Withers LLP v Harrison

A professional adviser is judged by the standard of a reasonably competent practitioner with the relevant expertise, assessed in the light of information available at the time. Hindsight is not a test of negligence. A lawyer is ordinarily entitled to rely on a client's factual instructions, although the extent of any necessary investigation depends on the circumstances. Advice that litigation is reasonably arguable is not negligent merely because the claim later fails, provided the view was one a competent lawyer could reasonably reach. Loss caused by a client's refusal to follow clear advice may break the chain of causation.

Withers LLP claimed unpaid legal fees from Mrs Harrison. She counterclaimed in negligence, alleging that Withers had wrongly advised her to pursue proceedings against her former husband to set aside an ancillary relief judgment obtained in 2002, and to seek a freezing injunction.

The proposed claim relied principally on an allegedly undisclosed bank account and an alleged fabricated break-in. Disclosure later showed that the relevant £25,000 had been disclosed as an asset of Interchange. Withers and counsel repeatedly advised Mrs Harrison that the claim was highly risky and should be discontinued. She refused, pursued the proceedings in person after terminating the retainer, and incurred further costs. The issues were whether the advice had fallen below the professional standard and whether it caused the claimed losses.

1. Judgment for Withers. Mrs Harrison's negligence counterclaim was dismissed, and Withers succeeded on its claim for unpaid fees.
2. The applicable standard was that of a reasonably competent commercial solicitor with the relevant expertise. The assessment had to be made by reference to events as they appeared at the time, without hindsight. A professional is not liable merely because an informed judgment later proves unsuccessful.
3. Mr Wass was not negligent in treating the 726 account as an Interchange account which had not been disclosed. The documents, the disclosure order, the bank's covering letter, Mrs Harrison's instructions and Mr Coussens' evidence all supported that conclusion. It was not obvious, even on later examination, that the account was an internal RBS account in which Interchange had a beneficial interest.
4. The legal team was entitled to conclude that there was a properly arguable claim to set aside the Baron judgment for fraud or material non-disclosure, although the prospects were poor. Material non-disclosure had to be capable of producing a substantially different order, while fraud required new evidence which entirely changed the nature of the case. The conclusion that the claim was pleadable was a judgment call open to reasonably competent lawyers.
5. The lawyers did not encourage Mrs Harrison to proceed. They repeatedly warned her of the serious risks, advised against the freezing injunction and later advised immediate discontinuance. She continued because she refused to accept that advice. Her conduct was therefore the effective cause of the subsequent losses and broke the chain of causation. The same conclusion would follow by way of contributory negligence.
6. After the relevant advice to discontinue, Withers could not be liable for further costs incurred by Mrs Harrison or payable to Mr Harrison.

The judgment records that HHJ Seymour QC gave summary judgment for Mr Harrison on 31 January 2008. Permission to appeal was refused by the Court of Appeal, including on a renewed oral application. Those decisions formed part of the factual history but did not determine the negligence issues before Mrs Justice Sharp.