A barrister has been ordered to cover 40% of the damages awarded against a law firm after a former client brought action for negligence, even though proceedings against him were dropped.
Former London firm Merriman White and barrister David Mayall - who was instructed by Merriman White - were pursued for negligence after acting on a commercial claim which failed at a preliminary stage. The firm subsequently agreed to make a payment to the former client in bona fide settlement of the negligence claim.
After pleadings had closed in the negligence claim, the client agreed to no longer pursue Mayall on the basis that each side pay their own costs. Mayall denied being negligent.
However, in Percy v White & Anor the High Court ruled that Merriman White is entitled to a contribution from Mayall. Sitting as a deputy High Court judge, Chief Insolvency and Companies Court Judge Briggs said the firm did not have to prove the barrister had been negligent – only that there had been a ‘reasonable cause of action’ against the firm.
‘When determining entitlement, the party against whom a contribution is sought may seek to challenge whether the claimant had a reasonable cause of action against the defendant who compromised the claim. The extent of the inquiry is limited. The compromising party need only demonstrate that the assumed factual basis disclosed a reasonable cause of action,’ the judge said.
The court ruled that Merriman White and Mayall are liable for the 'same damage’, adding that it is ‘just and equitable to apportion the contribution according to responsibility’.
The court assessed the share of responsibility for the 'same damage' at 40% and invited the parties to agree an order.