Commodities Research Unit International (Holdings) Ltd & Ors v QSP Residual Recoveries LLP

On applications for permission to appeal, the Court of Appeal reaffirmed the limits of appellate intervention. Findings of fact will not be disturbed absent demonstrable error or a conclusion no reasonable judge could reach. Evaluative assessments of a lost chance, bargaining strength and costs are similarly matters for the trial judge unless an error of law or principle is shown. A professionally negligent advice claim may be advanced on a secondary case where the pleading identifies the relevant contractual feature, alleged omission and resulting loss. A pleaded 100% chance does not exclude argument for a lower percentage. The assessment of a lost chance has no fixed formula, but must address the chance and its value. Both applications were dismissed.

CRU brought a professional negligence claim against its former solicitors concerning advice given in connection with the termination of a former chief executive’s employment and the treatment of his long-term incentive rights. Dingemans J found a breach in relation to the failure to obtain the general terms of the employment contract, awarded damages of £118,125 plus interest, and ordered CRU to recover 40% of its costs: [2016] EWHC 727 (QB).

CRU sought permission to appeal on findings of fact, breach, quantum and costs. The Firm cross-applied on the pleading of CRU’s secondary case and the assessment of loss. The central question was whether any ground had a realistic prospect of success or disclosed an error of law, principle or approach warranting appellate intervention.

1. Disposition. Henderson LJ dismissed both applications for permission to appeal. The order requiring the Firm to pay £118,125 damages, £6,092.34 interest and 40% of CRU’s costs remained undisturbed.
2. Findings of fact and breach. Applying the approach in Henderson v Foxworth Investments Ltd [2014] UKSC 41, an appellate court should not interfere with a trial judge’s factual conclusion absent demonstrable error unless it is plainly wrong, in the sense that no reasonable judge could have reached it. The judge was entitled to find that the September 2007 meeting did not contain advice that the former CEO’s incentive rights would survive termination. The evidence supported his conclusion, and the question was quintessentially one for the trial judge.
3. The alleged failure to obtain the former CEO’s complete file did not disclose a realistic appeal point. The solicitor’s duty depended on what was required in the particular circumstances. The expert evidence, expressed at a high level of generality, did not prevent the judge from concluding that no further investigation was required when the incentive issue had been put aside in 2007 or had already been agreed in 2008.
4. Loss and pleading. Assessment of the value of a lost chance and the parties’ hypothetical bargaining strength involved evaluation for the trial judge. The judge had directed himself correctly by reference to Allied Maples v Simmons & Simmons [1995] 1 WLR 1602 (CA). There were no fixed rules for valuation, and the approach adopted was tenable. The secondary case was adequately pleaded because the particulars identified the payment-in-lieu clause, the alleged failure to discover it and its possible effect on the compensation due. Pleading a 100% chance did not preclude argument for a lower percentage.
5. Costs. Costs were within the trial judge’s broad discretion. Given the failure of CRU’s primary claim and its recovery of only a small proportion of the sum sought, a 40% costs order was permissible. No misdirection, error of principle or clearly erroneous assessment was shown.

• High Court of Justice, Queen’s Bench Division: Dingemans J determined CRU’s professional negligence claim, awarding damages and interest and ordering recovery of 40% of costs: [2016] EWHC 727 (QB).
• Court of Appeal (Civil Division): Henderson LJ dismissed both cross-applications for permission to appeal.