Kenneth Elliot & Rowe (a firm) v Gallagher

Where a professional-negligence claim alleges that a lost opportunity to pursue litigation caused damage, the claimant must establish a real and quantifiable chance of success in the underlying claim. A claim found by the trial judge to be dishonest, with no prospect of success, cannot support a loss-of-chance award. The Court of Appeal is also very reluctant to interfere with detailed credibility findings made by a judge who heard the witnesses, absent a special feature justifying intervention.

A solicitor’s client appealed against judgment for the solicitors’ unpaid fees and dismissal of his negligence counterclaim. The counterclaim alleged that the solicitors had failed to advise him that limitation would expire in December 2002, thereby depriving him of the opportunity to pursue an insurance claim for the unpaid half of the policy proceeds.

The trial judge found that the client had been advised about limitation and that the underlying insurance claim was dishonest. Permission to appeal was limited to negligence and loss of chance. Permission to challenge the credibility and dishonesty findings was refused and was not renewed. The central issue was whether any recoverable loss could arise from failure to pursue an underlying claim found to have had no prospect of success.

1. Appeal dismissed. The challenge to the trial judge’s dishonesty findings was out of time. An extension was refused because no good reason for failing to renew the application had been shown and the proposed challenge was doomed to fail.
2. The Court of Appeal is very reluctant to interfere with findings made by a trial judge who heard the witnesses. Intervention requires some special feature. Here, the trial lasted approximately four days, the judge made detailed credibility findings, and he believed none of the witnesses called for the appellant.
3. Because the dishonesty findings could not be challenged, the appellant could not establish that he had lost any chance of succeeding against the insurers. A dishonest claim had no prospect of success. The prospects were still worse because the appellant had already received half the insured sum and might have been ordered to repay it if the claim had been litigated.
4. It was therefore unnecessary to determine the detailed negligence issue. Even assuming negligence, the absence of any prospect of success in the underlying claim meant that no quantifiable loss of chance had been established.

Lord Justice Wilson and Lord Justice Stanley Burnton agreed with Lord Justice Waller. Order: appeal dismissed.

• Court of Appeal (Civil Division): The appeal from the decision of HHJ Peter Latham dated 17 May 2007 was dismissed.
• Central London Civil Justice Centre: Judgment was entered for the solicitors’ fees and the client’s negligence counterclaim was dismissed. The judge also ordered indemnity costs on the counterclaim.