The long-awaited Supreme Court judgment on solicitors’ professional negligence should stem the tide of similar under-settlement claims, experts have said.
Justices yesterday ruled unanimously they should overturn the Court of Appeal’s decision in Perry v Raleys Solicitors, giving victory to the defunct firm and its indemnity insurers.
Appeal judges had ruled the firm should be liable for failing to advise its former client, a retired miner, that he qualified for a services award, as well as the general damages award he had secured.
But the Supreme Court found the original trial judge, who had ruled in favour of Raleys, was not merely entitled but obliged to apply his perception that Perry was lying about the effects of his injuries. The court asserted that the credibility of oral testimony was a matter for the trial judge and not the appellate court. Perry could not prove that, properly advised by Raleys, he would have made a claim to a services award within time.
The decision has been hailed as welcome news for the solicitors professional indemnity insurance market and for practitioners generally, with a higher threshold set for ex-clients making under-settlement claims.
Jeremy Riley, head of professional risk at national firm Kennedys and member of the Forum of Insurance Lawyers, said: ‘Retrospective analysis of long since settled injury claims may still continue, and result in negligence claims against the solicitors who advised on the original settlement.
‘However, if a mistake has been made on a relatively minor issue, such as raising the issue of the cost of care, or services before settlement, then any such claim will be rightly scrutinised through the same retrospective lens.’
Nick Bird, partner at City-headquartered firm RPC, added: ‘Had the court ruled in favour of the claimant, it may have opened up a new category of professional negligence claims against professionals.
‘The Supreme Court has sent out a strong message and has corrected the tendencies of some of the lower courts to apply the existing law in favour of claimants.’
Ross Baker, a partner at insurance law firm BLM, explained that just because Perry’s credibility would have been an issue in the evaluation of the potential success of his services claim, this did not mean that it could not come under detailed scrutiny for the purposes of the case on causation.
‘Together with restating that the burden of proof is on the claimant, the judgment goes some way to the pendulum swinging rather more to the centre in the handling of lost opportunity claims,’ he added.