Clare v Buckle Mellows (a firm)

In a solicitor-negligence claim based on an omission, the claimant must prove on the balance of probabilities what she would have done if properly advised. Where loss depends on a third party’s hypothetical action, it is enough to show a real or substantial, rather than speculative, chance of a better outcome. That principle does not require a court to speculate on a factual scenario unsupported by the evidence or submissions.

Damages for distress are unavailable where the retainer concerns economic advice and financial protection rather than the avoidance of mental distress.

The claimant instructed the respondent solicitors during the breakdown of her marriage and the proposed dissolution of a haulage partnership. The solicitors failed to advise her about joint and several liability for partnership debts, the risks of remaining a partner and the available means of disengagement.

The Lincoln County Court found breach of contract and duty of care but dismissed the claim, holding that earlier withdrawal had not been shown to be causative of loss and that an individual voluntary arrangement was inevitable. The appeal concerned causation, the alleged lost chance of avoiding the arrangement and its costs, damages for distress, nominal damages and costs.

1. Appeal dismissed by a majority. Pill LJ held that the claimant had not proved loss caused by the solicitors’ breach. Sir Christopher Staughton agreed. Smith LJ dissented and would have allowed the appeal.
2. The correct approach in an omission case was to determine on the balance of probabilities what the claimant would have done if fully advised about her options and the risks of remaining in the partnership. Where loss depended on hypothetical third-party action, the claimant had to show a real or substantial rather than speculative chance. The principles derived from Allied Maples v Simmonds and Simmonds [1995] 1 WLR 1602 did not prevent a judge from finding that no such chance existed.
3. Pill LJ held that the trial judge was entitled to rely on the evidence and submissions before him. He was not required to speculate about an IVA-avoidance scenario which had not been properly explored below. The judge was entitled to conclude that an IVA was inevitable, notwithstanding the possibility that earlier withdrawal might have limited the claimant’s liability to pre-January debts.
4. Smith LJ considered that proper withdrawal in January 2000 would have given the claimant a real chance of avoiding the IVA and its substantial costs. She also considered that the bank’s refusal to release her personal covenant would not have prevented dissolution of the partnership. That reasoning was not accepted by the majority.
5. The court agreed that damages for distress, inconvenience or injury to feelings were not recoverable because the retainer concerned economic advice. The judge was also entitled to refuse nominal damages where they would have no costs effect and to award the respondent its costs where the issues were inextricably linked.

• Court of Appeal (Civil Division): by a majority, dismissed the appeal.
• Lincoln County Court: His Honour Judge Peter Clark found breach of contract and duty of care but dismissed the claim for failure to prove causation and loss, and ordered the claimant to pay the respondent’s costs.