Sciortino v Beaumont – When a Second Advice Becomes a Second Chance to Sue
In a recent decision, the Court of Appeal re-visited the question of the date on which a cause of action in negligence would arise where legal advice is given on separate occasions about the same or similar issues. The Court also considered whether or not a claim in negligence against a solicitor or barrister could be determined by way of summary judgment since, unlike in other cases of professional negligence, the court is in a position to make its own assessment of the relevant standard of care without the need for expert evidence.
Background Facts
The Respondent was instructed by the Appellant, through the Kingston and Richmond Law Centre, to advise on the prospect of appealing orders for possession and sale of a property which were made in favour of the trustee in bankruptcy (“the Trustee”) in the course of the Appellant’s bankruptcy. In conference on 20 April 2011 the Respondent advised that the court had no power under the Insolvency Act 1986 to make its order of 29 July 2010, which had set aside an earlier order of 19 July 2010 dismissing the Trustee’s application. Therefore, the Respondent advised the Appellant to appeal on the basis that no orders for sale and possession should have been made and that the application stood have stood dismissed as per the order of 19 July (“the Dismissal Argument”). Additionally in May 2011, the Respondent prepared a draft Notice of Appeal and skeleton argument. In an email accompanying the skeleton argument, the Respondent advised that the appeal had reasonable prospects of success but that the Appellant should nonetheless try to settle the case. The Respondent also advised that the best time to do so would be once permission to appeal was granted but before the hearing of the appeal itself. This advice was confirmed in conference later in May 2011 (“the April/May Advice”).
The Respondent’s strategy suffered a setback when the permission hearing and substantive hearing of the appeal were listed together in a “rolled-up” hearing. Preparations for the appeal hearing nonetheless continued and on 26 October 2011, the Respondent drafted an advice for the Legal Services Commission in order to increase the limit of the legal aid certificate for the case. The Respondent confirmed that he had re-read the transcript of his conference with the Appellant on 20 April 2011, had considered materials recently sent by the Trustee addressing the Dismissal Argument, and advised that the appeal had a 55-60% prospect of success (“the October Advice”).
The appeal was heard on 15 November 2011 and the judge, Mr Mark Cawson KC, rejected the Dismissal Argument. In a detailed judgment, he found that “it is difficult to see what conceivable basis the bankrupt could have had for resisting the making of the order of 29 July 2010.”[27].
The Negligence Claim
The Appellant issued a claim in negligence against the Respondent on 25 October 2017. The Respondent’s advice concerning the Dismissal Argument was addressed in a single paragraph of the Particulars of Claim (paragraph 68) and the allegations of negligence covered both the April/May Advice and the October Advice.
The Respondent applied to strike out paragraph 68, with summary judgment in the alternative, on the basis i) that the claim was statute-barred and ii) that it was not legally arguable that the Respondent had been negligent in any event.
The application was heard at first instance by Master Teverson who considered the wording of paragraph 68 to mean that the October Advice was part of the same cause of action as that arising from the April/May Advice. The Master therefore held that the cause of action pleaded in paragraph 68 was statute-barred. Master Teverson gave further weight to the fact that the appeal had already been served and responded to by the time of the October Advice, suggesting that the advice on the merits was therefore a continuation of the advice given earlier in the year.
The Appellant appealed and HHJ Jarman KC agreed with Master Teverson, stating:
“The negligence alleged in paragraph 68 is advising the claimant to bring a hopeless appeal… Assuming that the advice in fact given was negligent, then loss occurred as soon as the appeal was filed and costs were incurred because of it, which had the effect of diminishing the amount eventually available to the claimant from the proceeds of sale of his home.” [34]
However, the Appellant was successful on a second appeal to the Court of Appeal, with Coulson LJ holding that both the Master and the Judge were wrong to hold that the claim arising out of the October Advice was statute-barred.
Further Legal Advice and Limitation Issues
Coulson LJ considered law in relation to limitation periods and actions for negligence, referring specifically to authorities such as Knapp v Ecclesiastical Insurance Group Plc[1] and Khan v RM Falvey[2], and summarised the law as follows:
“Where a defendant’s breach of duty has caused a claimant some loss outside the limitation period, the fact that further loss is caused by that same breach within the limitation period will not save the claim from being statute-barred. What is more, that result cannot generally be avoided by the suggestion that there was a continuing duty on the part of the lawyer to review his or her previous advice.” [50]
However when considering the case of two distinct breaches of a duty of care, his Lordship held:
“I do not accept that there is any rule of law that requires the court to ignore for limitation purposes a second negligent advice (where that breach of duty gave rise to specific loss), and to find that, because the ultimate issue on which both advices were sought was the same or similar – should there be an appeal and will it succeed? – there was only one cause of action and it accrued at the date of the first negligent advice.”[70]
In the present case, Coulson LJ found that by the time of the October Advice, “[t]he Respondent was being asked to give different and more comprehensive advice, in very different circumstances” [68] for the following reasons:
- The Respondent had access to additional materials from the Trustee to assist with his advice on the merits.
- The purpose of the October Advice was to increase the legal aid certificate for the Appellant’s appeal.
- The Respondent’s original settlement strategy had been thwarted and it was therefore open to the Respondent to advise that in light of the new circumstances, the appeal had less prospect of success or should be abandoned entirely. The Appellant was not “irrevocably committed to the costs of a hearing if that hearing was going to result in defeat.” [67].
Coulson LJ considered that authorities such as Knapp and Khan did not assist the court in the present case since:
“Those authorities are not concerned with the situation where there are two separate breaches, or two separate causes of action, one outside and one inside the limitation period. Chadwick LJ’s reference [in Khan] to the possibility of a later “supervening” event (which I do not consider should be elevated into any form of test or rule in any event) is intended to highlight the different considerations that may apply where, for example, there are two separate breaches of duty. In my view, a second breach, giving rise to a separate cause of action, would a fortiori comprise a “supervening event”.” [75]
His Lordship went on to find that the circumstances of the present case were closer to those of St Anselm Development Company Ltd v Slaughter & May[3] (a case in which general advice was sought pursuant to two separate sets of instructions for two different properties) and that the claim founded on the October Advice was not statute-barred but simply gave rise a separate, but smaller, claim.
Summary Judgment in Cases of Professional Negligence
The Respondent argued by way of Respondent’s Notice that, notwithstanding the limitation question, paragraph 68 of the Appellant’s Particulars of Claim should stand struck out since the claim was not tenable at law. Neither Master Teverson nor HHJ Jarman KC had felt that the merits of the claim were capable of summary determination and the Court of Appeal agreed.
Coulson LJ noted that the court is in a position to make its own assessment, without the need for expert evidence, as to the appropriate standard of care in cases of professional negligence against barristers or solicitors. After noting that there was no authority to suggest that this meant that claims of professional negligence against barristers or solicitors could be summarily determined, his Lordship conceded:
“So whilst I accept in theory that the absence of expert evidence may make allegations of professional negligence against a solicitor or a barrister capable of resolution at an interim stage, that will be very much the exception rather than the rule.” [88]
In the present case, Coulson LJ found that summary judgment would be “an unsatisfactory use of the civil litigation system” [93] since any appeal from the Court of Appeal’s decision would take longer to be heard than the trial of the issue itself. Furthermore, Coulson LJ held that the lower courts were not wrong to have declined to deal with the merits by way of summary judgment because the allegations required a detailed consideration of the factual background, including cross-examination of the Respondent.
Conclusion
This decision provides nuance to the discussion of when a second advice from a lawyer on the same issue will give rise to a separate cause of action, and emphasises the need for a careful analysis of the facts. Both Coulson LJ and Stuart-Smith LJ cautioned against treating the observation in Khan about a “supervening act or omission” as giving rise to a test which could distract from the question of whether, on the facts, there was a separate breach of duty which gave rise to its own distinct cause of action.
The decision also highlights that while summary determination of a professional negligence claim against lawyers may be possible, the exercise of the court’s powers will be tempered by practical considerations, such as whether it would be quicker to list the matter for trial than to await the outcome of any appeal of a summary judgment decision. Furthermore, it is clear that the need to explore issue of fact at trial will weigh heavily against concluding the proceedings at an interim stage, making the summary determination of such professional negligence claims a clear exception rather than the norm.
Written by Sahana Jayakumar.
[1] [1997] EWCA Civ 2616
[2] [2002] EWCA Civ 400
[3] [2013] EWHC 125 (Ch)
