When he delivered his judgment in Pritchard Joyce & Hinds v Batcup1 Underhill J said that he had striven to avoid hindsight and had reminded himself that the central issue he had to decide was whether any reasonably competent barrister would have given the advice that it was alleged should have been given by S and B (leading and junior counsel), not what he himself, or indeed, any other particular barrister in S and B’s position, might have advised. He found that S and B had been negligent in failing to advise their clients of the time limit applicable to a potential claim against their former solicitors Wellers.
The Court of Appeal subsequently held2 that despite identifying the correct test, Underhill J had applied his own “… meticulous …” and “… over-exacting …” standards when considering the conduct of both S and B; that he had done so based on hindsight, and his own reconstructions of events after reading a large amount of material which had been produced at trial. S and B’s appeal was allowed.
Pritchard Joyce & Hinds [PJH] had settled a claim for negligence brought against them by Mr and Mrs Fox and sought contribution from S and B under the Civil Liability (Contribution) Act 1978.
In 1970 Mr and Mrs Fox started a development of holiday apartments in Spain. The project ran into difficulties having absorbed Mr Fox’s savings. In an attempt to rescue the development, he entered into an agreement with Rantlodge Limited [Rantlodge]. As a result of this, and in return for shares in an English company, Mr Fox’s interest in the project was vested in a Spanish company controlled by Rantlodge. In order to secure borrowing by Rantlodge, Mr Fox agreed to deposit £70k in an account in Rantlodge’s name. Shortly after the deposit was made Rantlodge went into liquidation. Mr Fox did not receive his shares or the return of his deposit.
Stoneham Langton & Passmore
In 1984 Mr Fox instructed Stoneham Langton & Passmore [SLP] to advise him in respect of a possible claim against Rantlodge for the recovery of his money. By this stage, it had become apparent that Mr Fox’s money had been transferred to an account in the name of a Panamanian company called Fontana Holdings Inc [Fontana]. Mr Fox issued proceedings against Fontana [the Fontana action] and obtained a Mareva injunction in respect of its assets. In the meantime, Mr Fox was keen to bring an action against the individuals behind Rantlodge whom he believed to have been dishonest. There were some negotiations directly between Mr Fox and the legal representatives of these individuals which led to a settlement being agreed in principle. The terms of the proposed agreement were as follows:
- Mr Fox would receive £125k and four further payments of £80 over the course of the next four years. These four instalments were to be “suitably guaranteed”.
- Mr Fox would give a number of undertakings acknowledging that he had no claim against Fontana and would cease all communications with the individuals behind Rantlodge.
There were two aspects of the agreement that were of concern to SLP: first, the manner in which the instalments would be secured; second, the undertakings as drafted had the effect of allowing the individuals behind Rantlodge to resile from the agreement and require Mr Fox to repay any payments that had already been paid in the event that he breached the agreement. SLP advised, however, that the proposed agreement should be accepted nonetheless.
By mid-October 1985 Mr Fox was starting to have second thoughts about the proposed agreement and obtained a second opinion from Mr Leech of Linders Leech [LL]. Mr Leech advised in robust terms that the proposed agreement was unacceptable; that the individuals behind Rantlodge were not to be trusted; and that he should handle the matter on Mr Fox’s behalf. The papers were duly transferred to LL. The opportunity to settle on the terms set out above was lost by the end of October 1985 when the offer was withdrawn.
In March 1988, LL issued proceedings against 16 of the individuals behind Rantlodge. These proceedings had to be abandoned or were struck out against all defendants save for one with Mr Fox being ordered to pay costs. No further steps were taken in the Fontana action and (as a result of LL’s delay) the Mareva injunction was discharged in July 1989. A number of errors were made by LL:
- a subsequent appeal to the Court of Appeal was procedurally defective.
- no response was provided by LL to an invitation to show cause as to why the appeal should not be dismissed.
- LL issued fresh applications for summary judgment and an injunction without disclosing the earlier history. Both were initially allowed but subsequently overturned by the Court of Appeal who described the Mareva injunction as “…outrageous…”.
In January 1991 Mr Fox instructed a new firm of solicitors, Wellers. On 31 July 1991 Wellers sent instructions to B to advise on a claim for damages. Wellers had not at this stage received LL’s file but the instructions indicated that, on the basis of the papers so far available (in particular, a ten page note prepared by Mr Fox setting out the history of events), the areas of possible negligence by LL were two-fold: first, the conduct leading to the loss of the Mareva injunction; second, the handling of the action against the individuals behind Rantlodge which had led to cost liabilities. No further information was supplied by Mr Fox and by the time a conference took place on 27 November 1991 the limitation period for bringing a claim against LL in respect of its 1985 advice had become statute-barred.
Pritchard Joyce & Hinds
In August 1995 Mr Fox instructed PJH. B again advised in conference and subsequently drafted pleadings against LL in respect of its alleged negligence for (i) failing to achieve a better agreement for Mr Fox than that which was on the table in 1985 and (ii) the delay in progressing the Fontana action and the action against the individuals behind Rantlodge, not its 1985 advice not to accept the offer. There had never been any suggestion that such a claim should be brought against LL.
On 30 April 1997 LL’s solicitors advised that they were going to apply for a strike out of those parts of the pleadings that were statute barred. On 22 August 1997 S advised in consultation. The focus of this consultation was the pending strike-out application and at no point did either PJH, S or B advise Mr Fox that he had a claim against Wellers for failing to advise him of the time limits applicable to the advice given in October 1985 by LL.
A trial of the action against LL was fixed for 4 May 1999. On the morning of the trial the claim settled for a payment to Mr Fox of £150k plus costs. S believed that this was a good offer. Mr Fox had lost £70k and the claim for £445k (the original offer) was “highly speculative”. There was no evidence that the individuals behind Rantlodge would have “suitably guaranteed” the further instalments.
In the trial against S and B Underhill J rejected PJH’s contention that the advice given by LL in October 1985 was unbalanced, superficial and erroneous and found the advice to be “…unimpeachable…”. Despite this he still went on to find that the claim against LL for its 1985 advice had “… substantial value…” as at October 1991 when it was lost and that S and B had been negligent in failing to advise of the time limit applicable to this potential claim against Wellers.
The claim against S and B was eloquently expressed by S in the course of his evidence:
“…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 …”.
Court of Appeal
B and S appealed against Underhill J’s finding that they had been negligent. The Court of Appeal held that Underhill J had erred in concluding that it would have occurred to any reasonably competent counsel that LL’s advice not to accept the offer in 1985 was part of the claim that Mr Fox wished to (or should) pursue.
This decision reaffirms that the standard of care to be applied to counsel is that of any reasonably competent member of the profession. Barristers are under no greater duty to be correct than any other profession. In the words of Sedley LJ:
“ … The law does not… demand either omniscience or infallibility in lawyers any more than it does in doctors or architects. The law’s standard of reasonable competence means not only that there will be errors which are not compensable but that legal advisors are not expected to divine every claim that a client may theoretically have…”.