Case study - missed court deadline solicitor negligence and funding of professional negligence

Missed court deadline - claim struck out

We currently act for a client who has suffered a financial loss due to her solicitors missing a deadline to file amended particulars of claim at court resulting in her claim being struck out (effectively ended). The solicitor in question attempted to undo the strike out by applying to the court for relief from sanctions but the court refused and the client’s case ceased with no opportunity to bring the claim again.

There is no prospect of an appeal being successful in these circumstances and the client has lost the opportunity to bring her original claim worth £700,000.

The original case that the opponent solicitors were dealing with was an accountant’s negligence where they failed to claim various tax reliefs for the client. The client’s business suffered greatly and ultimately failed due to the negligence.

Challenges raised by client's situation

• Finding the best funding method for a professional negligence claim - the core challenge here related to quantum of loss and recoverability, not legal liability. We know the opponent has no defence to negligence on face of it but the test for damages (the amount the client can claim) in solicitors’ negligence cases is not what the original case damages would have been but what chance they would have had of getting those damages. I.e. if the original case against the accountants had an 80% chance of succeeding and the case was worth £100,000, damages in the current case would be likely assessed as £80,000. If it had a 20% chance of success, then the damages would be £20,000 and so on. Therefore, the challenge is to assess the chance of success of the original claim.

• Given cost and other complications of litigation funding, preparing an overall cost benefit analysis - and to explain this to the client in a way that manages expectations.

Solutions

• Conditional Fee Agreement (‘CFA’) - because of the risk to the client of adverse costs (i.e. if she lost, she would have to pay the other side’s costs due to not being able to fund an insurance policy to cover that) we have secured a barrister to do an initial advice free of charge to support our advice. This means that the client can enter the litigation with full knowledge of the risks and two opinions on the chance of succeeding. We will take the case in stages to minimise the financial risk to our client.

• Expert accountant advice on the claim value - obtaining this and deciding how it can be funded are dependent on the outcome of stage 1 described above. In other words, we ensure that financial outlays are minimised while maximising the client's funding options and taking things on a cautious, step by step basis.

• Ensuring that our client fully understands all the options and risks - as with all potential professional negligence claims, we are mindful that the client has suffered a large life changing loss. She has also lost her business and been let down by two sets of professionals. We manage her expectations by setting out all of the risks early on and front loading the investigation so that she can be in as strong a position as she can be regarding the financial risks of proceeding with the case. This won’t be the best tactic in all cases but this is a tailored approach specific to this particular client’s needs.

• Seek an early but financially appropriate settlement if possible - using our experience and tactical skills to work towards securing a settlement for the client that compensates her for at least a good proportion of her loss but which also takes into account the complexities and inherent risks of any litigation claim and where it may not be the client's sole decision as to how and when to settle (because funding is not by the hour and may also include litigation funding, so the funders have an input into settlement decisions).