Seery v Leathes Prior (a firm)

A solicitor’s duty is defined by the retainer, the client’s instructions and the circumstances known at the time. Advice reasonably incidental to the work must reflect the client’s experience, resources, objectives and tolerance of risk. A solicitor is not generally required to persuade a client to abandon an expressly chosen settlement strategy in favour of expensive and uncertain litigation. Nor is there a duty to recommend an unusual course, such as seeking personal warranties, without a proper evidential basis that it would be available and beneficial. A claim for professional negligence also fails where any better outcome is speculative.

The claimant sued his former solicitors for professional negligence concerning advice given while negotiating his departure from a company in which he was an employee, director and minority shareholder. He alleged that the solicitors should have advised him to delay settlement, pursue unfair-prejudice proceedings to obtain information and a share valuation, seek disclosure under his common-law rights as a director, obtain warranties, and receive advice about minority discounts.

The defendant contended that it had followed the claimant’s settled priorities: obtaining a prompt exit, securing funds for another business and avoiding costly, acrimonious litigation. The central issues were the scope of the retainer, breach, and whether any alleged breach caused a better outcome.

1. The claim was dismissed. The defendant firm had not breached its duty of care.
2. The scope of a solicitor’s duty depends on the agreed retainer and the client’s instructions. Advice reasonably incidental to the work must be assessed in the light of all the circumstances, including the client’s experience and resources. The principles summarised in Minkin v Landsberg (trading as Barnet Family Law) [2016] 1 WLR 1489 provided useful guidance.
3. The claimant consistently wanted a prompt settlement, immediate funds and avoidance of expensive, risky litigation. In those circumstances, the solicitors were not required to advise him to reverse course and pursue unfair-prejudice proceedings in the Chancery Division merely in the hope of obtaining more information or a better valuation. The advice to settle was a reasonable professional judgment in the circumstances known at the time.
4. A director’s common-law right to inspect company documents exists for the purpose of discharging duties to the company. It could not properly be invoked to obtain information for the claimant’s private litigation. The principles discussed in Oxford Legal Services Group Ltd v Sibbasbridge Services Ltd [2008] Bus LR 1244 and Conway v Petronius [1978] 1 WLR 72 supported that conclusion.
5. The solicitors were not under a duty to insist on personal warranties from the other shareholders. The proposal was unusual, unsupported by a workable draft or evidence that the warranties would have been offered, and likely to cause delay or stalemate.
6. The claimant had not shown that he believed a minority discount would automatically be applied because the company was closed. The discussion in Re Bird Precision Bellows Ltd [1984] Ch 419 did not establish a universal rule against discounts; valuation depended on the circumstances. Advice on that point would not have altered the claimant’s strategy.
7. There was no sufficient evidence that the claimant would have pursued High Court litigation or achieved a better result. Any assessment of the documents, valuation and eventual settlement was speculative. A full and final settlement could not ordinarily be reopened merely because better information later emerged.