Riad Tawfiq Al Sadik v Clyde & Co LLP & Ors

For the purposes of extended negligence limitation, the claimant needs knowledge in broad terms that he has suffered sufficiently serious damage and that it is capable of being attributed to the defendant’s acts or omissions. He need not know that the conduct was negligent, the precise value of the loss, or the eventual litigation outcome.

A continuing retainer does not ordinarily create a continuing duty to revisit earlier advice or discover past negligence. Such a duty requires an express undertaking or a necessary incident of a later instruction.

In a loss-of-a-chance claim, later judgments and events may be considered when assessing prospects. Reverse summary judgment is appropriate where the lost claim is demonstrably hopeless, but fact-sensitive causation issues ordinarily require a trial.

The claimant brought professional negligence proceedings against former legal advisers concerning their conduct of litigation in the Cayman Islands and before the Judicial Committee of the Privy Council. He alleged that the defendants caused loss by making a late application to re-amend his claim against Investcorp and by failing to advise adequately about the risk of an anti-suit injunction after proposed proceedings in Dubai.

Limitation issues concerning the re-amendment claim were tried as preliminary issues. All defendants also applied for reverse summary judgment. The court had to determine when the claimant acquired the knowledge required by the applicable limitation provisions, whether any continuing duty existed, whether the lost claims had a real and substantial prospect of success, and whether the causation issue on the anti-suit claim against the first defendant could be decided summarily.

1. Limitation. The English and Caymanian provisions were treated as functionally identical. The claimant knew in December 2011 that the failed re-amendment application had deprived him of the opportunity to advance the new claims. That was knowledge of the material damage, even though he hoped the existing claims would succeed and did not know the eventual extent of his loss. The knowledge threshold is deliberately low and concerns the pleaded damage rather than its final quantification.
2. Legal advice was unnecessary to identify the disadvantage caused by refusal of the application. Knowledge that the conduct involved negligence was irrelevant. The claimant also knew that the loss was potentially attributable to the legal team. Claims against the second, third and fourth defendants concerning the late application were therefore time-barred.
3. Continuing duty. A continuing retainer did not impose a daily duty to revisit earlier work or advise about possible negligence. The alleged duty was not created by the complexity of the litigation, the claimant’s reliance on his lawyers, or the supposed obviousness of the error. A different result might follow from an express undertaking or a later instruction which necessarily required review of the earlier work, but no such facts were established.
4. Reverse summary judgment. The Sham IMA claims were hopeless. The SPA did not support the proposed condition-precedent argument; any relevant condition could have been waived; the parties’ conduct supported estoppel by convention; and the pleaded breach-of-trust and restitution claims could not succeed on the evidence and findings in the Investcorp litigation.
5. The Imprudent Allocation claims also had no real prospect of success. The proposed expert evidence was rejected as lacking independence and relevant expertise, and the trial findings showed that avoiding first-layer leverage would have caused greater loss. The claims had no substantial settlement value.
6. The claim against the second defendant concerning advice about an anti-suit injunction was hopeless because the email exchange showed that the risk had already been identified and the advice sought concerned a different issue. The equivalent claim against the first defendant was different. Whether later advice and conduct broke the chain of causation was fact-sensitive and unsuitable for summary determination. That claim was allowed to proceed to trial.