Solicitors PI: ‘door of court' settlement advice unlikely to be found negligent 8 Feb 2010

Solicitor holding filesIn a recent decision, the courts have confirmed that they will not readily consider lawyers' settlement advice to have been negligent when such advice is given immediately before (or even during) trial.

In Fraser v Bolt Burden & Others, the claimant had retained both a solicitor and a barrister to pursue a claim against a third party. On the first day of trial, the third party made an offer to settle which was for a lot less than the amount claimed. Nonetheless, the barrister advised the claimant that she should make a counter offer only slightly higher than the third party’s offer. This was on the basis that the claimant's evidence was, in places, inconsistent and so there was a danger that the claimant's claim would not succeed at all. The claimant's solicitor agreed with the barrister's advice. The third party accepted the counter offer.

Due to the time constraints and pressures inherent in the trial environment, all of this happened within a few hours; in contrast, the case had taken six years to reach trial.

The claimant subsequently claimed against both the solicitor and the barrister, arguing that the advice to settle had been hurried, ill thought out and wrong. On one analysis, it was easy to see that the claimant could have held out for a much higher settlement or award.

However, the court was not prepared to find in the claimant's favour. It said that, as a matter of public policy, lawyers should encourage settlement and this applies as much when a case reaches trial as when the case is first intimated. Given the environment within which it is given, legal advice 'at the door of the court' "need not be right but should be careful".

This is an interesting development and will give a degree of comfort to those practising in this area (and their PI insurers). The key message is to ensure that advice is balanced and reasoned; whilst courts will not expect lawyers to undertake a full forensic analysis of a settlement position within the time pressures of trial, any defence based solely on those time pressures as a justification for 'getting it wrong' is still likely to fall on deaf ears.

As an aside, the court in Fraser went on to affirm the law surrounding solicitors' ability to rely on advice received from barristers. The 'usual' position is that solicitors must not blindly accept a barrister's advice; some independent assessment of that advice must be made. However, where the barrister has extensive experience in the particular field, the solicitor's duty to assess will be relaxed. Interestingly, the court in Fraser seemed to suggest that, in assessing the merits of settlement immediately before or during trial, barristers may well be in a better position to advise than solicitors; they are arguably more experienced in assessing how a party's evidence will be (or has been) received by the court. The suggestion, therefore, was that, even if liability in Fraser had been established against the barrister, the solicitor would have escaped a finding.

Whilst this general proposition may not readily be accepted by barristers (and it is certainly easy to pick holes in the logic - aren't all settlement opportunities assessed against the strength of the evidence and the court's likely approach?), it will give a further boost to solicitors and, when allied to the remaining arguments in Fraser, ought to serve to discourage claims from disaffected claimants wishing to have a speculative second bite at the cherry.

This article first appeared in Law-Now, CMS Cameron McKenna's free online information service, and has been reproduced with their permission. For more information about Law-Now, please go to www.law-now.com