Causation in claims against solicitors

When a solicitor gives advice that his client has a strong case to start litigation rather than settle and the client then does just that, the normal inference is that the advice is causative. The judge below should have approached the case on the basis that the evidential burden had shifted to Linklaters to prove that its advice was not causative. Levicom’s appeal succeeded Levicom International Holdings BV v Linklaters – see article on page 9.  

Disclosure and privilege

The Court of Appeal has held that an insured solicitor is not entitled or bound to disclose to his insurer, on inception, renewal or notification, confidential and privileged documents or information of the client without the client's consent. For further details, see the briefing on our website Quinn Direct Insurance Ltd v The Law Society of England and Wales.  

Avoidance of ATE cover

Following proceedings in which the defendant was awarded indemnity costs against the claimant company which was subsequently wound up, the defendant sought to recover the costs from the claimants after the event (ATE) insurers under the Third Parties (Rights against Insurers) Act 1930. The insurers were held to have been entitled to avoid the policy following a misrepresentation of the risk and non-disclosure and the claim against them was dismissed Persimmon Homes Ltd v Great Lakes Reinsurance (UK) plc.  

Negligent valuations

Negligence in the method used to arrive at a valuation figure will not lead to liability on the part of a surveyor unless the valuation figure produced by the breach of duty is outside the permissible bracket. In this case concerning the valuation of hotels, the figures were within the relevant margin of error of between 10 per cent and 15 per cent K/S Lincoln v CB Richard Ellis Hotels Limited No 2.  

Part 36 offers

The Court of Appeal has confirmed that Part 36 is a self-contained code which requires a party to withdraw an offer if they do not want it to remain open for later acceptance. The common law rules of offer and acceptance whereby a subsequent offer by the same party or a rejection or counter-offer by the other party will extinguish the offer do not apply to Part 36 offers Gibbon v Manchester City Council.  

Disclosure of ATE insurance policy

The court had no jurisdiction to order disclosure and inspection of the ATE insurance policy obtained by the claimants in group litigation and the policy was privileged. It was produced for the purposes of litigation and its terms, which had been individually negotiated, reflected the legal advice of the claimants’ solicitors and the views formed by the solicitors and insurers as to the risks of the litigation Arroyo v BP Exploration Co (Colombia) Ltd.  

Withdrawal of pre-action admissions

The defendant was entitled to resile from its pre-action admission of liability where the claim increased fivefold from £600,000 to more than £3.4 million by the date proceedings were begun and the claimant was not prejudiced by the defence Gunn t/a Chipperfield Garden Machinery v Taygroup Ltd.  

Recovery of success fee

If a defendant denies liability and serves a defence containing multiple paragraphs supporting his position, a 100 per cent success fee is likely to be considered reasonable. The claimant stands a better prospect of having the success fee approved if it is staged Peacock v MGN Ltd.  

E-disclosure practice direction

Practice direction 31B on the disclosure of electronic documents comes into effect on 1 October 2010. It will apply to all multi-track actions begun after that date. The Allocation Questionnaire will be amended to include questions about e-disclosure.  

Insurance contract law reform

The Law Commissions have published two further issues papers. Responses are requested for Paper 7 The Insured's Post-Contract Duty of Good Faith by 10 October and for Paper 8 The Broker's liability for premiums: should section 53 be reformed? by 19 October 2010.