Wright v Lewis Silkin LLP

Where contractual and tortious duties overlap, recoverability is governed by the contractual remoteness test. Damage must be of a kind which a reasonable person in the defendant’s position would have contemplated as not unlikely when the contract was made. Wasted costs caused by jurisdictional uncertainty may satisfy that test. A lost chance that a judgment debtor would voluntarily pay, caused by delay and subsequent deterioration in the debtor’s finances, may be too remote. The assessment of a real or substantial lost chance is primarily for the trial judge and should not be disturbed absent an error of principle or perversity.

Timothy Wright sued his former solicitors, Lewis Silkin LLP, for professional negligence. The solicitors had failed to advise him that a clause providing for English law did not confer exclusive jurisdiction on the English courts. The High Court found that, with proper advice, Mr Wright would have insisted on such a clause. It awarded £2 million for a 20% lost chance of recovering a judgment debt from Deccan and £40,000 for wasted jurisdiction-related costs.

Lewis Silkin appealed on the adequacy of the advice analysis, the valuation of the lost chance, and remoteness and scope of duty. The central issue was whether the lost chance of voluntary payment fell within the recoverable loss caused by the omission of an exclusive jurisdiction clause.

Lord Justice Jackson gave the judgment, with which Lord Justice Patten agreed. The appeal was allowed on the third ground only. The £2 million award for the lost chance was set aside, leaving recoverable damages of £40,000 plus appropriate interest.

1. Advice and causation. It was unnecessary for the trial judge to specify precisely what advice the solicitor should have given. The claimant had firm views, supported by his experience and the advice he had received, and would have insisted on exclusive English jurisdiction even if advised against it. The failure to raise the issue was therefore causative.
2. Lost chance. Applying the principles in Allied Maples v Simmons & Simmons [1995] 1 WLR 1602, where loss depends on what a third party would have done, damages may be assessed by reference to a real or substantial chance rather than on an all-or-nothing balance-of-probabilities basis. Valuing such a chance is primarily for the trial judge. The Court of Appeal should not substitute its own assessment absent an error of principle or a perverse conclusion. The 20% assessment was open to the judge on the evidence.
3. Remoteness. Under Wellesley Partners LLP v Withers LLP [2015] EWCA Civ 1146; [2016] Ch 529, the contractual remoteness test applied. The £40,000 wasted costs were the kind of loss reasonably foreseeable from the absence of an exclusive jurisdiction clause. By contrast, the loss of a chance that Deccan would voluntarily pay after judgment, following a later deterioration in its finances, was not damage of a kind which either party would have regarded in May 2008 as not unlikely.
4. Scope of duty. Lewis Silkin was permitted to raise the scope-of-duty argument on appeal because the relevant evidence and findings were already before the court and the issue was closely connected with remoteness. The court observed, as an alternative basis, that additional litigation costs and losses caused by an English court declining jurisdiction fell within the duty, but the lost chance of voluntary payment did not. The decision was based solely on remoteness.

• Court of Appeal (Civil Division): Appeal allowed on the third ground only. The award was reduced from £2.04 million to £40,000 plus appropriate interest: [2016] EWCA Civ 1308.
• High Court, Queen’s Bench Division: Hamblen J found a breach of duty in failing to advise on exclusive jurisdiction and awarded £2.04 million, comprising £2 million for the lost chance and £40,000 in wasted costs.