreement and to discuss your proposal to take over my litigation and to issue Writs for Conspiracy to Defraud against Mr Rey, Mr Hanson, Mr Cobb and others.
I will then be able to telephone Mr Lines of SLP to discuss the contents of the letter I have sent him and what the latest position is with the Fontana proposals.
The copy draft Agreement enclosed was the copy which he had received that day from Mr. Lines marked up in manuscript with the changes agreed with Mr. Thomas on 15th October, which I have referred to as the fourth draft: see para. 20 above. The principal difference was that SV would now be giving a "guarantee" rather than accepting the bills. Mr. Fox referred to it as "no. 3" because it was the third of which he was aware, the others being TSW's first draft and Mr. Grey's re-draft: he had not seen (or needed to see) the intermediate version which I have called the second draft (see para. 18 above).
- On 17th October Mr Lines and Mr. Fox spoke and it was agreed that Mr. Lines would deal directly with Mr. Leech. Over the next few days, they spoke and steps were put in train for the transfer of the legal aid certificate, although for reasons that are unclear the transfer did not go through until February 1986.
- Meanwhile TSW were becoming restive. On 21st October they wrote to SLP pressing for confirmation that the terms of the draft Agreement were now satisfactory. They acknowledged that SLP had not yet received a draft of "the Guarantee to be provided by Swiss Volksbank": they said that SV had confirmed that a draft would be forthcoming but they were having problems with their word processors. But they said that that was no reason for not finalising the rest of the Agreement.
- It seems that Mr. Fox and Mr. Leech spoke again by telephone on more than one occasion. On 23rd October 1985 Mr. Leech wrote Mr. Fox a letter of advice in the following terms:
I refer to our various recent conversations and confirm that Stoneham Langton & Passmore have indicated to me that they require no further written authorisation from you in relation to changing the conduct of the dispute from them to me and they are writing to the Law Society today indicating their consent to an amendment to the Certificate showing that my firm now has conduct of the matter. I enclose a copy of my letter to the Secretary to the General Committee.
Following my last telephone conversation with you, Mr Lines and I spoke again by telephone (overcoming the difficulties of the power cut which had apparently affected his office) and discussed the mechanics of hand over and the letter he had received from Mr Thomas from Titmuss Sainer and Webb this morning. That letter was in essence chasing for response and reciting, with variable degrees of accuracy, a telephone conversation Mr Thomas and Mr Lines had had last week. I told Mr Lines, and he agreed, that it was not appropriate for him to respond to that letter but he is sending a copy, noted with his comments, so that I may make a full response when notifying Titmuss Sainer and Webb of the change of solicitors, which I propose to do tomorrow. The only principal matter of interest in the letter is that Thomas has come up with an excuse for not supplying the form of Guarantee which it is proposed the Swiss Volksbank will give in support of the terms of the settlement on offer. We are told that they are having problems with a word processor so the terms are not available at present !
As I have advised you in conversation I consider that there are a number of extremely serious defects in the draft agreement currently under discussion. Principally these go to the clauses demanding the handover by you of all the documents relating to the matters in dispute and the persons involved, which I think is a far too onerous commitment for you. If any documents are to be handed over, that is an obligation which should be severely curtailed. As to the so called Bills of Exchange, it is in my view that references to Bills of Exchange in the Agreement are a complete red herring. Unless the Bills are delivered to you (and it is proposed that they should be withheld from you) they would be practically valueless because you would not be in a position to sue on them unless you were the holder. It is not enough that they are held on deposit by an independent party who is susceptible of being subverted by an instruction not to part with them. Furthermore, unless the bills are going to be endorsed by a responsible party, there is no point whatever in having Bills of Exchange. Certainly you do not want to be in a position where the only possible target for an action on the Bills of Exchange (if you were able to obtain possession of them) would be Fontana Holdings Inc, so that you would have to undertake the same rigmarole of serving Fontana as you did when the current action commenced.
If there is to be no delivery of properly endorsed bills to you, it would be far more honest of the opposition and to your advantage that a Court Order is made specifically in terms that payment of whatever instalments are agreed should be made on particular days so that that order could be enforced immediately on default without having to embark on subsequent fresh litigation. That order itself could form the subject of a Guarantee given by a suitable person, possibly Swiss Volksbank, as security for the payments.
I also take the seriously considered view that the Undertakings being required from you are far too wide and susceptible to further argument. However, if Titmuss Sainer wish to insist on wide undertakings, there is a method of accommodating them to a large extent if the sanction backing up the Undertaking were changed. Rather than permitting Fontana and the guarantor bank to withhold payment from you as the Bills fall due and even to claw back payments already made, the undertakings you give could be made to the Court itself so that if the opposition wanted to make a fight over breach of undertaking, their only proper route to do so would be by way of contempt proceedings against you. That would mean they would have to air their grievances in front of a judge as soon as they make them, as opposed to putting in spurious Defences and Counter Claims as is their normal tactic when Bills of Exchange they have given in the past are bounced by them, or issuing writs with specious Statements of Claim in an effort to terrorise an opponent smaller than themselves into an unfavourable out of Court settlement. In my years of experience of litigating against Mr Rey and his associates, I have seen both tactics used by them to reasonably good effect. It is essential that every effort is made to avoid falling into any trap so that such tactics are available to them in your case.
There are other grounds for objecting to the terms, which we have discussed. I certainly do not like the idea of the only person on the opposition's side being bound by the agreement as Fontana when at the same time, you are being asked to enter obligations for the benefit of Rey and all of his associates (even those who have not been named). Certainly a promise by Fontana that you would not be sued for defamation is worthless as any of the others would be quite free to do so. I know that this is not a particular fear of yours, since you feel you can justify anything you have said by pleading that it is all true or fair comment. On the other hand, libel suits are expensive and one can foresee a further weapon being added to the Rey armoury if this provision were allowed to go through without comment.
After several discussions with you, I believe you appreciate that there can obviously be no guaranteed outcome of the change of solicitors and it may well be that, knowing me well as John Cutting's solicitor, Titmuss Sainer & Webb initially refuse to negotiate further with me on your behalf and try to call the whole deal off. If they were to do so there can be no real certainty when negotiations may resume, if at all. However, if that is the line the opposition adopt, I shall be more than happy to continue the litigation against them with the full force available to me and you can be assured of my commitment to pursue the matter on your behalf.
I shall keep you advised of all developments as they occur.
- Mr. Leech's letter is full and explicit, and prima facie is the best evidence of his definitive and considered advice on the matters which it covers. Broadly, it is consistent with the advice which Mr. Fox says that he had been given a week earlier. But it is necessary to bear in mind that by the time that it was written Mr. Fox had already been persuaded by Mr. Leech's initial oral advice to instruct LL in place of SLP with a view to, at the very least, seeking a radical re-negotiation of the draft Agreement and perhaps to abandoning it altogether and proceeding to litigation; and that transfer had already been put in train. It should also be noted that Mr. Leech on 23rd October had before him a different draft from that which he was considering on 15th October; but that point may be less significant, in that the essential features which he found objectionable in the later draft were present in the earlier.
- There is no attendance note from LL of his conversations with Mr. Fox at this time (save for one from 31st October referred to below) – though it is not certain whether this is because none were made or because they have not survived. Nor has there ever been any witness statement from Mr. Leech.
- It is a central question in this case whether the advice given by Mr. Leech to Mr. Fox was negligent. I defer consideration of that question at this stage. It is however convenient to note here what seem to be the main factual points about that advice:
(1) Mr. Fox's letter to LL of 16th October – which is the nearest contemporary evidence of what happened on the 15th - supports his earlier accounts to the effect that Mr. Leech advised him to "reject" the proposed settlement and issue proceedings against the Hanson interests. But that letter also shows that he was still interested in settlement, and LL's letter of 23rd October does not advise that negotiations should be broken off: indeed the clear implication of the penultimate paragraph is that Mr. Leech would attempt to pursue the negotiations with TSW on the basis of the existing deal but on terms that gave Mr. Fox a better level of security as regards the future payments (albeit that he warned that the attempt might fail). That makes sense. Mr. Fox had himself negotiated the underlying deal and there is every reason to suppose that he would have wanted to go ahead with it if payment of the future instalments could be assured. Although the signs are that Mr. Leech did indeed talk on 15th October about issuing further proceedings against the Hanson interests, that is likely to have been only as a weapon to secure a better deal and only if it were necessary. That is certainly the thrust of the letter of 23rd October.
(2) However, although Mr. Leech's advice seems to have been to try to re-negotiate the deal, the extent of the re-negotiation which he envisaged would in practice be likely to be seen by the Hanson interests as a rejection. His objections to the terms of the draft Agreement as set out in the letter of 23rd October would have required dispensing altogether with the mechanism under which bills of exchange were "held" by a third party, as well as requiring some modification in the obligations on Mr. and Mrs. Fox. It is true that those could be characterised as mere changes of machinery, to which the Hanson interests could have had no legitimate objection; but given the history of the negotiations up to that point that is unlikely to be how they would have been perceived.
(3) Mr. Leech said in his letter of 23rd October that he intended to notify TSW of the change of solicitor "tomorrow" (i.e. 24th October): he does not say whether he intended to do so in the first instance by telephone or in writing.
(4) Mr. Leech gave Mr. Fox a clear warning that the effect of instructing him might be that the Hanson interests withdrew from the negotiations, at least for the time being, in which case litigation would be necessary.
- The warning given by Mr. Leech about the Hanson interests' possible response to his being instructed proved correct. On 25th October 1985 Mr. Thomas was told by Mr. Lines that Mr. Fox was transferring his instructions to LL (though it is possible that he had already heard it: NB the use of the word "confirmed" in the letter quoted below). On 28th October TSW wrote to SLP in the following terms:
We refer to our telephone conversation of the 25th October 1985 when you confirmed that Mr Fox wished to change his solicitors and instruct Lindars Leech. We have not heard from Lindars Leech confirm [sic] this as yet and we are therefore writing to you.
Our clients have instructed us to inform you that because Mr Fox now intends to raise certain issues that have always been considered by our clients to be non-negotiable, and because Mr Fox now intends to change his solicitors and indeed this is yet another example of his lack of seriousness and genuine desire to negotiate a settlement of the whole matter, all offers made to date, whether without prejudice or otherwise, are withdrawn.
If necessary, please draw this letter to the attention of your client and to Lindars Leech.
- Precisely what prompted TSW's letter is unclear. The reasons given by them for the withdrawal of the offer are that Mr. Fox was "now" seeking to raise non-negotiable issues and that he was intending to change solicitors; but they do not specify what the supposed new demands were or how they had been communicated. At first sight the most likely explanation might appear to be that Mr. Leech had contacted Mr. Thomas, as he had told Mr. Fox that he intended to (see para. 32 (3) above); and that whatever he said was regarded by Mr. Thomas or his clients as raising new issues. It certainly appears to have been Mr. Fox's original understanding that Mr. Leech had spoken to TSW and "rejected" the offer. However, there is no letter or attendance note from Mr. Leech evidencing any contact between Mr. Leech and Mr. Thomas before 28th October. What is more, the first paragraph of TSW's letter implies that Mr. Leech and Mr. Thomas had not spoken; and an attendance note made by Mr. Leech on 31st October recording a discussion with Mr. Fox says that he had thought it better not to contact TSW until the legal aid formalities had gone through. It is possible that the references in question mean only that LL had not written to TSW to say that they were on the record, and that they do not exclude a telephone conversation having occurred between Mr. Leech and Mr. Thomas; but that is not the natural reading, and it seems much more likely that TSW had indeed not heard at all from Mr. Leech. In that case the allegation in the letter that Mr. Fox intended to raise non-negotiable issues remains puzzling. One possibility is that Mr. Thomas was drawing an inference that some re-negotiation was intended from the mere fact of LL being instructed, of which he had heard from Mr. Lines – why else change solicitors ? – but it is also possible that Mr. Lines had said something to Mr. Thomas which indicated Mr. Fox's concerns, or that Mr. Thomas or his clients had heard something through other channels. In this uncertain state of the facts it is impossible now to decide whether Mr. Fox, or LL on his behalf, are to be regarded as having rejected the settlement offer – either explicitly or by raising significant new points – or whether what occurred was in substance a withdrawal by the Hanson interests, albeit because they (rightly) anticipated an attempted re-negotiation. Ultimately, it does not much matter: by one means or another it was plainly the advice given by Mr. Leech which led to the breakdown in negotiations.
- Mr. Stewart invited me to infer that the explanations offered by TSW for their withdrawal were in truth only excuses and that it in fact demonstrates that the Hanson interests had no real desire to settle and/or that they could not give adequate security to SV to persuade them to proceed with the promised guarantee. I think this is unlikely. However the breakdown came about, I see no reason to doubt that what caused it, by one route or another, was the instructing of LL. TSW's letters up to that point give the clear impression that they were very keen to reach an agreement and that Mr. Thomas believed that a guarantee from SV would be forthcoming. That was clearly Mr. Lines's impression. Although it is possible that TSW were being fooled by their clients I see nothing to suggest that that was so. Of course the form of guarantee eventually offered by SV might have fallen short of what either SLP or LL would have advised was adequate, and the Hanson interests might well have wanted a form of agreement which gave them some "wriggle room"; but that is different from them not intending to settle at all.
(b) October 1985 - March 1991: the Conduct of Mr. Fox's Claims
- As explained above, I need not set out in detail the steps taken by LL following TSW's withdrawal of the settlement offer. The essential points are as follows.
- The Hanson action. The withdrawal of the settlement offer meant that further proceedings were necessary in respect of Mr. Fox's wider claims against the Hanson interests: such proceedings had of course always been contemplated - see para. 11 above. Their preparation took an inordinately long time, but eventually in March 1988 a generally-indorsed writ was issued in the Chancery Division against no fewer than sixteen defendants (the first-named four being Messrs. Rey, Hanson, Cobb and Farnsworth). The indorsement, which was signed by Mr. Gwyn Price-Rowlands of counsel (who practised from common law chambers), ran to some seventeen pages and alleged fraud, conspiracy and a variety of other wrongs. Counsel produced a draft Statement of Claim, but it was thought that Chancery expertise was needed, and assistance was sought from Mr. Peter Griffiths of counsel, who was highly critical of the draft pleading. In circumstances which are not clear to me Mr. David Wade, also Chancery counsel, was in February 1989 instructed by a different firm of solicitors, Thomas Boyd Whyte ("TBW"), to provide a written Opinion. This too was also highly critical of the draft pleading, and Mr. Wade also drew attention to a number of other difficulties, including limitation, and advised that the Hanson action did not merit legal aid. (He did however give more positive advice about the Fontana action.) Notwithstanding TBW's involvement LL retained the conduct of the Hanson action. The precise sequence of events over the following year is unclear. The gist is that Mr. Fox was obliged to abandon the claim against the great majority of the defendants named on the original writ, with consequent liabilities for costs; but that Mr. Timothy Sewell of counsel was able to advise in February 1990 that the action remained viable against Mr. Rey, Mr. Hanson and Mr. Cobb. In the event, however, the claim against Mr. Rey was also struck out on 19th October 1990 and the claim against Mr. Cobb on 25th January 1991, with further liabilities in costs being incurred. Accordingly the only claim left was against Mr. Hanson. It seems that the legal aid certificate in force, as transferred from SLP to LL, did not cover the issue of the proceedings, with the result that Mr. Fox had no protection against the costs liabilities to the defendants against whom the action had been dismissed or discontinued. There is some suggestion in the papers before me that the claims being brought by Mr. Fox and by LL's other clients, Mr. Cutting and Mr. Wood, were being treated by LL as mutually supportive: this may have been wholly unobjectionable, but there was at least some potential for conflict of interest.
- The Fontana action. From October 1985 to July 1989 no further steps were taken in the original Fontana proceedings. On 21st July 1989 Auld J. discharged the Mareva injunction on the grounds that the underlying action had not been proceeded with. An appeal to the Court of Appeal was procedurally defective, and LL failed to respond to an invitation to show cause why it should not be dismissed. The appeal was accordingly formally dismissed on 13th December 1989. There then followed a remarkable series of events. LL made a fresh application for summary judgment (notwithstanding that an earlier application under O. 14 had been unsuccessful in 1985), and in support of that application made a fresh application for Mareva relief - without, it seems, disclosing the previous history. Potter J. granted the order. It appears that Banco de Bilbao at that stage still retained the funds. In March 1990 Judge Baker, sitting as a Deputy High Court Judge, granted summary judgment and continued the Mareva in support of judgment. Fontana appealed. In March 1991 – after LL had ceased to be instructed, but it is convenient to deal with it here - the Court of Appeal allowed Fontana's appeal against the summary judgment order and discharged the Mareva. It was, echoing Auld J., highly critical of the delay in prosecuting the Fontana action between 1985 and 1989. It also noted LL's procedural failures on the attempted appeal from Auld J.'s order, and it described LL's conduct in obtaining the second Mareva as "outrageous". The discharge of the Mareva meant that the Fontana action – being against a Panamanian company with no assets in the jurisdiction – became for practical purposes valueless.
- Mr. Leech may at some point – the evidence is unclear - have engaged in some settlement discussions with the Hanson interests, but if he did they got nowhere.
- It in fact appears from a decision of the Solicitors' Disciplinary Tribunal dated 4th October 1990 that during the period after 1985 Mr. Leech suffered some kind of nervous breakdown which led to him not giving proper attention to his clients' affairs. This may account for at least part of the lack of progress with Mr. Fox's claims. On 31st January 1991 LL was dissolved. It also seems that at about this time Mr. Leech was made bankrupt, though I do not have any details; and he was in due course struck off the roll.
Potential negligence by LL: "the lost settlement claim"
- It was clearly LL's duty, following TSW's withdrawal of the settlement offer, to get on with Mr. Fox's claims against the Hanson interests – both the Fontana action and the projected wider proceedings. No doubt the primary object would be to bring them back to the table with an offer that could be accepted – whether that were the previous offer, with the question of the "guarantee" satisfactorily resolved, or some different offer. The history of the conduct of both claims from 1985 to 1991, as summarised at paras. 37-38 above, shows that there was – to put it at its lowest - an arguable case that LL were in breach of that duty. The unsatisfactory way in which the writ in the Hanson action was first drafted in such extravagant terms and then had to be drastically pared back might also reflect a breach or breaches of duty on the part of LL. When any such breach or breaches first occurred would no doubt be debatable, but even if time started to run in contract in, say, 1986 or 1987 it seems unlikely that Mr. Fox could be regarded as having suffered any damage, such as to start time running in tort, until July 1989 at earliest, when the Mareva in the Fontana action was discharged.
- However, these proceedings are not directly concerned with any claim against LL for breaches of the kind discussed in the previous paragraph (though, as will appear, they feature significantly in the narrative) but with what PJH say was a discrete claim arising out of the advice given by Mr. Leech, and any associated acts or omissions, in October 1985. I will not at this stage express any view on the merits of such a claim, but it is important to identify its nature. What PJH say, adopting what Mr. Fox said in his claim against them, is that the criticisms made by Mr. Leech of the terms of the settlement offer were misconceived, and that the consequent advice which they say that he gave that the offer should be rejected was unreasonable. It is their case that the only proper advice to Mr. Fox was that given by SLP, namely that the offer should be accepted subject to an acceptable guarantee being offered by SV – which there was no reason to believe would not be forthcoming. Mr. Leech's negligent advice, it is said, set in train the sequence of events which led to the offer being withdrawn.
- If such a breach were established, time would start to run in contract from the dates that the advice in question was given – that is, in the period 15th to 23rd October 1985. As regards a claim in tort, the obvious trigger point for the damage caused by the breach would be the date of the withdrawal of the offer, i.e. 28th October 1985. Both parties before me were agreed that an argument might be made for loss to run from a somewhat later date, on the basis that it was Mr. Leech's duty to follow up TSW's letter of 28th October and attempt to secure the reinstatement of the offer and the conclusion of a satisfactory settlement based on it, which he apparently did not do; but it was common ground that in respect of any claim on that basis time would start to run, in contract or in tort, within at most a few weeks of 28th October. Given the later sequence of events, that is an unnecessary refinement, and I can for practical purposes treat time on such a claim as running from the end of October 1985.
- PJH refer to the claim against LL analysed at paras. 42 and 43 above as "the lost settlement claim". Mr. Stewart submitted that that term is ambiguous because the chance of settling the Fontana and Hanson actions at some subsequent date between 1986 and 1991 was one of the losses suffered as a result of LL's mishandling of those actions. I accept that it is necessary to be on the look-out for possible confusion; but I nevertheless regard the term as a useful shorthand provided it is understood to what it refers – that is, a discrete claim that as a result of negligent advice given by Mr. Leech in October 1985 Mr. Fox lost the opportunity to settle the claim for £445,000 at that time, being a claim in respect of which time started to run at the end of October 1985.
C. JANUARY 1991 - MARCH 1996: WELLERS
- By late 1990 or the very beginning of 1991 it had become clear to Mr. Fox that he could not continue to instruct LL. In January 1991 he instructed Wellers and asked LL to transfer their papers to them. Wellers continued to act until March 1996. However, as with LL, although for different reasons, it is necessary to consider their involvement over two distinct periods. The negligence alleged against Wellers is their failure to advise on the expiry of the time limit for suing LL in relation to the lost settlement claim. As discussed above, time in relation to that claim started to run at the end of October 1985 and accordingly expired at the end of October 1991. It is common ground that at no time prior to that date did Wellers appreciate that there might be a relevant time limit or give any advice in relation to it. The question is whether they should have done so, and I need to examine the events of this period in order to see whether the instructions and information which they received from Mr. Fox were such as to put them on notice that he might have a discrete claim against LL in relation to which both breach and loss occurred prior to the end of October 1985. The period after 28th October 1991 is relevant only as background, albeit important background, to the alleged later negligence of PJH and the Defendants in failing to identify the possibility of a claim against Wellers. Accordingly, save as regards one or two particular points, I can deal with events in this period more summarily.
(a) January-October 1991
- The immediate matter requiring attention by Wellers following their being instructed was the conduct of the Fontana and Hanson actions, and in particular the pending appeal to the Court of Appeal in the Fontana action. Mr. Fox was of course by now highly critical of the service which he had received from LL, referring in a letter to Wellers of 2nd February 1991 to "five wasted and negligent years"; but he does not appear at that stage explicitly to have asked for advice about suing them. However, following the decision of the Court of Appeal in the Fontana action, which effectively put paid to any prospect of recovery in those proceedings, Miss Nickson, the partner handling the matter, advised Mr. Fox to seek legal aid to bring proceedings against LL. The statement, dated 8th March 1991, which he made for the purpose of his legal aid application, drafted by Miss Nickson but no doubt reflecting her instructions from Mr. Fox, complained of the conduct which had led to the loss of the Mareva in the Fontana action and of Mr. Leech's dilatoriness and incompetence in initiating the Hanson action; but there was no complaint, express or implied, about the advice given in October 1985. Wellers did not at that stage have full papers from either SLP or LL: they received the former in December 1991 and the latter in March 1992.
The ten-page note
- On 2nd May 1991 Mr. Fox had a meeting with Miss Nickson at which she asked him for some further information in connection with his legal aid application. On 6th May he sent her some "notes". There was a dispute before me as to what the notes in question were. Complete certainty is not possible; but the probability is, and I accordingly find, that they consisted of a ten-page untitled document which appears in the trial bundle at pp. 2182-2191, described before me as "the ten-page note". I make that finding because Miss Nickson in her reply dated 8th May, thanking Mr. Fox for "your helpful summary with [sic] your dealing with Alan Leech", asked for copies of two identified letters which had evidently been referred to in the document; not only are both those letters referred to in the ten-page note but a pencil X appears in the margin next to the references to them, and the natural inference is that those markings were made contemporaneously by Miss Nickson as a reminder to herself to bespeak copies. Mr. Fox sent the two letters (one of them being Mr. Leech's letter of 23rd October 1985[2]) by return.
- The significance of the ten-page note is that it sets out in considerable detail the circumstances in which Mr. Fox first came to instruct LL. The passage relating to his advice about the settlement agreement, at pp. 3-4 of the note, reads as follows:
I informed Stoneham Langton & Passmore of our intention and proceeded to arrange a meeting at the office of Lindars Leech in Kensington, London. At this meeting Alan Leech told me he already had a clear understanding of my litigation and knew about my financial difficulties and I confirmed to him that my actions were being undertaken under the Legal Aid Scheme.
Following consideration of the Fontana agreement Alan Leech told me that there were serious defects in the settlement arrangements and that he strongly advised me not to proceed with the matter. During the meeting he also telephoned my wife to emphasise his opinion that we should reject the agreement and let him undertake on our behalf the litigation against Fontana/Rantlodge et al.
On the 23rd October 1985 Alan Leech wrote to me confirming his views in no uncertain terms, following which I and my wife were persuaded to change solicitors. On 24th October Stoneham Langton & Passmore wrote to the Law Society stating they had no objection to the transfer to Lindars Leech of the two Legal Aid Certificates Numbers 1/1/83/5465R and 1/1/84/9304K.
I think it relevant to record that during the initial meeting and discussion with Alan Leech concerning the agreement, my wife and I clearly indicated that the settlements of £125,000 down and the 4 annual payments of £80,000 each were, with the undertakings, quite satisfactory but his adamant opinion that we would never receive the annual payments and would be in danger of having to repay the £125,000 had persuaded us to take his advice.
This passage, and in particular the final paragraph, seem to me to carry a fairly clear implication that Mr. Leech's advice to reject the settlement was misjudged. But there is no explicit criticism, still less any allegation of negligence; and most of the rest of the note is concerned with an account, in much more explicitly critical terms, of the work of Mr. Leech, and counsel instructed by him, in connection with the Hanson action. The final page of the note reads as follows:
It was now apparent from his conduct and comments that Alan Leech was hoping to frighten Mr Rey/Hanson/Cobb into offering me once again the very same settlement terms that he had advised my wife and I to reject in 1985 by issuing a Statement of Claim for Conspiracy to Defraud that he had been strongly advised by three separate Barristers "could not be pleaded and would be struck out".
This was a gamble that Alan Leech was determined to take without any thought, care or attention to the consequences or what the resulting effect would be for me and my family.
Combined with this neglect was the careless failure to pay attention to the prosecution of the action against Fontana Holdings Inc., which he had completely ignored for four years despite our continual requests to Alan Leech to activate the action.
Alan Leech has been negligent in the conduct of the litigation matters of my wife and I and this has resulted in the following losses ...
A. The benefit of the Settlement Offer made to us in October 1985 by Fontana Holdings Inc.
B. The loss of our funds deposited at the Banco de Bilbao, London branch
C. The costs awarded to Mr Rey which resulted in a charge on our house, impending eviction with distress, anxiety & misery.
- Ms. Carr submitted that the ten-page note, and in particular the final page and "head A" in the concluding summary, contains a clear allegation that Mr. Leech's advice to reject the offer constituted a negligent "gamble" and accordingly that it explicitly raises the lost settlement claim. I do not think that is right. The thrust of the final page, and indeed of the document as a whole, is that Mr. Leech had mishandled the Hanson litigation: the gamble to which Mr. Fox refers is Mr. Leech's conduct in serving a pleading which he knew was liable to be struck out simply in the hope that it would frighten the Hanson interests into a settlement offer. It is true that logically that conduct cannot have caused the loss of "the benefit of the settlement offer made to us in October 1985"; but I think that the natural reading of the passage, although it is rather elliptically expressed, is that Mr. Leech's incompetence, which resulted in a position where the most that Mr. Fox could hope for was the restoration of an offer which had been made and rejected five years previously, meant that there had been no point in his rejecting the offer first time round. In other words the focus of Mr. Fox's criticism was not on the initial advice but on the subsequent incompetence. Having said that, it remains the case that the note, read with LL's letter of 23rd October 1985, put Wellers on notice of the advice given by Mr. Leech; that Mr. Fox was at least implicitly critical of that advice; and that he complained that by LL's conduct overall he had lost the benefit of the settlement offer that had been available in October 1985.
Wellers' initial instructions to Mr. Batcup
- On 31st July 1991 Wellers sent instructions to Mr. Batcup to advise on a claim for damages against LL and to draft proceedings if he felt in a position to do so. The instructions explained that Wellers had not yet had Mr. Leech's file but said that on the basis of the papers so far available "the areas of possible negligence" were twofold – the conduct leading to the loss of the Mareva in the Fontana action and thus in practice of the sum claimed in the action; and the dilatory and incompetent handling of the Hanson action leading to the costs liabilities to the defendants against whom proceedings had been dismissed or discontinued. Item 3 in the enclosures to the Instructions was described as "undated statement of Robert Fox". This cannot be identified with certainty, but in my view it was probably the ten-page note. If, as I have found, Miss Nickson had been sent this in May it would have been very odd if she had not included it in the materials which she sent to counsel: in addition, there is a copy in the papers marked with a "3" written on the front page. Mr. Batcup's evidence was that he did not think that he had seen the ten-page note at this time; but he accepted that his recollection might well be wrong.
- Mr. Batcup gave some initial advice on the telephone on 6th August 1991 but made it clear that he needed a conference. That conference did not in fact take place until 27th November. No further information of any significance had been supplied by Mr. Fox. By the time that the conference took place the limitation period for proceeding against LL on the lost settlement claim had of course expired.
Potential Negligence by Wellers
- Again, I will defer my consideration of whether Wellers had been negligent in failing prior to the end of October 1991 to identify the possibility that Mr. Fox had a discrete cause of action against LL arising out of the advice given in October 1985 and thus to advise on the limitation period applicable to such a claim. I will only observe at this stage that any case to that effect would need to depend largely on the ten-page note. That was the only documentary material before Wellers which might arguably have put them on notice of the lost settlement claim.
(b) October 1991- March 1996
Mr. Batcup's initial advice
- There is no note extant of the conference with Mr. Batcup on 27th November 1991. It would be natural for it to have focused on the issues identified in his instructions, and I note that a further lengthy statement from Mr. Fox provided shortly before the conference says nothing about the events of October 1985. It appears, however, from subsequent correspondence between Mr. Fox and Wellers that there was at least some discussion of the settlement offers made by the Hanson interests up to and including October 1985 and that Mr. Batcup asked to see further documents in that regard. Some further documents were duly supplied: it is not clear what they were, though they certainly included Mr. Leech's letter of 23rd October 1985 (which Wellers in fact already had – see para. 47 above). It is impossible to be sure, and I do not have to decide, whether at the conference Mr. Fox was explicitly critical of the advice which Mr. Leech gave him in October 1985. He may have been, given the terms of the letter which he later wrote to Wellers (see para. 55 below); but I think it unlikely that he adumbrated any claim for negligence based on that advice or that Mr. Batcup was asked to advise on the merits of such a claim.
Mr. Wadsworth's advice
- Mr. Batcup did not at that stage proceed to produce an Advice or draft pleadings for the purpose of the proposed claim against LL, but he was in February 1992 instructed in the Hanson action. He successfully resisted a strike-out application on behalf of Mr. Hanson (now the sole remaining defendant) and drafted an Amended Statement of Claim. In June 1992 he recommended that leading counsel be instructed to advise, for the purposes of legal aid, on the prospects both of the Hanson action and of the proposed LL proceedings. After a long delay, Mr. James Wadsworth Q.C. was instructed. He provided a written Opinion dated 31st March 1993 to the effect
(a) that the Hanson action had insufficient prospects of success to justify the continuation of legal aid (he recommended continuation of legal aid to defend a counterclaim by Mr. Hanson, but that was unlikely to be persisted in if the claim were discontinued); and
(b) that there was sufficient prospect of success in a claim against LL to justify further investigation.
He made it clear, however, that he would welcome a consultation and that his advice should be regarded as provisional pending any such consultation.
- Mr. Fox was very disappointed by Mr. Wadsworth's advice on the Hanson action and confirmed that he would like a consultation in order to discuss that advice. He also, however, saw the consultation as an opportunity to raise a further issue. On 18th May he wrote to Wellers as follows:
At our forthcoming meeting with Mr Wadsworth QC I would like to obtain his opinion on the fateful meeting I had with Alan Leech on the 16th [sic] October 1985 and if the advice he gave me was negligent and in breach of his duty of care.
I have tried to abbreviate the matter to the enclosed single page statement which may or may not help.
However, I will certainly not refer to this subject at the meeting if you do not approve or consider it unhelpful.
The enclosure was a one-page statement along similar (though not identical) lines to the passage from the ten-page note which I have set out at para. 48 above. It contained no explicit criticism of Mr. Leech's advice not to settle on the terms of the draft Agreement; but of course the covering letter made it quite plain that Mr. Fox was raising – for the first time in unambiguous terms - a potential allegation of negligence on the part of LL in October 1985 and thus in practice the lost settlement claim.
- For the purpose of the consultation Wellers returned Mr. Wadsworth his original papers together with Mr. Fox's statement. It is not clear whether they also included his covering letter, but their Note to counsel described the statement as raising "allegations of negligence against … Alan Leech arising out of a meeting in 1985". They questioned whether the existing legal aid certificate extended to advice on this aspect, since it pre-dated the start of the Hanson proceedings.
- The consultation took place on 8th July 1993. Mr. Fox, Miss Nickson and Mr. Batcup attended. Mr. Wadsworth dealt primarily with the merits of the Hanson action, on which he maintained the views expressed in his Opinion, to the chagrin of Mr. Fox. But he did also address the issue of Mr. Leech's advice in October 1985, as raised by Mr. Fox's statement. Wellers' note of the consultation records that:
Leading Counsel did not think that Leech had been negligent in advising Mr. Fox to reject the offer of settlement in the Hanson matter.
Unequivocal though that advice appears to have been, it is fair to point out that it is unclear what material Mr. Wadsworth had about the events of October 1985. It is not possible to reconstruct what his papers consisted of, but given the scope of the matters on which he had originally been asked to advise it does not seem likely that he had any of the drafts of the Agreement, and it is far from certain whether he had Mr. Leech's letter of 23rd October or the ten-page note. He may well have had to form his view on the basis of Mr. Fox's short statement which Wellers had sent him, together with anything else that he can have gleaned from Mr. Fox himself in the course of the consultation (which may not have amounted to much in the light of Mr. Batcup's recollection that the consultation was rather "bad-tempered"). It should also be noted that what Mr. Wadsworth appears to have addressed was only the substantive question of whether Mr. Leech had been negligent: he did not, at least if the note is accurate, address the question of limitation. That might be a surprising omission (albeit strictly immaterial if there was no claim in any event) if Mr. Wadsworth had been formally instructed to give full-dress advice on the question; but if limitation was indeed not dealt with that reinforces the impression that the question of the events of October 1985 was dealt with only summarily. Mr. Batcup's recollection, prior to seeing Wellers' note, was that there had been no discussion at all at the consultation of the events of October 1985. That is plainly mistaken; but it may be further confirmation that the discussion was not very full.
- Following the consultation Mr. Fox produced a further note for the attention of Mr. Wadsworth. This did not refer to the lost settlement claim. On 26th October 1993 Mr. Wadsworth wrote a short Further Opinion confirming that his views were unchanged, although he did advert to the possibility of Mr. Fox seeking a second opinion. The Hanson action remained effectively dormant thereafter. Mr. Fox remained very dissatisfied with the position. He complained that Wellers had not given Mr. Wadsworth proper instructions and continued over the next eighteen months to press for the Hanson action to be pursued. He was also unhappy that owing to what seemed to have been a procedural error by Wellers Mr. Hanson had in 1992 been able to enter judgment on his counterclaim, although it was in fact doubtful whether that had any substantive effect.
Mr. Batcup's advice about limitation
- Accordingly the focus of Wellers', and Mr. Batcup's, attention reverted to the claim against LL, in respect of which no writ had yet been issued. On 19th November 1993 there was a telephone conversation between Mr. Batcup and Mr. Simister of Wellers, who had recently taken over the conduct of the matter from Miss Nickson. In the course of the conversation Mr. Batcup expressed the view that because the time for bringing proceedings against LL in relation to the loss of the Mareva arguably ran from when it was first discharged by Auld J. it might have expired "this autumn". This was obviously wrong, since the Mareva had been discharged in July 1989, i.e. only four years previously; but Mr. Batcup had been telephoned cold and had no papers, and the likelihood is that between them he and Mr. Simister (who was new to the case) had simply got muddled about dates. However, the conversation understandably alarmed Mr. Simister, who on 23rd November sent formal instructions to Mr. Batcup "to advise on limitation periods in respect of all potential claims arising out of the conduct of this matter by [LL]". Ms. Carr asked me to note the word "all" in those instructions, but I think it most unlikely that Mr. Simister himself attached great significance to it: there is, in particular, no reason to suppose that he consciously had in mind the possibility of a claim arising from Mr. Leech's advice in October 1985.
- Mr. Batcup asked for a conference. That took place on 21st February 1994. According to Wellers' note, he started by identifying the "two aspects to the potential claim against [LL]", namely (1) the sums which had been secured by the Mareva and (2) Mr. Fox's liability in costs to the defendants in the Hanson action against whom the claim had been dismissed or discontinued. Those were of course essentially the claims identified in his original instructions of July 1991 (see para. 50 above), and it is clear that he regarded them as being the only matters in relation to which he was instructed: specifically, he did not regard the instructions to advise on "all" potential claims as requiring him to cast his net any wider. Presumably he had either forgotten Mr. Fox's raising with Mr. Wadsworth of a potential claim for negligent advice in October 1985 or he regarded that claim as having been put to rest by Mr. Wadsworth's negative advice. The conference appears to have been quite wide-ranging, and Mr. Fox did mention the events of October 1985; but there is no suggestion in the note that he sought to revive the possibility of a claim against LL in relation to the advice then given. Mr. Batcup gave some preliminary advice in relation to the two specific claims that he had identified, but since there was no suggestion being made to him that Mr. Fox had any claim arising out of the advice given in October 1985 he said nothing about the limitation period applicable to any such claim.
- Following the conference Mr. Batcup provided a written Advice dated 9th March 2004. Para. 1 of the Advice posed the question for consideration as being "the limitation period in relation to a claim against [LL] for negligence in relation to the dismissal of the Mareva injunction against Fontana". He advised that the earliest that time could start to run in relation to such a claim was 13th December 1989, being the date of the dismissal of the appeal against the discharge of the first Mareva (although in the conference he had expressed the view that it might run from run from the date of the original discharge, i.e. 21st July 1989). In the penultimate paragraph of the Advice Mr. Batcup said:
I confirm my earlier advice that at the present I do not feel that there are limitation difficulties in relation to the proposed negligence proceedings against Mr. Leech.
That is more generally expressed than the actual advice given in the preceding paragraphs. I think, however, that Mr. Batcup's approach was that the loss of the Mareva represented the only element in the claim which might give rise to concern: his understanding was that the first losses suffered from LL's conduct of the Hanson action did not occur until a good deal later. The reference to "my earlier advice" was no doubt to his advice at the conference where he did indeed (according to Wellers' note) advise that there was no limitation problem in relation to any claim for the mishandling of the Hanson action.
The formulation of the claim against LL
- Progress with the potential claim against LL remained painfully slow. This may have been at least partly because Wellers became concerned about whether they should continue to act in the light of Mr. Fox's complaints about their handling of the Hanson action (see para. 58 above). However, at a meeting on 6th February 1995 Mr. Simister and Mr. Fox discussed the LL claim, among other matters, and in particular a note prepared by Mr. Fox headed "Negligence Action against Lindars Leech Solicitors - Matters for the Statement of Claim". This identified four heads of claim. Nos. 2 and 3 were the familiar claims for the loss of the amount secured by the Mareva and Mr. Fox's liability for costs to the Hanson defendants; and no. 4 was a general claim for damages for distress. But head 1 was described as:
The loss of the settlement offer by Fontana Holdings Inc in 1985 which was rejected by reason of the recommendation of Mr. Alan Leech but which was revealed as being negligent advice made without due care and attention to the best interests of Mr. and Mrs. Fox.
Thus Mr. Fox was quite explicitly seeking to revive the lost settlement claim which he had first clearly adumbrated in his note for Mr. Wadsworth (see para. 55 above).[3] Again, the allegation of negligence is completely unparticularised, and the formulation "which was revealed as" may suggest that at least part of Mr. Fox's thinking, as in the ten-page note, may have been that the decision to reject the offer was only "wrong" because of Mr. Leech's subsequent incompetence. Nevertheless, it is on its face a clear allegation of negligent advice in October 1985. Mr. Simister's note states:
Mr. Fox appreciates that certain of the headings of the claim may already be time barred, such as the offer of settlement which Mr. Leech advised Mr. and Mrs. Fox to reject in 1985.
- That Mr. Fox understood that there was a limitation difficulty about the lost settlement claim is confirmed by a letter which he wrote to Wellers the following day. He referred to the fact that at the end of the meeting he had specified £200,000 as the minimum amount that he expected to receive from LL. He then said:
I would like to point out that I had hastily arrived at this figure after excluding that part of the Negligent Claim for the loss of the £445,000 settlement offer made by Fontana Holdings Inc in 1985 as I have to take account that this claim may unfortunately be considered "out of time".
However, if you are able to include this important section into the action, then of course the settlement figure could be substantially improved.
It does however appear from the latter paragraph that he retained a hope that the difficulty might not be insuperable.
- The language of Mr. Simister's note of the meeting of 6th February is ambiguous as to whether Mr. Fox was already aware of the limitation problem about the lost settlement claim or whether Mr. Simister pointed it out to him. The latter seems to me more likely, since, as has appeared from the foregoing narrative, there is no record of Mr. Fox having previously been given any advice about the limitation period applicable to such a claim; and it might be thought that he would not have included the claim in his note if he had believed it to be statute-barred (though that is by no means certain). Even, however, if the note is to be read as meaning that Mr. Fox was already alive to the limitation difficulty, it does not follow that he must have previously received specific advice on the question. He had had a good deal of advice on the limitation issues affecting other claims, and he would have been perfectly capable of applying the relevant principles for himself.
- On 30th June 1995 Wellers sent instructions to Mr. Batcup to settle a general indorsement for a writ against LL or (in view of the dissolution of the partnership) the partners as individuals, together with a draft Statement of Claim and an "Opinion on the extent of the claims, if any, which can be made against Alan Leech/Lindars Leech". It was believed – apparently preferring Mr. Batcup's advice in conference to his advice in writing – that time might have started to run on 21st July 1989. The instructions included the "Matters for Statement of Claim" document discussed at para. 62 above. They also included "an unsigned statement from Mr. Fox which confirms how the financial settlement of the claim against Rey/Hanson came to be refused, upon the advice of Mr. Leech in late 1985". This was a two-page document, clearly drafted by Mr. Fox himself, giving a rather fuller account of the events of October 1985 than had previously been given in the ten-page note or the document supplied to Mr. Wadsworth, though along similar lines. Like those, it did not make any explicit allegation of negligence. There is however a clearly detectable undercurrent of criticism, partly to the effect that Mr. Leech had been over-emphatic and overbearing in his advice but partly again to the effect that he had made promises about how he would proceed if the settlement did not go ahead on which he then failed to deliver. Although the Instructions did not explicitly ask Mr. Batcup to consider including in the writ, or to advise on, a claim that Mr. Leech gave negligent advice which resulted in the settlement being lost, I think that such a request could clearly be inferred from the terms of those enclosures, and most particularly from head 1 of "Matters for Statement of Claim". The events of October 1985 were not of course new to Mr. Batcup, and even though he might not previously have understood them to be within the scope of his instructions it should not have been a complete surprise to him to see the question which Mr. Fox had raised with Mr. Wadsworth being raised again with him. There had in fact been some previous discussion between Mr. Batcup and Mr. Simister about what he needed to be sent, and a note made by Mr. Simister on 15th June records Mr. Batcup asking for "confirmation of the advice as to the settlement which Mr. Fox refused". By one route or another, therefore, Mr. Batcup plainly understood that the lost settlement claim now came within the scope of his instructions.
- Mr. Batcup duly drafted a general indorsement in the following terms:
The Plaintiff's claim is for damages and interest thereon pursuant to Section 35A of the Supreme Court Act 1981, against the Second Defendants, a firm of solicitors, and the First Defendant a partner in the said firm for loss and damage for negligence and/or breach of contract as solicitors for the Plaintiffs, suffered as a result of negligent advice between 1985 and 1991 in proceedings eventually issued in the Chancery Division under Ch 1988 F No 2360 and in the Queens Bench Division under 1984 F No 18, on behalf of the Plaintiffs whereby inter alia the Plaintiffs:-
(i) Lost a settlement offered by parties to the litigation;
(ii) Sustained losses of fees paid to the Defendants and to counsel for an inadequately pleaded case;
(iii) Sustained losses for costs orders made against the Plaintiffs in favour of parties wrongly or negligently joined to the said actions at a time when the Plaintiffs should have had the benefit of being legally aided;
(iv) Failed to ensure the actions were proceeded with, with due diligence and expedition and in compliance with directions of the Court so that a Mareva injunction in the Queen's Bench action was discharged on the 21st July 1989 so that funds frozen were lost to the Plaintiffs;
(v) Failed to ensure the Plaintiffs were at all stages legally aided in the said proceedings
In my view, though it is (perfectly properly) wholly unparticular, in the light of Mr. Batcup's instructions as summarised above, head (i) can only have been intended by him to refer to negligent advice given by Mr. Leech in October 1985 leading to the loss of a settlement available at that time.
- A writ in those terms was issued against both LL as a firm and Mr. Leech as an individual on 19th July 1995. Both Mr. and Mrs. Fox were plaintiffs.
- Mr. Batcup was asked to produce a draft Statement of Claim and an opinion on the merits. He asked for a conference, which took place on 17th October 1995. The note of the conference is not very clear, but it seems that Mr. Batcup asked for further documentation, including in relation to the events of October 1985. The documents were not supplied until 29th March 1996: it is not clear exactly what they consisted of. As discussed below, a draft Statement of Claim was eventually provided in May 1996, but by that time Wellers had effectively ceased to act. The Solicitors Indemnity Fund ("SIF"), as LL's insurers, had been informed of the issue of the writ and had indicated that they were willing to grant the extensions necessary for a full Statement of Claim to be pleaded.
D. APRIL 1996 - MAY 1999: PRITCHARD JOYCE & HINDS
- As already mentioned, Wellers had for some time been concerned whether they could continue to act for Mr. Fox in view of the allegations which he was making about their conduct of the Hanson action. In May 1995 Mr. Gavin Hamilton of counsel had advised them that they should not; but it was agreed that in the interests of continuity they should remain instructed in the LL action until a writ had been issued and counsel had drafted a Statement of Claim. In August 1995 Mr. Fox asked PJH to accept instructions in the action against LL, but they indicated that they could not do so until legal aid was transferred, and it was confirmed that they should come into the case once the Statement of Claim had been drafted. In the event, no doubt because that took so much longer than had been anticipated, they took over somewhat sooner. Ms. Ispani of PJH attended a conference with Mr. Batcup and Mr. Fox on 25th April 1996, although Wellers remained involved for hand-over purposes and a formal transfer of the papers does not appear to have taken place until 19th May. Once the transfer occurred, conduct of the case was in the hands of Ms. Hartwell of PJH, who although she was herself a partner discussed the case on a regular basis with a more senior partner, Mr. Hinds.
- I should mention here that PJH instructed Mr. David Matthias of counsel to advise on possible action against Wellers. He saw Mr. Fox and Ms. Hartwell in conference on 14th December 1995 and 23rd January 1996 and advised about the possibility of a claim arising out of Wellers' conduct of the Hanson action: he advised that it would only be possible to get legal aid for such a claim if leading counsel could be found who would contradict Mr. Wadsworth's negative advice about the merits of the Hanson action. He was not asked to, and did not, advise about their handling of any potential claims against LL (though he confirmed that it would be inappropriate for Wellers to continue to act in that action). No proceedings were ever commenced against Wellers in relation to the Hanson action.
- It is, again, convenient to divide the narrative into two periods. The time limit for a potential claim against Wellers for failing to advise on the limit applying to the lost settlement claim expired at the end of October 1997. Thus the crucial period from the point of view of liability is between April 1996 and that date. Events after October 1997 are not directly material, but they remain relevant in so far as they cast light on the understanding of the parties in the earlier period.
April 1996 – October 1997
The Statement of Claim
- As noted above, Mr. Batcup had a further conference with Mr. Fox on 25th April 1996 to assist him in the drafting of the Statement of Claim. It appears from the note taken by Ms. Ispani that Mr. Fox covered, along with much else, the advice which he received from Mr. Leech in October 1985; and immediately after the conference he sent Mr. Batcup and PJH a witness statement from Mrs. Fox about her telephone conversation with Mr. Leech on 16th October 1985.
- On 7th May 1996 Mr. Batcup supplied a draft Statement of Claim accompanied by an Advice. The Advice did not, however, address the merits of the claim but was essentially confined to advising that the case merited the extension of legal aid for leading counsel to be instructed. A Statement of Claim conforming to his draft was served shortly afterwards.
- The Statement of Claim was arranged (after some introductory paragraphs) under two heads – "the Fontana Action", at paras. 7-22, and "the Hanson action" at paras. 23-44. I need not give any details of the matters pleaded under the latter head. As regards the former, the course followed by Mr. Batcup was as follows:
(1) At paras. 7-11 he pleaded the history of the Fontana action up to the service of the Defence.
(2) At para. 12 he referred in fairly general terms to the negotiations between SLP and TSW and the conclusion of a draft Agreement (to which it was said that the Plaintiffs would refer at trial). The sums payable under the Agreement – totalling £445,000 – were pleaded.
(3) Paras. 13-15 were in the following terms:
13. On the 15 October 1985 the First Plaintiff consulted the First Defendant for a second opinion as to the terms of the proposed Agreement and was advised in the clearest possible terms by the Defendant not to sign it. The Second Plaintiff was telephoned by the First Defendant during the course of the said meeting and given the same advice. The First Defendant represented he had years of experience with dealing with a man called Mr Rey and his associates, who ultimately controlled Fontana, and was aware of the tactics they might use to avoid payments under the proposed Agreement.
14. The First Defendant further advised the Plaintiffs that he was experienced in dealing with Mr Hanson, that he had experience in litigating against Mr Rey, who he described as a dishonest man, and that they would be intimidated by his approach. He advised he might be more experienced in dealing with these people that the person who had been handling their affairs.
15. The First Defendant drafted a letter dated 16 October 1985 for the First Plaintiff to send to SLP, requesting that the matter should be transferred to the First Defendant and the Second Defendant. SLP agreed and the Second Defendant thereafter took over representing the Plaintiffs.
(4) Para. 16 pleaded the legal aid position.
(5) At paras. 17-21 Mr. Batcup set out the subsequent history of the Fontana action culminating in the loss of the Mareva injunction, which rendered the further pursuit of the proceedings futile.
(6) Para. 22 made a general allegation of breach, supported by the following Particulars:
The First and/or Second Defendants:
i) Failed to prepare papers for Counsel and obtain Counsel's advice on the proposed terms of the settlement in accordance with the terms of the Legal Aid Certificate he had transferred to him;
ii) Failed to take any step in the Fontana Action from the moment he took over the case in October 1985 until Fontana applied for a discharge of the Mareva in July 1989;
iii) Failed to advise the Plaintiffs of the risk of delay and of discharge of the Mareva;
iv) Failed to act on the Opinion of Mr Wade of Counsel dated the 3 February 1989, who had been instructed by Thomas Boyd Whyte, solicitors, who the Plaintiffs had instructed between January and March 1989 (but which was shown to the First Defendant who continued to act for the Plaintiffs), that Legal Aid should be extended in the Fontana Action since the prospects of success were good and a Judgment could be enforced;
v) Continued to advise against acceptance of the settlement, but failed to secure a settlement better than that on offer totalling £445,000 or any settlement at all, which he had advised the Plaintiffs he would secure and which was the basis upon which, on his advice, they had instructed him and continued to instruct him;
vi) Failed to notify the Court before the 18 July 1989 that he was the solicitor acting for the First Plaintiff;
vii) Failed to seek any amendment to the Legal Aid Certificate, which was limited to negotiating a settlement and obtaining Counsel's Advice.
Para. 45 pleaded the Plaintiffs' damage. Heads (iii)-(viii) were concerned with the Hanson action. The only quantified items amounted to some £67,000, though there were some unquantified heads of doubtful value. Heads (i) and (ii) were as follows:
(i) Loss of US$180,000 damages in the Fontana Action 1984-F-no. 1810
(ii) Further or in the alternative loss of £445,000 in settlement of the said Fontana action.
- There was considerable debate before me as to whether, or in what sense, that pleading raised the lost settlement claim as defined at para. 44 above. This is not straightforward. The structure of the pleading is somewhat disjointed. Paras. 13-15 set out in some detail the advice which Mr. Leech is said to have given, and it would be natural to expect that they were leading up to an averment that that advice was negligent. But there is no such pleading in the Particulars of Negligence at para. 22. The nearest approach to it is sub-para. (v). That, however, is not an allegation that the pleaded advice was negligent but that it was negligent to "continue" to advise against settlement: no averment of any such continuing advice is in fact pleaded, but in any event it does not appear to be a reference to October 1985. Rather, the thrust of the sub-paragraph appears to be that Mr. Leech failed, having advised Mr. Fox against accepting the original settlement, to obtain a better one: this echoes Mr. Fox's approach in the ten-page note (cf. para. 48 above). Further, although para. 45 (ii) pleads the "loss of £445,000 in settlement of the … Fontana action", there is no pleading of how or when that loss occurred: neither any rejection of the offer by Mr. Fox or LL nor the withdrawal by TSW is pleaded. Presumably some connection is to be inferred between the breach of duty pleaded at para. 22 (v) and the pleaded loss of the settlement, but what that connection might be is left unstated. There is an additional oddity, namely that, to the extent that the lost settlement claim is pleaded at all, it is treated as an aspect of "the Fontana action", whereas if the £445,000 had indeed been paid the lion's share would have represented the value of the claims subsequently advanced in the Hanson action. Mr. Batcup in his evidence before me emphasised that he had structured the pleading in the way that he had advisedly.
- I do not believe that the Statement of Claim raised, or was intended by Mr. Batcup to raise, an overt claim that the advice given by Mr. Leech in October 1985 was negligent, or that the settlement offer represented by the draft Agreement was lost as a result of that negligent advice. I believe that Mr. Batcup intended only overtly to plead a claim along the lines of the ten-page note - that is that, having advised Mr. Fox to reject the offer, Mr. Leech was under a duty to achieve a better result by progressing both the Fontana and Hanson actions, and that he failed to do so. That pleading may not be entirely logical, since Mr. Leech would have been under a duty to handle both claims competently whether or not he had advised rejection of a settlement previously offered, but one can see how, that fact might be said, at least rhetorically, in some way to intensify his obligations. And the "lost" amount of the offer would remain relevant on this basis as a measure of the amount lost by LL's negligence.
- However, Mr. Batcup would – and in any event certainly should – have been aware that the case as so pleaded fell short of the claim that Mr. Fox wished to advance, i.e. a case of negligent advice in October 1985 leading to the loss of the offer at that time. That would (or should) have been apparent to him from head 1 of Mr. Fox's "Matters for Statement of Claim" note, possibly reinforced by the further discussion in the two conferences which he had had (see paras. 68 and 72 above); and such a claim was indeed made in the general indorsement. He would of course also have been aware that any such claim was prima facie statute-barred. It is true that he had never clearly been asked to advise on that question, nor had he done so; but the point was as plain as a pikestaff. In my view the explanation for the somewhat fuzzy formulation of the pleading is that Mr. Batcup had decided that to plead the lost settlement claim in overt terms would inevitably flag up that it was statute-barred, but that he could in practical terms keep it in play by pleading the essential facts as if they were material to a loss which continued beyond July 1989: that is indeed broadly the explanation that he himself gives in his first witness statement (see para. 38) and repeated in cross-examination. It is clear from the various contemporary attendance notes that Mr. Batcup was, entirely reasonably, expecting SIF to make an offer at a fairly early stage; and it was avowedly his tactic to plead the case as widely as possible, in the knowledge that parts might have to be jettisoned in due course. It was particularly important to advance a claim to the £445,000 if at all possible, since the other quantified elements in the claim amounted to less than half that amount.
The pleading of the limitation point
- A Defence on behalf of Mr. Leech was served by Wansbroughs Willey Hargrave ("WWH"), instructed by SIF, on 11th September 1996. Mr. Lindars, the other partner in LL at the material time, had not been served, and the Defence was accordingly only served on behalf of Mr. Leech. Wholly unsurprisingly, para. 1 of the Defence pleaded that any cause of action arising prior to 19th July 1989 was statute-barred. It appears that WWH had had at least some instructions from Mr. Leech. The averments in paras. 12-15 of the Statement of Claim were pleaded to with some particularity. Among other things, it was denied that Mr. Leech had advised Mr. Fox "in the clearest possible terms" not to sign. Those advising Mr. Leech seem to have taken the view, whatever the obscurities of the Statement of Claim, that his advice in October 1985 was being alleged to have been negligent: it was positively averred in the Defence that the advice was correct and, further, that Mr. Fox had decided to reject it in any event because he put the value of his claim at between £1m. and £2m.
- On 11th September 1996 Ms. Hartwell had a preliminary discussion of the Defence with Mr. Fox. According to her note, he told her that he was not troubled by the limitation defence because counsel had already advised "in the clearest possible terms" that his claim was not statute-barred. Mr. Fox can only have been referring to Mr. Batcup's advice in February and March 1994: see paras. 60-61 above. As I have there made clear, that advice did not relate to the lost settlement claim. Either Mr. Fox had forgotten that or he was referring only to the claims for mishandling the Fontana and Hanson actions – which, after all, were the only claims clearly pleaded. He had of course as recently as the previous year acknowledged the limitation difficulty relating to any claim for the loss of the settlement in October 1985 (see para. 63 above).
- On 19th September 1996 Ms. Hartwell and Mr. Fox had a further meeting to discuss the terms of the Defence in detail. In commenting on para. 11 of the Defence, which made it clear that LL had seen a version of the draft Agreement which referred to the involvement of SV, Mr. Fox said that "until relatively recently" he had only been aware of "the original draft" – i.e. the draft providing for the bills to be guaranteed by UBI – and that although he now realised that Mr. Lines had negotiated a "second draft" with Mr. Thomas and had sent that draft to LL, neither Mr. Lines nor Mr. Leech had informed him of those changes or sent him the draft. He said that, "having now seen the second draft of the Agreement, both Mr. and Mrs. Fox felt that they would have accepted the same with the amendments which had been incorporated".[4] Mr. Leech, he said, had never advised him on the second draft. This was simply wrong. As set out at paras. 16-20 above, Mr. Fox was kept fully in the picture by Mr. Lines, who had sent him both the "third" draft Agreement as settled by Mr. Grey[5] and the "fourth" version, being the version of the third draft annotated following his later conversation with Mr. Thomas; and it was indeed Mr. Fox who had supplied both versions to Mr. Leech. There is no reason to believe that Mr. Fox was deliberately telling an untruth: it would be wholly unsurprising if, almost fourteen years later, he had forgotten the precise sequence of events.
- On 30th September 1996 Ms. Hartwell sent Instructions to Mr. Batcup to draft a Reply. These enclosed Ms. Hartwell's attendance note of the instructions obtained from Mr. Fox. The body of the Instructions drew attention specifically to what Mr. Fox said about not having seen a copy of the revised draft: Ms. Hartwell had not at that point analysed the documents to see whether they supported what she was being told. The instructions also enclosed a copy of Mr. Batcup's advice of 25th March 1994 on (aspects of) the limitation issue (see para. 61 above).
- Mr. Batcup was engaged in a trial outside London at the time, but WWH were unwilling to grant any long extension. In the event, he had to consider the papers and provide a draft overnight. The Reply as so drafted was served on 23rd October 1996. Two substantive answers to the limitation point were pleaded:
(1) It was averred that Mr. Fox did not have the necessary knowledge for the purpose of s. 14A of the Limitation Act 1980 until after 19th July 1989.
(2) Mr. Batcup pleaded s. 32 (1) (b) and (c) of the 1980 Act – i.e. deliberate concealment and mistake.
In support, apparently, of both points Mr. Batcup relied on Mr. Leech's alleged failure to tell Mr. Fox about the revised draft of the Agreement. Para. 4 of the Reply reads as follows:
The Plaintiffs were unaware until on or about the 14th September 1996 that the First Defendant had received a second draft of the Agreement (referred to in paragraphs 12 and 13 of the Statement of Claim herein) which had resulted from further negotiations between Mr Lines of SLP and Mr Thomas of Titmuss Sainer & Webb on the 15th October 1985. They believed the advice they received was as to the first draft and were denied the opportunity of considering and accepting the terms as amended.
- Although Ms. Carr submitted that Mr. Batcup's decision to plead each of these points betrayed an inadequate understanding of the relevant law and was indeed (because it involved an allegation of bad faith against Mr. Leech for which he had insufficient support) unprofessional, I need not for present purposes decide whether those criticisms are well-founded. The important question is what the formulation of the Reply shows about Mr. Batcup's understanding of the claim and about the limitation position. As a matter of strict pleading the Reply could not raise any new claim: it did, and could do, no more than aver matters relevant by way of answer to the limitation defence. But the very fact that Mr. Batcup pleaded the matters which he did necessarily implies that he believed that there was a claim in respect of which it was arguable that time expired before 19th July 1989: otherwise the whole pleading was redundant. In fact, because of the way in which the Statement of Claim had been pleaded (as discussed above), what that vulnerable claim was is nowhere explicitly stated. But given that, by definition, it was a claim where the loss had crystallised before 19th July 1989, it could only in practice be a claim for negligent advice leading to the "loss" of the settlement offer at some point prior to that date; and, although no date for that loss was pleaded it could only have occurred at the date when the offer was withdrawn or rejected. That analysis is indeed confirmed by the terms of para. 4 of the Reply, which pleads that Mr. Leech's concealment of the revised draft had denied Mr. and Mrs. Fox the opportunity to accept the offer (which can only be a reference to late October 1985). Accordingly, therefore, the terms of the Reply confirm that Mr. Batcup was in late 1996 hoping, by one means or another and despite the absence of any explicit pleading, to advance the lost settlement claim: he appreciated that that claim was prima facie statute-barred, but it now appeared that there was a possible answer to the limitation defence.
- It should be noted that Mr. Fox's instructions about the concealment of the revised draft of the Agreement not only, if they were right, gave a possible answer to the limitation defence but reinforced the primary claim. The alleged concealment of the revised draft would be either a breach of duty in its own right or in any event a further particular of a general allegation of negligent advice. It had not been formally pleaded as such, but it was at least now pleaded as a fact, which might make it more difficult for LL later to complain about the absence of any proper pleading in the Statement of Claim. That said, the lost settlement claim was advanced long before those instructions were given and was not dependent on them.
- WWH had also served a Request for Further and Better Particulars. Ms. Hartwell drafted the response herself, without reference to Mr. Batcup. It was served on 15th November 1996. She, like Mr. Batcup in the Reply, relied on Mr. Fox's instructions about not having seen the revised draft of the Agreement. In response to request 3 - which asked, in relation to sub-para (ii) of the Particulars under para. 22 of the Statement of Claim, what steps it was said that Mr. Leech should have taken - she pleaded (at 3.3) as follows:
The first step which the First Defendant should have taken after assuming responsibility of the Plaintiffs' litigation on 16th October 1985 was to have placed himself on the Court Record as acting for the Plaintiffs and to have served Notice of Acting upon TSW. At the same time, the First Defendant should have immediately applied for a transfer of the Plaintiffs' Legal Aid Certificate and thereafter should have filed the Amended Legal Aid Certificates with the Court and served Notice of Amendment upon TSW. After the Plaintiffs had disinstructed their former solicitors SLP on or around 16th October 1985 the First Defendant received from SLP a substantially revised form of the proposed form of Agreement to be entered into between Mr Fox and Fontana Holdings Inc. The revised terms had been negotiated between Mr Lines of SLP and Mr Thomas of TSW in a telephone conversation on 15th October 1985 and were incorporated in a second draft Agreement.
The First Defendant failed to notify the Plaintiffs of the terms of the second draft Agreement or to submit a copy of the same to the Plaintiffs for their consideration. The revised terms of the Agreement dealt with the defects which had concerned the First Defendant on 15th October 1985 and which had caused the First Defendant to advise the Plaintiffs to reject the terms of the original draft Agreement. The First Defendant never advised the Plaintiffs of the existence of the second draft Agreement, the terms of which were acceptable to the Plaintiffs, and upon which they could have proceeded to reach a negotiated settlement with Fontana Holdings Inc.
Furthermore, in a letter the First Defendant wrote to the Plaintiffs on the 23rd October 1985 and, in addition, a letter that the First Defendant prepared, drafted and instructed the Plaintiffs to send to the Law Society on the 19th December 1985, the First Defendant made no reference at all to the revised form of Agreement and improved terms and concentrated on quoting the terms contained in the first draft of the Agreement as a justification for the advice which he gave to the Plaintiffs on the 15th October 1995.
The First Defendant, upon receiving instructions to act for the Plaintiffs, should have taken steps to conclude the terms of the proposed Agreement to be entered into between Mr Fox and Fontana Holdings Inc. to the best possible advantage of the Plaintiffs.
Request 26 asked, in relation to head (ii) in the claim for damages under para. 45:
Of ".......loss of £445,000 in settlement of the Fontana Action":
26.1 State whether it is alleged that the First Defendant should have advised the Plaintiffs to accept that sum in settlement of the Fontana Action; and
26.2 If so, state whether it is alleged that the £445,000 would actually have been paid and, state all facts and matters relied on in support of the allegation.
Ms. Hartwell's response was in the following terms:
Reply
26.1 The Plaintiffs were content to accept the sum of £445,000 in settlement of the Fontana Action provided that the terms of the Agreement between the parties could be concluded to the Plaintiffs' satisfaction. The First Defendant failed to advise the Plaintiffs of the revised terms of the Agreement which had been negotiated on 15th October 1985 or to give the Plaintiffs the opportunity to accept the same.
26.2 The Plaintiffs believe that the payments set out in the revised form of the Agreement (of which they were unaware) would have been made, as the initial payment of £125,000 was to be made by banker's draft directly to the First Plaintiff's solicitors (Stoneham Langton & Passmore) and the subsequent payments totalling £320,000 were to be made by Bills of Exchange to be deposited with Swiss Volksbank and which were to be guaranteed by Swiss Volksbank in the event that Fontana Holdings Inc. was unable to effect payment.
- Whether or not Ms. Hartwell so understood it, the particulars under Request 3 were in practice for the first time explicitly alleging a breach of duty by LL in October 1985; and, although this was not quite explicit, the particulars under Request 26 implied a loss crystallising at or about that time. They went some way therefore to repairing the deficiencies of the Statement of Claim, though it would have been open to Mr. Leech to object that they were not so much a particularisation of the existing pleading as a fresh head of negligence.
The application for a preliminary issue and the instruction of Mr. Susman
- On 30th April 1997 WWH informed PJH that they proposed to apply to strike out those parts of the Statement of Claim which were statute-barred. By letter dated 15th May PJH asked Mr. Batcup to advise whether the views on limitation expressed in his Advice of 24th March 1994 remained unchanged. This formulation reflected a failure on the part of Ms. Hartwell to appreciate that that Advice had not dealt with the totality of the matters sought to be covered (albeit rather unsatisfactorily) in the pleadings now served on behalf of Mr. Fox. There was a preliminary telephone discussion on 16th May between Ms. Hartwell and Mr. Batcup. Ms. Hartwell's note contains a record of Mr. Batcup saying:
… the one concern to me was the "lost settlement" – did we actually lose ? This was put in the alternative – deliberately … Mr. Batcup cannot see how the Fontana action element could be deleted – the "loss" didn't crystallise until after the Mareva was discharged … .
There was a dispute on the evidence before me as to whether in the course of the conversation Mr. Batcup told Ms. Hartwell that he was concerned that the lost settlement claim might be statute-barred. Mr. Batcup believes that he did but Ms. Hartwell believes that he did not. The note is too cryptic to help resolve the matter. Since it is clear that Mr. Batcup was plainly alive to the problem and Ms. Hartwell was soon made aware of it if she was not already (see para. 90 below), I do not believe the dispute is of any real significance. If it were necessary to resolve it, I would think it more likely that Mr. Batcup did indeed mention his concerns. The principal advice given by Mr. Batcup in the course of the conversation was that leading counsel should be instructed. In a further telephone conversation on 8th July he repeated that advice. Ms. Hartwell's note records him saying that "negligence would not crystallise until there had been applications to strike out". That is, again, too obscure to shed any light on what Mr. Batcup may have been thinking about the merits of the limitation defence as it affected the lost settlement claim. Mr. Batcup did not in fact ever supply any written advice pursuant to PJH's instructions of 30th April.
- It was not until 16th July 1997 that WWH made good on their threat to issue a summons, which in the event applied not for a strike-out but for a preliminary issue on the question of limitation. The supporting affidavit proceeded on the basis that part of the pleaded case against Mr. Leech was a claim of negligent advice in October 1985 leading to the loss of the settlement offer; and it was pointed out that the offer was withdrawn on 28th October 1985. As in the Defence, therefore, WWH clearly understood Mr. and Mrs. Fox, notwithstanding the opacity of their pleadings, to be advancing the lost settlement claim.
- PJH obtained authority from the legal aid board to instruct Mr. Susman to resist the application for a preliminary issue. (This seems to have been on Mr. Batcup's recommendation: Mr. Susman had been his pupil-master.)
- Mr. Susman advised in consultation on 22nd August 1997. There survive both his own note made in preparation for the consultation (though possibly subject to some limited revision following it) and Ms. Hartwell's note. It is not possible – but, fortunately, nor is it necessary - to reconstruct from these every detail of his advice. It is right to bear in mind that the main focus of the consultation was Mr. Leech's pending application rather than the ultimate prospects of the action, and definitive advice on the merits was not required: Mr. Susman had indeed not been sent the full papers available to PJH. Subject to that, I need to note the following points:
(1) It seems, in particular from Mr. Susman's note, that he understood the "essence" of the claims pleaded at paras. 7-22 of the Statement of Claim to be that "the Defendant was instructed because he indicated that he could procure a better offer, but he failed to do so, and failed to progress the action at all". That of course broadly reflects my own analysis of the pleading (see para. 76 above): it does not cover any claim that Mr. Leech's advice in October 1985 was itself negligent. His advice was that the claim as so understood ought not to be held to be statute-barred because damage would not crystallise until the Fontana and/or Hanson actions collapsed.
(2) It seems, however, that Mr. Susman at least considered the possibility of a claim based on negligent advice in October 1985. He is recorded in Ms. Hartwell's note of the consultation as saying:
1985 ? contractual lim. Has well expired. Would need to commence by 1991. ? contract lim. gone.
It is hard to make sense of that statement except on the basis that Mr. Susman was addressing, however parenthetically and briefly, a claim that the advice given by Mr. Leech in October 1985 was negligent. There is nothing surprising about his doing so, given the terms of the Reply and of the Further and Better Particulars which he will have seen.
(3) Ms. Hartwell also notes someone – apparently either Mr. Susman or Mr. Batcup – saying:
Loss of deal (Fontana) – one view that this had long since gone
The natural interpretation of this is that it is at least well arguable that any claim based on the loss of the settlement offer was now statute-barred.
(4) There was some discussion of the terms of the settlement offer made by the Hanson interests in October 1985 and of the different drafts. The discussion was in the context of the "knowledge" and s. 32 answers to the limitation point pleaded in the Reply. The note is not explicit as to what the cause of action which those answers might or might not "save" was understood to be.
(5) Mr. Susman is recorded in Ms. Hartwell's note as giving his view that there was a "good claim for £70k – but highly speculative [claim] for the alleged half a million". The "half a million" is a reference to the £445,000 settlement offer. Read by itself that need not be a reference to the lost settlement claim, since the settlement amount had been pleaded by Mr. Batcup as a measure of the value of the lost Fontana action; but in the context of the earlier references it seems more likely that the lost settlement claim was being referred to. If so, the note does not state why Mr. Susman described it as "speculative"; but the most obvious problem about it was that it was prima facie statute-barred, and Mr. Susman had not been asked, or put in a position, to advise definitively on the merits of the claim.
In my view it is clear from those references that Mr. Susman, and Mr. Batcup and Ms. Hartwell, understood that the lost settlement claim in the sense that I have defined it at para. 44 above was part of the claim that Mr. Fox wished to pursue.
- Mr. Susman advised that he expected that the application for a preliminary issue on limitation would be refused. The broad tactic was both to attempt to show that there was no good limitation defence but also to demonstrate that, even if such a defence was arguable in respect of part of the claim, that there would be no saving in time in having that issue determined separately.
The collapse of the concealment argument
- Following the consultation, Mr. Susman drafted an affidavit for Ms. Hartwell to swear in opposition to LL's summons. This set out the facts relied on by Mr. and Mrs. Fox, including those relevant to the alleged concealment: in particular, it gave Mr. Fox's account of never having seen any revised version of the Agreement involving SV. As regards the nature of Mr. Fox's claims, the affidavit followed closely the approach of the Statement of Claim, characterising the negligence complained of as being LL's negligence in pursuing the Fontana and Hanson claims from 1985 to 1981. Loss was only said to have been suffered "in 1991 when the Mareva injunction in the Fontana action was finally discharged, because it was at that point of time that the Plaintiffs lost the chance of compromising all their claims for £445,000" (para. 15). That formulation slurs some difficult questions, but no doubt that was tactically wise. The affidavit also relied, "in the case of the loss of the opportunity to settle for £445,000", on the alleged concealment by LL of "the improved offer" (para. 16): although logically that plea was only necessary if the cause of action had expired prior to 19th July 1995, which on the case as advanced in para. 15 it had not, there is nothing in the affidavit to suggest that a case was being put on the basis of negligent advice in October 1985 (and the loss of the settlement offer at that time).
- In response to Ms. Hartwell's affidavit WWH pointed out, initially in correspondence but subsequently by affidavit, that Mr. Fox's account of never having seen the revised version of the Agreement was demonstrably untrue, for the reasons given in para. 80 above. This had not previously been appreciated by either PJH or counsel. It did not, fortunately, prevent them from successfully resisting LL's application, which was refused by Master Leslie on 15th October 1997. But Mr. Susman advised that it was necessary to get to the bottom of the point as soon as possible. PJH tracked down Mr. Lines of SLP, who was now retired. They appear to have spoken to him first on 21st October. Having considered the papers, he telephoned Ms. Hartwell on 4th November to say that he was quite sure that Mr. Fox had seen the relevant draft of the Agreement and that there was no question of concealment; but he also expressed the view that an acceptable settlement was achievable and that negotiations with TSW should have been pressed to a conclusion. By this date, the limitation period for any claim against Wellers had expired, but it is convenient to complete the story of Mr. Lines's involvement. Mr. Fox at first disputed what Mr. Lines said, but PJH asked Mr. Lines to prepare a full statement. This, when finalised in March 1998, showed quite irrefutably that Mr. Fox was wrong, and he was constrained finally to accept (albeit not without some qualifications and subsequent backsliding) that that must be the case. The statement also, however, asserted in clear terms Mr. Lines's view that if SLP's instructions had not been withdrawn the remaining documentation – including, crucially, the guarantee from SV – would have been finalised and the settlement agreement concluded. He emphasised that he believed that Mr. Fox was, subject to those points, willing to settle and that such a settlement would have been in his interests.
- At no point in this period did either PJH or the Defendants advise Mr. Fox about whether he had any claim against Wellers for failing to advise him of the time limits applicable to the lost settlement claim, or that time to bring such a claim against Wellers would prima facie expire at the end of October 1997. I defer consideration of whether that omission was negligent.
November 1997 – May 1999
- As noted above, the events of this period are not as such material to the issues which I have to decide, but I need to deal with them to the extent that they cast light on the thinking of the parties during the period up to the end of October 1997.
- On 24th November 1997 Ms. Hartwell telephoned Mr. Susman to discuss a problem which had arisen with Mr. Fox, who was asking PJH to instruct Mr. Lines not to speak to WWH and also seemed to be wanting to influence the substance of his evidence. Because the issue was evidently a delicate one Mr. Susman made a note of his advice immediately after the conversation. He gave some (entirely proper) advice about how that problem should be dealt with. But he then went on to say something about the impact of Mr. Lines's evidence on the merits of the claim. His note reads:
I said that even if Mr. Leech did not conceal the offer from Mr. Fox, the allegation remained that Mr. Leech advised him not to accept it. That was the originally pleaded case, and in my view remained a good case of negligence.
That characterisation of the claim is inconsistent with Mr. Susman's earlier analysis of the "essence" of the case (see para. 90 (1) above) because it appears to treat the "originally pleaded case" as focusing not on LL's failures between 1985 and 1991 but on the advice given by Mr. Leech in October 1985. It is fair to bear in mind that Mr. Susman was writing this note without access to the papers (although the hearing had only been some six weeks previously). It was also written currente calamo and it may be no more than an ill-expressed version of the point that, having advised Mr. Fox to reject the offer, LL were under a duty so to handle the litigation as to secure a better offer. But on balance I think that it evidences a recognition on the part of Mr. Susman that Mr. Fox regarded Mr. Leech's advice in October 1985 as negligent and that that allegation, however ambiguously pleaded, was one which was intended to be advanced in the action so far as possible. That is consistent with the comments recorded from the consultation on 22nd August (see para. 90 (2)-(3) and (5)) and – as will appear – with how Mr. Susman in due course sought to present the claim at trial.
- As the action against Mr. Leech proceeded towards trial, there was discussion from time to time between Ms. Hartwell and Mr. Fox about the merits of the claim and what might be an appropriate amount for which to settle. Mr. Fox believed that he should recover over £1 million. Ms. Hartwell advised him that he was unlikely to recover anything like that amount and referred to limitation difficulties. On two occasions, in June and again in August 1998, Mr. Fox told her that he thought that she was being over-pessimistic about limitation, but that if she were right he would then have a good claim for negligence against Wellers for having failed to issue proceedings against LL in time; and he raised the issue with her again in April 1999. It is unnecessary, in the light of the issues which I have to decide, to try to analyse precisely what limitation difficulties either Ms. Hartwell or Mr. Fox had in mind.
- Trial of the action against Mr. Leech was fixed for 13th April 1999. Mr. Susman and Mr. Batcup were instructed. It had by that stage become clear that WWH were not going to be able to adduce any evidence from Mr. Leech himself: he had "gone to ground". There was a consultation on 6th April. Ms. Hartwell made a reasonably full note of the consultation, but it is not at all points possible to work out exactly what was being said. However I need only focus on the points of relevance to the present claim. Mr. Susman made it plain that he had not at that point had the chance to read the papers in full. He said that while in 1997 he would have advised settlement at £100,000 he was now more optimistic because of (a) the "excellent" statement which had been obtained from Mr. Lines and (b) "Mr. Leech's disappearance". It should be noted that at least the first of those factors would appear to be relevant only to the lost settlement claim: Mr. Lines's evidence did not go to any other point (save the concealment issue, on which it was extremely unhelpful). Mr. Susman then proceeded to examine Mr. Fox's various causes of action. One variant which he considered was a claim that LL "did not get you the deal in 1985"; and he advised, inevitably, that in respect of such a claim Mr. Fox "should have sued in 1991" and that it was accordingly statute-barred, subject to the s. 32 points which now seemed hopeless on the facts. As regards the causes of action based on LL's mishandling of the Fontana and Hanson actions, he thought the prospects were good, though the amount of the damages would be much less than the £1m. which Mr. Fox sought. He did however warn of the risk that the claim might fail in its entirety; and it seems, though this is less clear, that that warning was at least in part on the basis that there might be a limitation defence to the whole action. In the course of a general discussion of an appropriate settlement figure Mr. Susman warned that there was no guarantee that Mr. Fox would recover anything. He said, according to Ms. Hartwell's note:
If it goes wrong and you get nothing ? that will be the end of it. No appeal.
Unless you have some hope with Wellers ? will lose everything
Emphasise the fact that you may get nothing
Mr. Susman accepted in cross-examination that the reference to "some hope with Wellers" was plainly a reference to the possibility of suing Wellers for failing to advise him to issue proceedings earlier in relation to the parts of the claim that were statute-barred, i.e. the lost settlement claim. Even if the reference was brief it will have come as no surprise to Mr. Fox, who had of course already discussed with Ms. Hartwell having to sue Wellers if he lost on a limitation point (see para. 97 above).
- In the event the date of trial was postponed to 4th May 1999. Mr. Susman prepared a written opening. This can be analysed, so far as necessary for present purposes, as follows:
(1) The opening sets out the background to Mr. Fox's claims against the Hanson interests, the settlement discussions of October 1985 and Mr. Leech's advice. It then says, at para. 20:
It is therefore Mr and Mrs Fox's case that in the circumstances outlined the scope of the obligation that Mr Leech owed to them was:-
20.1 an immediate obligation to exercise reasonable skill and care in advising them whether the draft Agreement settled by counsel … and/or the revisions of it later agreed between solicitors … constituted a satisfactory comprise of their Claims, with adequate safeguards of the payment to them of the four further instalments of £80,000 each;
20.2 an immediate obligation to spend a reasonable time making a reasonable effort trying to achieve a better offer while taking reasonable steps to try to keep the existing draft Agreement open for acceptance in case no better offer was made;
20.3 if all else failed, a continuing obligation at least to pursue the existing Fontana Action with reasonable diligence (which Mr Leech in effect promised to do …);
20.4 a continuing obligation to exercise reasonable skill and care in relation to the formulation and pursuit of any other claims.
(2) The opening proceeds, under the heading "Negligence", to allege that "Mr. Leech was in breach of duty in each of those respects", sc. the four obligations identified at 20.1-20.4. Para. 22 sets out the breach alleged of the first obligation, as follows:
The compromise proposed by the Hanson Interests fairly represented the value of the Claims, and Swiss Volksbank's acceptance and/or guarantee of payment of the bills of exchange was an adequate safeguard for Mr and Mrs Fox, and Mr Leech should have told them so.
(3) Paras. 23-26 go on to allege breaches of the other obligations – specifically, that Mr. Leech never tried to obtain a better offer (para. 23) and that he failed to pursue the Fontana and Hanson actions with reasonable diligence (paras. 25 and 26).
(4) Paras. 28-30 deal with damages. Para. 28 sets out the loss suffered as a result of the mishandling of the Fontana action. It points out that $181,000 had been caught by the Mareva and that Mr. and Mrs. Fox
… would have recovered at least that sum, because the compromise offer of £445,000 in 1985 is the best evidence of the value of Mr. and Mrs. Fox's claims against the Hanson Interests.
(That seems something of a non sequitur because the Fontana action was not concerned with the wider claims against the Hanson interests; but Mr. Susman was perhaps trying to follow the pattern of the Statement of Claim, where this confusion first arose.) Para. 28 then proceeds:
It is conceded that Mr. and Mrs. Fox cannot now recover in this respect damages of as much as £445,000, or of more than US$181,000. Mr. and Mrs. Fox are, however, entitled to recover damages of that sum ... .
(5) The way that that concession is phrased suggests that Mr. and Mrs. Fox might once have been entitled to recover £445,000 in relation to the Fontana action but "now" could not. This is somewhat opaque. It is not clear on what basis it was being said that Mr. and Mrs. Fox could ever have recovered £445,000 in relation to the Fontana action. The most probable explanation is that the reference is to the case that Mr. Leech's negligent advice in October 1985 had led to the loss of the settlement offer. It is true that the preceding paragraphs of the Opening had not unequivocally made such a claim, but paras. 20.1 and 22 had come very close to doing so. On that basis the "now" presumably reflects a recognition that such a claim was statute-barred.
(6) Paras. 29-30 set out the loss suffered in relation to the Hanson action. This amounted to some £62,000. There was also a claim for an indemnity against any further costs liabilities which might yet accrue to Mr. Fox from the Hanson action (which, though moribund, had not been formally disposed of).
(7) Para. 31 deals very shortly with the question of limitation by asserting that Mr. and Mrs. Fox suffered each of the losses suffered no earlier than 19th July 1989. No attempt was made to rely on the s. 32 points: on the way that the case was now put there was indeed no need to do so.
- The effect of the opening was thus (a) to allege – for the first time explicitly - that Mr. Leech had been negligent in advising Mr. and Mrs. Fox not to accept the settlement (see in particular para. 22 of the opening); but (b) not to claim any damages resulting from that negligent advice; and (c) explicitly to abandon the pleaded claim to damages by reference to the £445,000 "lost" offer. This approach was the result of some careful and anxious reconsideration by Mr. Susman. He saw no real prospect of recovering on the lost settlement claim: quite apart from any view as to its substantial merits, it was plainly statute-barred. He was also concerned that raising any claim which required reliance on the s. 32 points would be highly damaging to Mr. Fox's credit, since his pleaded account of what versions of the draft he had seen was demonstrably wrong; and there were also hints from WWH that if Mr. Leech was shown, as alleged, to have acted dishonestly in concealing documents SIF would not indemnify him. He believed that it was best to focus attention away from the £445,000 altogether and concentrate on the remaining claims. Given that he was thus abandoning the claim to the £445,000, it may seem odd that he nevertheless came out unequivocally with the claim that Mr. Leech's advice had been negligent, but it appears that he (understandably) thought that there was prejudicial value in criticising Mr. Leech's advice.
- A draft of Mr. Susman's proposed opening was discussed in consultation on 19th April 1999. Mr. Susman summarised his advice, as regards the lost settlement claim, as follows (as recorded in Ms. Hartwell's note):
He had viewed all aspects of the limitation period and felt that we were on extremely difficult ground in persuading the Judge that the element of the claim relating to the compromise agreement had been brought within the limitation period. This would be an uphill struggle from the start. He placed the percentage chance of success of arguing this as 5%/95% against us.
He said that he would much rather put the Judge in a clear frame of mind by confirming that we were only pursuing that element of the claim where, in his view, there could be no doubt with regard to the limitation period and he felt that this would be a lot easier for the Judge to deal with. His advice therefore was that we should go for a smaller amount and forget the compromise agreement.
After considerable discussion Mr. Fox accepted that advice and accordingly that the opening should be lodged.
- Mr. Susman also produced a single-page document headed "Calculation of settlement offer" which he proposed to give Mr. Leech's counsel for the purpose of settlement. This put the "100% value" of the claim, including interest, at £311,329 but proposed a 25% discount to produce an ultimate settlement offer of £230,000 (plus the indemnity referred to at para. 99 (6) above).
- On the morning of the trial SIF increased their offer to £150,000 plus costs. Mr. Susman, believing that this was in the circumstances a very good offer (as indeed it would seem to have been), advised Mr. and Mrs. Fox to accept. They did so.
- Although the reference in the note of the consultation of 6th April is the only documentary reference to the Defendants identifying a possible claim against Wellers, it was in fact the evidence of Mr. Susman that he and Mr. Batcup did discuss the possibility of such a claim at about this time. At para. 45 of his witness statement he said:
I remember that Mr. Batcup and I discussed about this time, probably after the consultation on 19 April 1999, but certainly before the trial date of 4 May 1999, the question whether Wellers should have been sued before the end of October 1997 for failing to sue Mr. Leech before the end of October 1991 for negligently advising Mr. Fox not to accept a compromise effectively guaranteed by Swiss Volksbank. I also remember that at that time I did not consider this to be a matter of great concern.
He went on to give his reasons for that unconcern, which were essentially that he did not believe that the Hanson interests ever meant to settle, so that nothing had really been lost. In cross-examination he amplified his evidence about this conversation a little, but also corrected what he had said about the likely date. His evidence was as follows:
I remember a conversation with Mr Batcup in chambers. He had come to see me about something, and my guess is that he had come to see me so I could show him the six different agreements, which means that it probably was before this conference [that is, the consultation of 6th April]. But I'm guessing, and it's no more than a guess. Because I can't think of any other reason why he would have come to my room. I am certain that Wellers was brought up. And I think it's likely that he brought it up and that my response was something to the effect: oh, well, it doesn't really matter.
Mr. Batcup did not recall this conversation; but he did not suggest in cross-examination that it did not occur. On the basis of Mr. Susman's revised recollection, which seems to me to make better sense, the reference to a possible claim against Wellers in the consultation of 6th April is likely to have reflected the conversation with Mr. Batcup which he had had only shortly before. It was put to both Defendants in cross-examination that, now that they had (albeit belatedly) identified the possibility that a time limit against Wellers had been missed at a time when they had both been instructed it was their duty to draw this possibility to Mr. Fox's attention, and that it was wrong that they should take it on themselves to make the judgment as to whether the potentially lost claim had in fact any value; but I need not rule on this criticism since by that date the relevant damage had already been done.
E. MAY 1999 – MAY 2004: THE CLAIM AGAINST PJH
- On 18th May 1999, i.e. immediately following the settlement of the claim against LL, Mr. Fox sought PJH's advice as to whether Wellers had been negligent in not issuing proceedings against LL in 1991, as a result of which
… we have … been denied the opportunity of our claim for the loss of the "compromise settlement offer" being settled by the Court.
It was not until 1st December 1999 that he was able to discuss the point with Ms. Hartwell. He suggested that Mr. Batcup's advice be sought, but Ms. Hartwell pointed out that he would be likely to have a conflict since he had been instructed by Wellers in 1991. She also pointed out that any claim against Wellers might itself now be statute-barred and that in that case PJH might themselves be open to criticism. Mr. Fox asked her nevertheless to approach Mr. Batcup. She did so and, as anticipated, he said that it would not be proper for him to advise. PJH accordingly instructed Mr. Matthias of counsel (who had of course had some previous involvement: see para. 70 above).
- Mr. Matthias advised in conference on 19th June 2000. Ms. Hartwell's note of the conference (approved by Mr. Matthias) shows that Mr. Fox took counsel in detail through the history of the negotiations with TSW in October 1985. He emphasised that at the time that he first saw Mr. Leech he was "totally unaware that the original form of the agreement had been revised and re-drafted to take into account his concerns" and said that "the ultimate form of the agreement negotiated by Mr. Lines would have been satisfactory to him". He said that in particular he was unaware that the bills "were to be guaranteed by [SV]". This of course is the version of events which Mr. Fox had advanced in 1997 and which had been demonstrated to be quite wrong. Surprisingly, this was not pointed out to Mr. Matthias, who had not been supplied with any of the contemporary papers and accordingly took what he was told at face value. Against that background, he advised (a) that LL had been in breach of duty in October 1985 by failing to advise Mr. Fox of the availability of an acceptable form of the offer; (b) that that breach had led to the offer being lost; (c) that that loss had occurred by no later than the end of October 1985, so that the time for bringing proceedings based on it expired at the end of October 1991; (d) that Wellers were in breach of duty in not advising that proceedings should be issued prior to October 1997; but (e) that any claim against Wellers was now statute-barred. He described the (now lost) claim against Wellers as "beautifully simple".
- Mr. Fox then took other advice. Proceedings were in due course commenced by Mr. and Mrs. Fox against PJH for failing to advise them of the time limit for bringing proceedings against Wellers. The claim was brought with the benefit of a contingency fee agreement. It was quantified at almost £1m. PJH initially vigorously defended the claim. But at a mediation in April 2004 PJH agreed to pay £110,000 in full and final settlement, together with £160,000 in costs. Mr. and Mrs. Fox did not proceed against either Defendant, nor did PJH seek to join them as Part 20 defendants: they did apparently seek to engage them in the mediation but they were not interested.
THE ISSUES
- PJH's claim is, as I have said, based on the provisions of s. 1 of the 1978 Act. No point arises as to the effect of the sub-section, but for ease of reference I reproduce the relevant parts as follows:
(1) Subject to the following provisions of this section, any person liable in respect of any damage suffered by another person may recover contribution from any other person liable in respect of the same damage (whether jointly with him or otherwise).
(2)-(3) …
(4) A person who has made or agreed to make any payment in bona fide settlement or compromise of any claim made against him in respect of any damage (including a payment into court which has been accepted) shall be entitled to recover contribution in accordance with this section without regard to whether or not he himself is or ever was liable in respect of the damage, provided, however, that he would have been liable assuming that the factual basis of the claim against him could be established.
- The issues, or potential issues, raised by PJH's claim in the present proceedings can be analysed as follows:
(1) Were the Defendants liable to Mr. and Mrs. Fox for failing to advise them prior to the end of October 1997 of the potential claim against Wellers and of the time limit applicable to that claim ? Since any such liability would have arisen in tort that issue resolves into two sub-issues:
(a) Was either of the Defendants in breach of the duty of care owed by them to Mr. and Mrs. Fox ?
(b) If so, did Mr. and Mrs. Fox suffer any loss as a result of such breach(es) ? This involves an assessment of their prospects of success (i) in the "lost" action against Wellers and (ii) in the lost settlement claim against LL.
(I must in principle consider the case separately as against each Defendant; but, as is evident from the fact that they are instructing the same solicitors and counsel, this is not a case where different answers seem practically possible.)
(2) If so, would PJH have been liable to Mr. and Mrs. Fox for the same damage if "the factual basis of the claim against [them]" had been established ?
(3) Was PJH's settlement with Mr. and Mrs. Fox bona fide ?
(4) If on consideration of the foregoing issues the Defendants are liable to contribute to the amount of the settlement in what amount should they do so ?
I take those issues in turn.
ISSUE (1): THE LIABILITY OF THE DEFENDANTS
- Although it might appear strictly more logical to consider breach and damage in that order, it will in fact be more convenient to approach the sub-issues in chronological order, i.e. to consider first the value of the lost settlement claim and then that of the putatively lost claim against Wellers before proceeding to consider the potential liability of the Defendants.
THE CLAIM AGAINST LL (THE LOST SETTLEMENT CLAIM)
- My task is not to seek to decide definitively whether LL were liable in negligence to Mr. and Mrs. Fox for the amount of the lost settlement, but simply to decide whether that claim had a real and substantial prospect of success and thus constituted a thing of real value: the numerous authorities to this effect are helpfully reviewed and their effect analysed by the Court of Appeal in Dixon v. Clement Jones [2005] PNLR 6 ([2004] EWCA Civ 1005), esp. per Rix LJ at paras. 24-42. Even if there may sometimes be cases where it is open to the Court to, in effect, try the lost action, this is certainly not one of them: too little of the evidence which would be crucial for a fair determination is available. In performing that task I ought to take into account the principle deriving from Armory v. Delamirie (1722) 1 Stra. 505 that if the negligence of the defendant has led to evidence being unavailable which might otherwise have assisted the victim of that negligence he should have the benefit of any consequent doubt. I should, strictly, consider the question as at October 1991, when the claim was lost.
- In my judgment the lost settlement claim against LL, viewed as at that date, had substantial value. My reasons are as follows.
- I should start by saying that the substantive points made in Mr. Leech's letter of 23rd October 1985, taken by themselves, seem unimpeachable. The various problems which he identified with the draft Agreement were, as discussed at para. 21 above, real. The only way of ensuring payment of the future instalments, within the framework as agreed at that date, would have been for SV's "guarantee" to take the form of an undertaking to pay in the event of default irrespective of any alleged breaches of the Agreement. No such undertaking from SV had been proffered, and it was unlikely that the promised guarantee when (or if) tendered would go that far.
- It does not however follow that the only sensible course for Mr. and Mrs. Fox was to reject the offer. It remained to be seen whether the SV guarantee in fact materialised and if so what its terms amounted to. And even if, as seemed likely, they did not give 100% protection, a judgment would have to be made as to whether the risks of default (which would not necessarily mean ultimate non-payment but would entail further litigation) outweighed the risks of continuing with the litigation. All agreements involving deferred payments carry some risk of default, and all agreements involving mutual obligations carry the risk that the other party will allege breach and claim damages in consequence. These risks were inevitably inherent in an agreement of the kind which Mr. Fox had negotiated with Mr. Farnsworth. Mr. Lines and Mr. Grey both believed that the risks inherent in an agreement of the kind apparently on offer were preferable to the risks of litigation against the Hanson interests. Thus the real question about Mr. Leech's advice is not whether his analysis of the draft Agreement was wrong but whether it was negligent of him to have advised as emphatically as he apparently did that Mr. Fox should seek to re-negotiate and should be prepared to litigate if re-negotiation proved impossible; and, importantly, that for those purposes he should (immediately) change solicitors.
- I believe that there is a serious argument that that advice was indeed negligent. Mr. and Mrs. Fox had been receiving careful advice from competent solicitors and counsel who had had every opportunity not only to consider the Agreement but also to assess the risks of the alternative course of embarking on further litigation. Mr. Leech was in no position to form any useful view on the latter element in the equation. He knew about the merits (and value) of the claim against the Hanson interests only what Mr. Fox could tell him in a single meeting (supplemented by what he may have already heard from Mr. Cutting and/or Mr. Woods – who, however, may not have been entirely disinterested). In those circumstances, for Mr. Leech to give the advice which Mr. Fox says that he did may have been not just bold but reckless. It is arguable that any prudent solicitor should have advised at least that Mr. and Mrs. Fox should continue to retain SLP until the terms of the SV guarantee were known, and should have taken advantage of the interval to acquaint himself more fully with the real prospects of the potential claim against the Hanson interests. Mr. Leech was well aware that the mere fact that he had been instructed in place of SLP might lead the Hanson interests to withdraw: he told Mr. Fox so in the letter of 23rd October. The fact that he warned him of that risk, even if he did so before the die was cast (as to which there is no evidence), would not necessarily be enough to "save" his substantive advice if that was otherwise negligent.
- Even if it was not negligent for Mr. Leech to give the advice which he did between 15th and 23rd October, there is the further question of his communications, or the lack of them, with TSW in the days following Mr. Fox's decision to instruct him. As explored in para. 34 above, the facts are obscure. But if Mr. Leech did indeed make no attempt to contact TSW, thus leaving the negotiations effectively in limbo at a crucial point, that too was arguably negligent. Whatever the deficiencies of the draft Agreement, the priority, from the point of view of Mr. Fox's interests, was to see if they could be remedied; and it appears that that was what Mr. Leech told Mr. Fox he intended to try to do.
- I therefore believe that Mr. Fox's potential claim for negligence against LL was a thing of real value as at October 1991. It was of course by no means unproblematic. As I have acknowledged, there does not appear to have been much wrong with Mr. Leech's legal analysis. The primary challenge had to be to his tactical advice, which is in principle a more difficult target. And since the advice on which the claim would largely depend was given orally, and the challenge to it would centre on its tone as much as its content, much would hang on Mr. Fox's credibility and reliability as a witness. But in my judgment the sequence of events between 15th and 28th October is sufficiently unusual that a Court would have wished to look quite hard at Mr. Leech's conduct (including the extent to which he was having regard only to Mr. Fox's interests as opposed to his own and that of his existing clients). It is also legitimate to bear in mind that any Court considering in the early 1990s a claim arising out of Mr. Leech's advice in October 1985 would do so in a context highly unfavourable to LL. It would know of the negligent way in which the Fontana and Hanson actions had been handled (indeed the lost settlement claim would presumably form part of an action in which that negligence was also claimed for); of the Court of Appeal's criticisms of Mr. Leech when discharging the second Mareva; of Mr. Leech's nervous breakdown (with the consequent complaint to the Law Society); and of his bankruptcy.
- I also acknowledge that there are question-marks as to whether the Hanson interests ever meant to settle; as to whether a guarantee from SV would in fact have been forthcoming; and, even if all was in order on that side, as to whether, even apart from Mr. Leech's advice, Mr. Fox might not in the end have got terminal cold feet about the proposed deal. Difficulties and uncertainties of this kind would certainly affect the settlement value of the claim, but I am in no position to reach a firm view that all or any of those problems would have prevented the settlement eventuating. The evidence falls well short of establishing either that the Hanson interests were not negotiating in good faith, or that SV would not have provided a guarantee, or that Mr. Fox would, even if SLP had remained instructed, have pulled out of the settlement. It is to be noted that at any trial the Court would have had the benefit of the evidence of Mr. Lines, who strongly believed not only that settlement was available (and that he would have agreed to it if sensibly advised) but also that a settlement on proper terms was available.
- I reach this view on my own assessment of the evidence available to me. I note Mr. Wadsworth's negative advice about the prospects of the lost settlement claim. As I point out at para. 57 above, it is in fact unclear what information he was given; but I can in any event be confident that he did not have the issues as fully explored with him as I have. I also note Mr. Susman's advice in August 1997 that the claim was "highly speculative" (see para. 90 (5)) and what he gave in his witness statement as his reasons for not being concerned in April 1999 about the time limit for suing Wellers having passed (see para. 104). I consider in more detail below what basis Mr. Susman had for those views: at this stage I need only say that, to the extent that it was his view at the time that a claim against LL on the lost settlement claim had never had any realistic prospect of success, I cannot agree.
- In summary, therefore, I believe that the lost settlement claim had a substantial value. I do not, given the peculiar nature of these proceedings, have to form any more precise view about that value.
- If Mr. Fox had appreciated that the lost settlement claim against LL would become statute-barred at the end of October 1991 I have no doubt that he would have insisted on steps being taken that would have preserved that claim. Although it took him a little time to focus on the lost settlement claim, once he did so he was always keen that it should be advanced. The most obvious course would have been simply to issue before the end of October 1991 the proceedings against LL which were eventually issued almost four years later, pleading the lost settlement claim in those proceedings in a more straightforward way than had to be resorted to subsequently. There would have been no difficulty in doing so within the scope of the legal aid already granted.
THE CLAIM AGAINST WELLERS
- As with the lost claim against LL, it is not necessary for me to reach a definitive view as to whether the lost claim against Wellers would have succeeded but only to decide whether (as at October 1997) it had a substantial value. I have not found this altogether easy. It does not follow from my conclusion that the lost settlement claim had a substantial value that Wellers were negligent in failing to advise about it prior to the end of October 1991. That depends on what they were told by, or should reasonably have elicited from, Mr. Fox about the events of October 1985. I can see a powerful argument that Wellers were not told enough to put them on notice of the potential claim until after the crucial date. They were initially instructed for the purpose of conducting the Fontana and Hanson litigation. Although it became clear from an early stage that the way in which that litigation had been handled gave rise to a potential claim for negligence against LL, there is nothing either in Mr. Fox's witness statement for the purpose of the PJH proceedings or in the documents before me to suggest that he explicitly raised with Wellers an allegation that the advice given in October 1985 was negligent. His application for legal aid referred only to negligence in the handling of the litigation. Although the ten-page note, which Mr. Fox sent to Miss Nickson in May 1991, did give Wellers an account of the events of October 1985 it fell short of clearly alleging negligent advice or raising the lost settlement claim: see para. 49 above. It was not until May 1993 that he explicitly did so: see para. 55.
- On careful consideration, however, I am not prepared to say that there was no real prospect that a claim against Wellers could have succeeded. I think that it is at least arguable that Mr. Fox's account in the ten-page note of the advice which he was given in October 1985 should have put Wellers on notice that there might be grounds for criticising that advice and that it was necessary carefully to go over what had happened with Mr. Fox. (In this connection it is interesting to note that on reading the ten-page note Miss Nickson did in fact ask for, and receive, a copy of Mr. Leech's letter of 23rd October; but she does not appear to have pursued her enquiries further.) If that point is reached, it almost certainly follows that Wellers should have appreciated that any such review needed to be conducted before the end of October 1991. If there had been a focused discussion of the point, either between Mr. Fox and Miss Nickson or in an earlier conference with Mr. Batcup, it is likely that the criticisms which Mr. Fox eventually made in May 1993 would have been raised earlier and that appropriate advice about limitation given would have been given. Mr. Stewart emphasised to me that Mr. Fox was a man who knew his own mind and that if he had wanted to make a claim against LL based on negligent advice in October 1985 he would have done so. But even clear-thinking and decisive clients need to have their minds focused by their lawyers. The germ of the complaint which emerged in May 1993 was present in the ten-page note: it is arguable that Miss Nickson should have spotted the claim that was latent in Mr. Fox's criticisms even if he had not yet spotted it himself.
- Despite that conclusion, I must frankly say that on the materials before me I am inclined to think that a claim against Wellers on this basis would have been rather weak; but what matters is that its prospects of success were more than negligible. Much would depend on a detailed examination of the communications (oral as well as written) between Miss Nickson and Mr. Fox in mid-1991, which would form an important background to how the ten-page note should be read. Such an examination is not now possible; but, on the hypothesis (which I have to adopt for these purposes) that that is the result of the negligence of PJH and the Defendants, the benefit of any reasonable doubt would have had to go to Mr. Fox. I also note that at a trial in, say, 2000 Mr. Fox would have been helped by the fact that there were other serious criticisms of Wellers' conduct. Whether or not any other claims of negligence could be advanced against them, their conduct of the Hanson action and the claim against LL was unimpressive and painfully slow.
- I have considered whether it may not also be legitimate to bear in mind that, subject to any excess, SIF stood behind both LL and Wellers, so that the knowledge that even if a limitation defence in the LL action succeeded (as regards the lost settlement claim) that might only mean that the loss came out of another pocket might have induced SIF to pay up in the LL claim. Mr. Stewart rightly warned me to be cautious about this line of argument because of the complications caused by the presence of an excess and by the fact that SIF could not simply treat both its insureds as interchangeable, and I would reach the same conclusion even if I ignored it; but I do not in fact think that it is a wholly negligible factor in assessing whether even a comparatively weak claim against Wellers might have had a real value to Mr. Fox.
- Again, I reach this view on the basis of my own assessment of the material available to me. But, notwithstanding the qualifications expressed in para. 106, it gains some limited support from the fact that Mr. Matthias of counsel advised in June 2000 that there would, but for limitation, have been a good claim against Wellers.
- Again too, I have no doubt that if Mr. Fox had been advised that the time limit for bringing proceedings against Wellers expired at the end of October 1997 he would have taken whatever steps were necessary to preserve his rights. The issue of a protective writ would have been a straightforward matter: the evidence of Mr. Hinds was that legal aid would almost certainly have been available for that purpose, but even if it was not no doubt Mr. Fox could have raised the necessary sum. (A still cheaper alternative would have been to agree with Wellers and/or SIF to "toll" limitation, which might well have been possible.)
- It is a distinct question whether Mr. Fox would not only have taken the necessary steps to preserve his rights against Wellers prior to the end of 1997 but would have pursued them thereafter to trial or settlement. In Harrison v. Bloom Camillin [2000] Lloyd's Rep PN 89 Neuberger J. held that that question falls to be resolved on the balance of probabilities rather than simply as part of the "loss-of-a-chance-based" valuation of the claim (see at p. 95). Although I do not find the question entirely easy, I respectfully agree with his conclusion. I have no doubt that Mr. Fox would have wished to pursue proceedings against Wellers unless he were able to achieve full (or at least substantial) recovery in respect of the lost settlement claim in the LL action: he made it quite clear in 1998 and early 1999 that he would sue Wellers if his claim against LL was eventually prejudiced by their failure to issue proceedings in time (see para. 97 above). Mr. Fox did not apparently in 1997 or 1998 have substantial assets apart from his home, and he would thus at that date have been dependent on receiving legal aid or finding a solicitor willing to act on a conditional fee basis. That might not have been straightforward given my doubts over the strength of the case that Wellers had been negligent. But I do not believe that the difficulties facing Mr. Fox would have been insuperable. He would, as I have found, have had no difficulty in issuing an initial writ. The sensible tactic thereafter would have been to seek to keep the proceedings on hold until the LL action was determined. I think it likely that SIF (who would very likely in practice have had the conduct of the defence) would have been agreeable to that course. Even if they were not, I think that Mr. Fox could have found the limited funds necessary to keep the action going until mid-1999, when he received his damages from LL.[6] Although it would have been something of a gamble for him to invest a substantial part of those hard-earned fruits in further litigation, I think that he would have been prepared to do so if he had to. He was nothing if not tenacious. I note that he was willing to fund privately the obtaining of advice from Mr. Matthias in June 2000. I do not however think it at all unlikely that he would have been able to find solicitors willing to pursue the matter on a conditional fee basis. Despite my own doubts about the strength of the claim against Wellers, I note how Mr. Fox was able to persuade Mr. Matthias of its merits. I also note that his eventual proceedings against PJH were pursued under a CFA. Although certainty is not possible, I find on the balance of probabilities that Mr. Fox would have been able to fund a claim against Wellers until trial or earlier settlement.
THE CLAIM AGAINST THE DEFENDANTS
- From at least the receipt of his instructions dated 30th June 1995 onwards Mr. Batcup was, and in any event should have been, aware that the lost settlement claim formed part of the claim which Mr. Fox wished to bring against LL[7]. That was apparent in particular from the terms of the "Matters for Statement of Claim" note included with those instructions: see paras. 62 and 65 above. His understanding to this effect is apparent (though admittedly not always readily apparent) in the way that he pleaded the case: see paras. 73-77 and 82-83 above. It preceded, and was independent of, the introduction by Mr. Fox in September 1996 of his allegations about Mr. Leech's concealment of the revised draft of the settlement offer, although until those allegations were definitively shown to be ill-founded (which did not occur until after the end of the relevant period) they may have reinforced Mr. Batcup's perception that the claim was a viable one.
- I believe that the same was equally apparent to Mr. Susman from, at latest, the date of the consultation of 22nd August 1997. Despite the obscurities of the pleadings with which he had to grapple, it is clear that he – correctly – understood that Mr. Fox wished to claim that Mr. Leech's advice was negligent and had caused him to lose the £445,000 settlement offer; and that that case was not dependent on the concealment allegations. That is adequately apparent from his observations in that consultation (see para. 90 above), but it is confirmed by his note of 24th November 1997 (see para. 96) and by the way in which he analysed and presented the claim in the period leading up to the trial in 1999 (see para. 99). So far as the latter points are concerned, they of course post-date the relevant period, and I accept that by the time that Mr. Susman came to prepare the opening he had much fuller papers than he had had in 1997; but the fuller detail which was available was not such as fundamentally to change the nature of the claim. It is true that Mr. Susman, like Mr. Batcup in the pleadings, fought shy, in his drafting both of Ms. Hartwell's affidavit in 1997 and of the opening in 1999, of explicitly advancing such a claim; but there were particular tactical reasons for taking that course.
- Since both Defendants understood that Mr. Fox wished to advance the lost settlement claim it was plainly incumbent on them to consider whether it was statute-barred: the question of limitation obviously arose, given the dates in question, and it was in any event brought into focus by LL's defence. And it is in fact both clear and accepted that both Defendants did indeed during the relevant period consider the limitation issue and that they understood that it posed a serious problem. In the case of Mr. Batcup, he never advised on the point explicitly; but his appreciation that the lost settlement claim was prima facie statute-barred can be inferred from the way in which he pleaded the Statement of Claim and the Reply. And in the case of both counsel the point was addressed in the consultation on 22nd August 1997. Even though there is no note of any unambiguous advice to this effect until the consultations in April 1999, it is in my view adequately clear that both counsel appreciated well before the end of October 1997 that the lost settlement claim was on the face of it statute-barred; and even if they did not, they plainly should have done. It is of course true that on the basis of Mr. Fox's instructions there might have been a s. 32 answer to the limitation defence; but no-one was suggesting that that answer was so strong that there need be no concern about limitation, and by the end of October 1997 it was beginning to look very questionable.
- Mr. Batcup knew that at the time that the limitation period for bringing the lost settlement claim expired Wellers were instructed. Mr. Susman may not have known exactly when Wellers were first instructed, but he knew of their prior involvement. In those circumstances I believe that it was the duty of both of them to raise with Mr. Fox the question whether Wellers may have been at fault in failing to take steps to preserve the lost settlement claim. I accept that they could not have given any definitive advice without being told more about what information and instructions Mr. Fox had given Wellers; but it was necessary to alert him to the fact that such a claim might lie and that the time for bringing it would expire at the end of October 1997. No doubt as a general proposition a lawyer may not be under a duty to advise his client about a potential claim which falls outside the scope of the matters on which he is instructed; but a claim against a previous adviser who has allowed a time limit to pass is so closely related to proceedings in which that limit is in issue that it will necessarily, even if only by implication, fall within the scope of the instructions of an adviser instructed in those proceedings to bring the possibility of such a claim, and any relevant time limits, to his client's attention. It is then of course up to the client to decide whether he wants further advice and whether, subject to such advice, he wishes to bring proceedings. But he must at least be given the opportunity to choose. The duty arises even if the barrister believes that the claim in question is weak or otherwise not worth pursuing: unless it is evidently so hopeless that the client could not reasonably decide to pursue it, the advice must be given. In this connection Mr. Stewart sought to rely on Lady Hale's observation in Moy v. Pettman Smith [2005] 1 WLR 587 to the effect that it is legitimate for a barrister to give the client the benefit of his opinion rather than his doubts (see at para. 28). But the question in this case is not whether the Defendants should have given more or less robust advice but whether they should have advised on the existence of a claim (and the imminent time bar) at all.
- Mr. Stewart submitted in his opening, though the point was not actively pursued thereafter, that, even if the Defendants might otherwise have been under a duty to draw Mr. Fox's attention to the possibility of a claim against Wellers, no such duty could arise in circumstances where Mr. Matthias had already been instructed to advise on such a claim (see para. 70 above). But Mr. Matthias had not been asked to advise on this aspect of the case, and there is no evidence that either Defendant understood that he had. Mr. Stewart also submitted that the Defendants were entitled to place faith in the s. 32 arguments. I do not accept this: there could be no confidence, even as at 22nd August 1997 (and diminishingly over the following two months) that s. 32 would suffice to defeat the limitation defence.
- Neither Defendant gave such advice before the end of October 1997. It was the evidence of each of them that the possibility of a claim against Wellers did not occur to them at that time. It follows from what I have said above that I believe that it should have done; and that view is reinforced by the fact that the possibility certainly did occur to them, without any radical change in the circumstances, in April 1999 (see paras. 98 and 104 above). Mr. Susman was adamant in his evidence that he was under no such duty. In cross-examination he said this:
You are suggesting that it was my obligation to tell Mr. Fox that he might have an action against somebody who I thought had not been negligent for not suing somebody else who I thought in this respect had not been negligent for losing something which I thought he never had. I don't think that was my obligation.
That was a powerful piece of advocacy, the more so because I am sure that it reflected Mr. Susman's sincerely held belief. Mr. Stewart and Mr. Smith thought it sufficiently powerful to make it the epigraph to their closing submissions. But I do not think that it accurately reflects the position in the summer of 1997. I am not convinced that Mr. Susman had in 1997 reached a firm view that there had in October 1985 been no prospect of settling with the Hanson interests ("something which … he never had") nor that Mr. Leech's advice was not negligent: indeed he was not in a position to have done so. And he was certainly not in a position to form any view as to whether Wellers had been negligent. In any event, the entire formulation overlooks the fact that, provided that the claims were realistically arguable, it was for Mr. Fox to decide whether to seek to pursue them.
- Accordingly I believe that both Defendants were in breach of duty. PJH's Statement of Claim pleads that Mr. Batcup should have given the advice in question at various dates in 1996 and 1997 as well as, with Mr. Susman, on 22nd August 1997. It is unnecessary for me to consider those specific allegations: it is enough to say that the advice should have been given at that consultation if not before, and that the breach continued until the limitation bar came down at the end of October 1997. It is only fair to add that the breaches of duty on the part of both Defendants were specific and limited. Though Ms. Carr tried to interest me in a number of other criticisms of Mr. Batcup's advice between 1991 and 1997, it is unnecessary that I should form any view about them; and, whether or not some may have been justified, I should record my clear view that Mr. Batcup was throughout his long involvement with Mr. Fox anxious to do his best for him and took a lot of trouble over the case. As for Mr. Susman, from the time that he was first instructed he did a great deal of careful and thoughtful work on the case and gave competent and professional service both in relation to LL's application in 1997 and in relation to the proposed trial in 1999 and the settlement.
- However, that is not the end of the matter. Both Mr. Susman and Mr. Batcup gave evidence that if the possibility of a claim against Wellers had occurred to them their advice would have been that no such claim should be pursued. Mr. Stewart submitted that such advice would not have been negligent and that accordingly any breach of duty on their part had caused no loss and the Defendants could not be liable. He relied on Bolitho v. City & Hackney Health Authority [1998] AC 232. In that case a doctor negligently failed to attend a sick child who (as it turned out) required intubation in order to prevent brain damage; but her evidence, which the Judge accepted, was that even if she had attended she would not have intubated, and the Judge held that such a course would not have been negligent. In those circumstances he held that her negligence in not attending had caused no loss; and the House of Lords upheld his reasoning.
- I should start by noting that the basis for the Defendants' evidence that they would have advised against proceeding against Wellers is not that they did not believe that Wellers had been negligent. So far as that is concerned, Mr. Susman knew nothing about the nature of Mr. Fox's instructions to Wellers; and although Mr. Batcup was better placed than Mr. Susman in that regard, he too was certainly in no position to form a definitive view about whether Wellers were on notice of the lost settlement claim before the end of October 1991. Rather, their evidence was based on the view which Mr. Susman in particular says that he had at the time, and still has, that the lost settlement claim would not have been worth pursuing against LL in any event. I am bound to say that I think that there is an element of hindsight about this. It is true that Mr. Susman had in the consultation on 22nd August 1997 described the claim as "highly speculative", but, as I have already observed, he was not at that time in a position to advise definitively on the merits and his judgment is likely to have been based principally on the limitation difficulties. Even if it did in fact represent his view of the substantive merits of the claim, "speculative" is not necessarily the same as "hopeless" (though I appreciate that it is sometimes used euphemistically); and he certainly regarded the lost settlement claim as sufficiently strong to be worth deploying in his opening in 1999, albeit in the rather unusual way described in para. 100 above. If I had to make a finding as to what advice Mr. Susman and Mr. Batcup would have given in mid-1997 if they had been asked whether the lost settlement claim would have been worth pursuing against LL but for the limitation problems, I think that they would have advised that it was. I do not doubt the genuineness of the belief which they now hold to the contrary; but it is no easier for them than for me – in fact, in some ways less easy – to reconstruct what they would have thought if the distorting influence of the limitation issue had been taken away. For the reasons which I give at paras. 112-121 above, there was in fact a strong case for pursuing the lost settlement claim as part of the overall action against LL, and I would expect Mr. Susman and Mr. Batcup as competent practitioners to have recognised it.
- That finding may not by itself dispose of Mr. Stewart's point. The strength of the lost settlement claim was not the only question affecting the viability of a claim against Wellers: it was also necessary to consider whether Wellers had been negligent. If I found (a) that Mr. and Mrs. Fox would have been advised that the case that Wellers had been negligent was too weak to justify the bringing of proceedings and (b) that such advice would not have been negligent, then the factual premise of his submission would survive. However, I still cannot accept his contention, for the following reasons.
- In the first place, the position about what advice Mr. and Mrs. Fox would have received on the issue of Wellers' negligence, if the issue had been addressed, is far from clear-cut. I should start by noting that it is unlikely that the advice in question would have been given by either of the Defendants. Mr. Batcup would almost certainly have regarded himself as conflicted out (as he did when the point eventually arose in late 1999 (see para. 105 above)); and Mr. Susman, though not himself directly conflicted, might, as he acknowledged in cross-examination, have found it awkward to accept instructions. If PJH could not have obtained advice from Mr. Susman or Mr. Batcup, it is a plausible speculation that they would have instructed Mr. Matthias, as they in due course did (see para. 106). In that case it is tempting to say that we know what he would have advised, namely that there was a "beautifully simple" claim against Wellers. That may in fact be too glib, since he or any other counsel considering the claim against Wellers at a time before the limitation bar had come down (including Mr. Susman if he had in fact accepted instructions) would have been required to consider the merits rather more narrowly than Mr. Matthias had to in the circumstances in which his advice fell to be given. My doubts about the true strength of the case against Wellers mean that I must contemplate that counsel advising on the question in mid-1997 might well have been cautious. But I think it very unlikely that he or she would have advised that the case was hopeless. There is thus no precise parallel with the position in Bolitho, where the Judge was able to make a clear finding as to what the doctor would have done.
- More fundamentally, however, it is important to recognise that the question in the present case is not what the putative tortfeasor, or a third party, would have done but for the initial negligence but what they would have advised. In Bolitho the decision that would have avoided the loss would have been that of the doctor. In the present case the decision would have been Mr. Fox's. As I have made clear at paras. 127-8 above, I have no doubt that even if Mr. Fox had in 1997 received cautious, or downright pessimistic advice, about the prospects of a claim against Wellers he would nevertheless have insisted on proceedings being issued (or an agreement reached with SIF) in order to preserve the limitation position and that he would have pursued the claim thereafter.
- I have in reaching the conclusions expressed above striven to avoid hindsight. I have also reminded myself, in accordance with the warning given by Lord Hope in Moy v. Pettman Smith (above; see at para. 19), that the question is not whether I myself, or other barristers in the Defendants' position, might have given the advice in question but whether any reasonably competent barrister should have done so.
ISSUE (2): THE LIABILITY OF PJH
- The matters which I have identified in paras. 129-130 above as being apparent to the Defendants as counsel were, and certainly in any event should have been, equally apparent to Ms. Hartwell as a competent litigation solicitor. She knew about the lost settlement claim: indeed it was she who had most fully pleaded it, albeit at a stage when it was somewhat distorted by Mr. Fox's allegations about concealment of the revised draft, (see para. 85 above). She should have appreciated at the consultation on 22nd August 1997, if no earlier, that there was a strong risk that it was statute-barred and that that raised the question whether Wellers had been negligent in not issuing proceedings before the bar came down. I accordingly hold that PJH were liable to Mr. and Mrs. Fox on the facts alleged in the proceedings against them. Mr. Stewart had some fun with the fact that Ms. Hartwell had until the settlement of Mr. and Mrs. Fox's claim robustly denied any negligence, but had appeared to undergo a change of heart by the time that she came to write her witness statement in these proceedings. But that is no more than a debating point. The question whether Ms. Hartwell was negligent is for me to judge rather than her.
ISSUE (3): PJH's SETTLEMENT WITH MR. AND MRS. FOX
- The Defendants now accept that PJH's settlement with Mr. and Mrs. Fox was bona fide. I understood them also to have accepted, if this is a different and material question, that it was reasonable in amount: even if they did not do so, I so find. If Mr. and Mrs. Fox had recovered in full from PJH the value of the lost settlement claim plus interest it would have been worth almost £1m. The sum of £110,000 finally agreed thus represented a very big discount on the 100% value of the claim and could on no view be regarded as an unreasonable amount to pay if there were any substantial risk on liability.
- Mr. Stewart indeed submitted that the very smallness of the settlement amount was evidence that the lost claim against Wellers and/or the lost settlement claim were both extremely weak and so reinforced his arguments that the Defendants were not at fault in not drawing them to the attention of Mr. and Mrs. Fox and/or that if they had been identified prior to October 1997 Mr. and Mrs. Fox would have been advised not to pursue them. I have considered and rejected those arguments above. The smallness of the settlement sum does not trouble me in this context. I have already acknowledged the difficulties with both "lost" claims and I am not surprised that Mr. and Mrs. Fox were prepared to accept a very large discount. There are likely also to have been other considerations, unrelated to the objective merits of their claim, favouring a settlement, even at a very big discount.
ISSUE (4): THE EXTENT OF THE DEFENDANTS' CONTRIBUTION
- By s. 2 of the 1978 Act I am obliged to apportion the relevant contributions of the parties as I find "just and equitable having regard to the extent of [the parties'] responsibility for the damage". There is on the facts of this case no difference between the extent of the relative causative contributions of the negligence of PJH and the Defendants. The crucial question is the extent of their relative responsibility. In my judgment counsel must bear the greater share of the blame for failing to advise Mr. and Mrs. Fox of the potential claim against Wellers and the effect of the time bar. Their relationship was of the conventional kind in which PJH as solicitors looked to counsel for authoritative guidance on the major strategic questions concerning the conduct of the litigation and associated issues. In my judgment the just apportionment of contribution would be 75:25 between counsel on the one hand and PJH on the other. Mr. Stewart and Ms. Carr were agreed that it was unnecessary that I should make any apportionment as between the two Defendants.
- The parties are agreed that PJH's entitlement to contribution extends not only to the sum of £110,000 but also to their agreed liability for Mr. and Mrs. Fox's costs in the sum of £160,000. The pleaded claim to a contribution to their own costs in defending the action is not pursued.
