Case update: Contribution claims in professional negligence cases

by | Feb 10, 2021 | Blog Posts

Contribution claim

In cases where more than one party may have been negligent, it is possible for one of the negligent parties to seek a contribution towards the damages to the Claimant. A recent High Court case looked at a claim against a firm of solicitors and a barrister. Despite the claim against the barrister being dropped, he was ordered to pay 40% of the damages awarded to the claimant. We look at contribution claims and the case of Percy v Merriman White and others.

Background

Mr Percy instructed Merriman White (“the Solicitors”) to act for him in relation to a failed joint venture with Mr Trevor. The Solicitors, in accordance with their instructions, sought the advice of a Barrister, David Mayall (“the Barrister”). The Solicitors asked him to, amongst other things, “advise instructing solicitors generally in regard to strategy”.

Both the Solicitors and Barrister advised Mr Percy that he had a derivative claim worth pursuing. He therefore sought the Court’s permission to bring a claim. A hearing was scheduled, and in the interim the parties agreed to mediate. At that mediation Mr Trevor offered to settle the claim for £500,000. Mr Percy sought the Solicitors’ advice and rejected the offer; an offer that in hindsight represented a settlement far greater than that which he later achieved. Incidentally, the Barrister later (without reference to the offer) advised that “a settlement figure of between £400,000 and £750,000 excluding costs would be worth considering”.

Despite the offer being “worth considering”, the Barrister advised Mr Percy and the Solicitors to “press on with proceedings with a view to obtaining disclosure”. He further expressed his view that there was little risk that the joint venture company would simply be wound up. He advised, “just and equitable winding up was rarely ordered, that it was a nuclear option and the most likely outcome was that Mr Trevor would be ordered to buy out Mr Percy’s shares”.

Mr Percy therefore proceeded to the permission hearing. The Court observed that the joint venture company “is in short a natural candidate to be wound up on a just and equitable petition by either shareholder”, thereby weakening Mr Percy’s position. Mr Percy and Mr Trevor then settled the claim at £65,000. This of course was significantly less than the amount offered at mediation.

Mr Percy’s professional negligence claim and the Solicitors’ contribution claim

Following settlement, Mr Percy brought a claim against the Solicitors and the Barrister for negligence and breach of contract. The claim was ultimately settled between Mr Percy and the Solicitors, without the Barrister’s agreement. The Solicitors later sought a contribution to the damages it was to pay to Mr Percy from the Barrister, relying upon the Civil Liability (Contribution) Act 1978 (“the Act”). The Barrister resisted on a number of grounds. Therefore. a dispute ensued between the parties, over the correct interpretation of the Act.

The Barrister argued that Mr Percy’s claim would not have succeeded, had the firm properly defended the claim. By default, he argued that had the firm properly defended the claim that he would not be liable, as they would have suffered no loss.

The Court’s decision

The court disagreed. It held that a Defendant (D1) seeking a contribution from another Defendant (D2) need only show that the facts of the case as alleged by the claimant demonstrate a “reasonable cause of action”. D1 does not need to prove that there was a reasonable cause of action against D2. Equally, the Court held that if there was a reasonable cause of action, it would not consider arguments/defences from D2 as to the legitimacy of the claim.

This may seem somewhat unfair, given that the Barrister could not defend himself. The court addressed this to a degree. It stated that the statute is clear; to allow the Barrister to argue the merits of the original case would be to ask the Solicitors to argue their own negligence. This would, in the Court’s view, turn “all the usual conventions of civil litigation upside down that is, it would require D1 to prove C’s case against himself”.

The court decided the contribution claim in favour of the Solicitors. The Barrister was to pay 40% of Mr Percy’s damages.

Our professional negligence team has many years of experience in bringing claims against professionals. If you have a claim against one or more professionals, contact us today on 0800 988 7756.

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