Webb v MacDonald & Anor

Summary judgment is appropriate where a professional-negligence claim has no real prospect of success and no compelling reason requires a trial. In assessing advice on settlement, the court must allow for the difficult and time-sensitive judgments advocates make in litigation. An advocate is not negligent merely because a different view might later appear preferable; the advice must fall outside the range of advice reasonably available to a competent practitioner. Where the client’s legal arguments are weak, the settlement materially improves the likely litigation outcome, and the risks of trial are substantial, firm advice to settle may be reasonable. Counsel and solicitors may also advise that public funding cannot properly continue where the client is unlikely to do better at trial.

The claimant alleged that his barrister and solicitors negligently advised him to settle litigation brought by a bank concerning a mortgage over his home and liabilities under a guarantee. He alleged that they failed to run an insolvency-arrangement argument, undervalued arguments concerning interest and charges, and presented an unjustified ultimatum shortly before trial. The first defendant applied for summary judgment under CPR Part 24. The solicitors sought strike-out or summary judgment under CPR Parts 3.4(2)(a) and 24. The central issue was whether any pleaded breach had a real prospect of success, and whether there was any compelling reason for a trial.

1. Applications and approach. Summary judgment was granted for both defendants. The court could not resolve disputed facts or conduct a mini-trial, but had to consider whether the claimant’s assumed factual case disclosed a real prospect of establishing negligence. The claim was not struck out against the solicitors because that issue did not need to be decided.
2. IVA argument. The terms of the individual voluntary arrangement and the proof admitted for dividend purposes did not show that the bank had abandoned its security or relinquished its right to claim the debt from the secured property. Section 258(4) of the Insolvency Act 1986 and Rules 6.115 and 11.9 of the Insolvency Rules 1986 supported that conclusion. Advice that the argument was unlikely to succeed was therefore within the range of competent advice.
3. Advice on the figures. The interest, charges and feeder-company arguments involved substantial evidential and legal difficulties. The barrister was entitled to weigh the uncertain prospects of success against the risk that the bank would recover substantially more at trial. The settlement was materially below the bank’s claim and preserved the claimant’s home. Applying the principles in Moy v Pettman Smith [2005] 1 WLR 581, the advice was balanced, practical and reasonable. It was not necessary to show that every calculation was indisputably correct.
4. Alleged ultimatum and adjournment. On the assumed facts, the claimant understood that rejection of the advice could lead to notification to the Legal Services Commission, withdrawal of public funding and counsel’s inability to continue. That practical advice was not shown to be negligent. The defendants were not required to devise means of retaining public funding, obtain an unjustified adjournment, or allow the claimant to seek alternative counsel immediately before trial. Under Hanning v Maitland (No 2) [1970] 1 QB 580, continuation of public funding could not properly be advised where the claimant was not more likely than not to improve on the settlement.
5. Rule 4.93 argument. Rule 4.93 of the Insolvency Rules 1986 concerned proof of interest in the company’s liquidation. It did not restrict the bank’s claim against the claimant under the guarantee after demand.
6. None of the allegations had a real prospect of success, and there was no other compelling reason for a trial. Summary judgment was accordingly entered for both defendants, with costs to be addressed separately.