D Morgan Plc v Mace & Jones (a firm)

A solicitor must exercise independent professional judgment when relying on specialist counsel. Reliance is generally permissible, particularly in a specialist field, but the solicitor must question advice that is obviously or glaringly wrong and must clarify a material inconsistency between successive advices. A failure to seek clarification is actionable only if it caused loss. The claimant must prove both that different advice would or should have been given and that it would have led to an earlier or otherwise better outcome. Hypothetical causation must be assessed against the actual evidence and the claimant’s conduct, priorities and delays. A theoretical loss-of-profit model unsupported by contemporaneous business evidence is insufficient.

The claimant alleged that its solicitors negligently advised and acted in relation to planning and waste-disposal proposals for Bold Heath Quarry. The central complaint concerned advice from leading counsel in 1998, which appeared inconsistent with earlier advice that waste could be imported under an implied planning permission. Further allegations concerned the proposed use of an application under section 73 of the Town and Country Planning Act 1990, the enforcement-notice appeal, and an environmental statement.

The claim sought wasted expenditure, additional costs and lost profits said to result from delay in obtaining planning permission. The court considered liability, causation, recoverability and quantum.

1. Liability. The solicitor was negligent in failing to clarify whether counsel’s 1998 advice had displaced the earlier advice based on Irlam Brick Company v Warrington Borough Council. The two advices created a material risk of misunderstanding. The remaining allegations were rejected. The advice to pursue an application under section 73 was sufficiently clear, counsel’s advice on environmental statements was not obviously or glaringly wrong, and the enforcement-notice strategy was not shown to be negligent.
2. Reliance on counsel. The solicitor was entitled to rely on specialist planning advice unless it was obviously or glaringly wrong. Seeking clarification on one issue did not make the solicitor responsible for alleged errors in other, distinct advice.
3. Causation. The claimant failed to prove that clarification would have resulted in advice that only a fresh planning application could succeed. Counsel would probably have maintained the advice to pursue section 73. Even assuming different advice, the claimant would have acted at its own pace. Its commercial strategy, opposition to environmental assessment, delays and later conduct meant that an earlier planning permission was not established on the balance of probabilities.
4. Loss. The claimed wasted costs and additional costs were not caused by the solicitor’s breach or would have been incurred in any event. The loss-of-profits methodology was fundamentally unreliable because it started with theoretical quarry output, assumed corresponding demand for inert waste, and relied on unsupported internal figures and another operator’s gate prices. The claim could not be valued on that basis.
5. The professional-negligence claims were dismissed. Costs were to be dealt with separately.