Hicks v Russell Jones & Walker (a firm)

A solicitor must exercise the standard of a reasonably competent practitioner with the specialist experience which the retainer and the solicitor’s standing represent. The assessment is made by reference to circumstances as they appeared at the time, without hindsight. A legally aided solicitor must take reasonable steps to obtain promptly any legal-aid authority needed for appropriate work. Where a difficult evidential and tactical issue on an appeal plainly requires leading counsel’s advice, failure to obtain that advice in good time may constitute breach. Liability does not establish recoverable loss: the claimant must prove that competent conduct would probably have produced a better result.

The claimant sued his former solicitors in professional negligence. They had represented him and his former wife in an appeal concerning the proposed assignment of company actions, including a conspiracy claim, after the company owning a hotel had entered liquidation.

The Court of Appeal had allowed the appeal after admitting an August 1991 valuation which placed the hotel’s value below the debt owed to the secured creditor. The claimant alleged that the solicitors had negligently failed to obtain timely leading counsel’s advice on whether to answer the new evidence, and had thereby lost the opportunity to defeat the appeal.

The trial concerned liability and causation only. The central questions were whether the solicitors had breached their duty and, if so, whether competent preparation would probably have changed the appellate outcome.

1. Standard of care. The solicitor’s duty was to act as a reasonably competent solicitor, judged in the light of the circumstances existing at the time. The relevant standard was that of a solicitor with experience in commercial litigation, insolvency and complex appeals. The duty was not a warranty of perfection and did not impose liability for every error of judgment. The court applied the principles in Midland Bank v Hett, Stubbs & Kemp [1979] Ch 384, Saif Ali v Sidney Mitchell & Co [1980] AC 198 and Duchess of Argyll v Beuselinck [1972] 2 Lloyd’s Reports 172.
2. Because the clients were legally aided, the solicitors had to act as they would for private clients of moderate means. Their retainer did not require unfunded work, but they remained obliged to take reasonable steps to secure legal-aid authority promptly for work which they considered appropriate.
3. The question whether to respond to affidavits containing an adverse valuation was difficult and potentially decisive. It required advice from the leading counsel who would conduct the appeal. The solicitors’ primary breach was their failure to obtain that advice in good time, despite the issue having been apparent by the directions hearing. The pleaded failures concerning timely instructions, evidence planning, legal-aid arrangements and counsel’s advice were established to that limited extent.
4. The court found that, if consulted in good time, leading counsel would probably have advised against serving responsive evidence or obtaining a further retrospective valuation. That advice would have been reasonable, even if hindsight suggested that it was mistaken. The solicitors therefore were not negligent in failing to take those substantive steps themselves.
5. On causation, competent preparation would have left the appeal in materially the same position. The Court of Appeal would still probably have admitted and relied upon the August 1991 valuation, and would still have allowed the appeal. The claimant therefore failed to prove loss caused by the breach. The claim succeeded in part on liability but failed on causation, and only nominal damages were recoverable. The court declined to express obiter views on the separate and difficult insolvency arguments.

The present proceedings were a first-instance professional negligence action arising from the claimant’s representation in a 1998 Court of Appeal appeal. The Court of Appeal allowed Humberclyde’s appeal and directed the liquidator to accept its compromise terms. No citation for that decision is stated in the judgment.