Thompson v Arnold – limit on duty not to take advantage of other side’s mistake concerning quantum of settlement [2007] EWHC 1875 (QB)

Where a party makes a mistake when settling a dispute, can it reverse the position where the other side appreciated the mistake but did not point it out? The courts have on occasion helped the party making the mistake where it was sufficiently obvious that the other party knew of the mistake or ought reasonably to have known.

In this case, the claimant’s solicitor and counsel failed to appreciate that where a claimant pursues to judgment or settlement a claim for damages for an injury which subsequently proves to be fatal, their dependants have no right of action under the Fatal Accidents Act 1976. They settled the claimant’s claim for £120,000 before the claimant’s death which resulted from a misdiagnosis that a lump in her breast was benign. This claim should have included a claim for “lost years” in respect of future loss of earnings. It but did not because the claimants’ lawyers incorrectly assumed that they could bring a dependency claim were the claimant to die.

The defendant doctor’s solicitor was uncomfortable because she felt that the claimant’s solicitor may have made a mistake. but she was also clear that she could not, consistent with her professional duty to her client, point out the mistake to her opponent. She went as far as to raise the possibilities of provisional damage awards or interim payments, hoping that her opponent would realise that she risked forfeiting the dependency claims if she settled the claimant’s claim. However, the claimant’s solicitor did not realise her mistake.

In these circumstances, the judge decided that it was not unconscionable for the defendant to rely upon the settlement. The mistake was entirely of the claimant’s lawyers’ own making and was not caused by representations from the other side.

Comment: it is notable that in both this and Thames Trains Ltd v Railtrack plc v Adam, in which the defendant’s solicitor failed to tell the claimant’s solicitor of an offer to settle sent by fax, the solicitor who made the mistake had not acted scrupulously themselves. In Thompson, the claimant’s solicitor had submitted a deliberately over-inflated claim. In Thames Trains, the claimant’s solicitor had earlier that morning inaccurately told the defendant’s solicitor (the parties were reversed in that case) that there were no further monies available, a statement disproved by the increased offer made a few hours later. The court will judge each case on its facts. It was material in the present case that the defendant’s solicitor was well-regarded by the judge and had been at pains to act properly. It was also relevant that the claimant’s dependents were likely to have a good claim against their solicitor, given that the mistake was one which should not have been made by any reasonably proficient personal injury practitioner.