The recent case of Berry v. Laytons highlights the importance for solicitors to provide "clear" advice, and not be "pessimistic" in estimating their client's chances of success in litigation.
Background: The claimant, Mr Berry, was a partner in a company called Electronic Interconnection Services (EIS). EIS had a contract with Polamco to provide agency work and promote the sale of Polamco's products. In 1999 EIS and Polamco began discussions to renew their agency agreement.
When these negotiations broke down, Mr Berry wrote to Laytons asking if EIS were entitled to potential commission under the Commercial Agents (Council Directive) Regulations 1993. (These Regulations came into force in 1994 and introduced a series of protections for commercial agents, in particular in relation to the termination of an agency).
Laytons provided advice to the effect that EIS was entitled to an amount equal to three months commission. Using this advice, EIS negotiated with Polamco. Polamco strongly rejected a claim for this amount and the contract between EIS and Polamco eventually came to an end in June 2000 and EIS was dissolved.
Mr Berry, having taken advice from another solicitor, brought proceedings against Laytons in 2006. He alleged that the advice provided by Laytons was "hopelessly confused and wrong”, and that "no reasonable solicitor" would have advised as Laytons had. Mr Berry also claimed that, had "clear and accurate" advice been given, EIS would have been able to obtain a large amount of compensation from Polamco.
Decision: Laytons were criticised by the court for conveying that any litigation pursued by Mr Berry would be a "pure gamble".
The court ruled that EIS had a "strong claim" for substantial compensation against Polamco, and for a much bigger sum than the three months' commission advised by Laytons. The court stated that Laytons had breached their duty to Mr Berry, and that no reasonably careful solicitor, specialising in this field as they did, would have concluded as they had.
The court went on to comment that if Mr Berry had received the correct advice, he would not have written to Polamco in the terms that he did, and that he would have pursued Polamco, if necessary by issuing proceedings against them.
Conclusion: This is an interesting "loss of chance" case. The judge stated that a client who consults a specialist can legitimately expect a shorter and more effective route to reasonably careful and skilful advice in that specialist field. A word of warning to all specialists out there!