The decision in Langsam v Beachcroft LLP and Others (2012) EWCA Civ 1230 raises a number of interesting issues about the process of settling litigation and the responsibilities of solicitors and counsel.
The defendant firm acted for the claimant in a claim against his former accountants. It was a loss of chance claim, and many issues arose both about the evidence of what would have happened and legal issues about the implications. Therefore it was a fairly normal professional negligence claim; not huge amounts to say on breach buts lots of argument over causation and loss.
The defendant advised the claimant about the potential recovery at trial. The range of possible recoveries was vast. They gave fairly detailed advice and also obtained advice from leading counsel. Broadly, the defendant and leading counsel agreed on the likely recovery at trial. The case went to mediation and it then settled by later negotiation.
Mr Langsam apparently then suffered from the well known condition of post- settlement remorse, a condition known to lawyers for a number of years. He sued the defendant (but not leading counsel) on the basis that their advice was overly pessimistic, that a full range of potential recoveries should have been given rather than the lowest likely recovery, and that the defendant continued to owe a duty to give their own advice even though leading counsel was involved. The claim failed. The court accepted that leading counsel’s advice was not negligent and nor was that of the defendant.
Interesting questions arise about the settlement process and the relationship between solicitors and counsel. Much of the decision looks at the notes of discussions at mediation and after, and are a salutary reminder of the importance of documenting all offers and discussions during mediation and settlement. The process is often fast changing and is becoming the forum for the majority of settlements. One of the downsides of mediation in particular is the lack of documentation about what actually happens during the day.
With post settlement remorse being a growing condition amongst litigants, and the difficulties of balancing unrealistic expectations with the need to give prudent, yet realistic advice, the ability to justify advice is vital. It appears that the defendant’s approach was well documented and no doubt that assisted in the defence of this case.
The other issue of interest is the relationship between solicitors and counsel. The court accepted the well-known principle that a solicitor, notwithstanding that counsel is involved, retains a duty to consider counsel’s advice and to assess whether it is reasonable. If the solicitor has particular expertise in the field, he has to consider counsel’s advice with the benefit of that expertise. More will be expected, rightly, from a specialist than from a generalist. So far, so uncontroversial. What is a little more progressive is the finding that, when giving advice, the solicitor does not necessarily have a direct duty to the client, when counsel is retained beyond the obligation to "check" counsel’s advice.
This is a potential source of additional comfort for law firms, but of course each case will depend on its own facts. In fact, Longmore LJ said that on the facts, he regarded this as a case where the solicitor and leading counsel had advised jointly so that the solicitor's duty went beyond merely "checking" leading counsel's advice. Clearly, any assessment is highly fact sensitive.
In this case, the court has clearly reached the "right" decision. Litigation is difficult and there is rarely a right answer. There is merely opinion and judgement. With such subjective decision-making, there is a risk of post settlement remorse after the heat of negotiation has long cooled. This case is a salutary lesson to advisors reinforcing the importance of having the evidence necessary to protect against the risks of that growing condition.