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Judgments - Moy v Pettmann Smith (a firm) (Original Respondents and Cross-appellants) and another (Original Appellant and Cross-respondent)

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    32.  The solicitors had meanwhile commenced proceedings on Mr Moy's behalf in July 1994, claiming damages for negligence against the hospital authority. The authority initially denied liability, but in March 1995 it admitted liability and submitted to interlocutory judgment in favour of the claimant. It did, however, maintain the plea made in its defence served on 18 August 1994 that the defendant's negligence did not cause or contribute to any injury, loss or damage sustained by the claimant and that such continuing disability as he might have was the natural consequence of the fractures which he had sustained.

    33.  The claimant did not make as good a recovery as had been hoped, and by late 1996 he was having increasing pain and difficulty. Another surgeon Mr King was instructed in January 1997 on the appellant's advice to deal with this, but he was not prepared to attribute the claimant's increasing pain and difficulty to the negligent surgery. Notwithstanding this adverse opinion, the solicitors consented to an order made on 13 February 1997, whereby they were to furnish a schedule of special damages within 28 days and the parties were to be limited to one medical expert per side and were to exchange medical reports within three months. In April 1997 the time for serving the schedule was extended by consent to 8 May and for exchange of medical reports to 8 July 1997. No medical report was served by 8 July, but the solicitors had explained their difficulties over medical advice to the district judge and expected to be able to obtain an extension of time.

    34.  On 18 July 1997 (the last date permitted by an "unless" order made on 20 June 1997) the solicitors served a schedule of damages, in which substantial future loss was claimed, amounting to £169,408 at 16 years' purchase of a continuing loss of £10,588 per annum. There was also a claim for £25,000 for handicap in the labour market. The grand total of the past and future loss specified in this document amounted to £276,457.27, but no medical opinion had yet been obtained to support the claimant's continuing disability and the schedule was based on the claimant's own evidence about his difficulties at work. The defendant authority served a counter-schedule on 19 December 1997, in which the question of causation of the loss was squarely raised, the thesis being that irrespective of the surgeon's negligence the claimant would have incurred much of the loss and damage claimed. The total accepted in this schedule was £55,067.72.

    35.  In July 1997 the appellant advised the solicitors to obtain Professor Saleh's opinion on the causation of his pain and disability and on the prognosis and asked them to arrange a conference with him. The solicitors wrote several letters to Professor Saleh, but regrettably he failed to reply and equally regrettably the solicitors failed to pursue the matter with him.

    36.  A pre-trial review was held by a district judge on 27 November 1997, at which it was ordered that each party should have leave to rely upon the evidence of "a medical expert", whose report was to be disclosed by 9 January 1998, and "in default no evidence not so disclosed shall be admissible save with leave of the court". It was then expected that the date of trial would be in February 1998.

    37.  Although they had not obtained the further medical evidence which was vital for supporting the future loss claim, the solicitors did not seek an extension of time, but continued to write to Professor Saleh, while they also made unsuccessful attempts to contact him by telephone. On 8 January 1998 Professor Saleh at last replied to the solicitors, stating that he would have to examine the claimant again before he could give an opinion on his medical situation. An appointment was made for 22 January 1998.

    38.  On 9 January 1998 the solicitors issued a notice of application for leave to adduce further medical and other evidence before trial. Professor Saleh duly examined the claimant on 22 January 1998, and his report, although bearing that date, was sent to the solicitors under cover of a letter dated 12 February, which apparently was received on or about 20 February 1998. In his report Professor Saleh set out his opinion and prognosis:

    "Mr Moy sustained a fracture of the lower left tibia which required corrective osteotomy. He is working full time in a demanding physical occupation and remains physically limited as a result of the problems with his left lower leg and ankle. There is some evidence of instability of the ankle and degenerative change within the foot.

    If Mr Moy continues in the building trade in his present work I believe that he will continue to be symptomatic on a daily basis. It is possible that a further corrective osteotomy to redress the residual deformity might improve things marginally. However I believe that he has residual problems at the level of the ankle and foot which will always limit his overall function.

    Overall therefore I do not believe surgery is indicated and believe that, were he to change to a lighter job, for example a Quantity Surveyor, it seems likely that he would continue to work up to retirement age.

    It was interesting to note that, on a recent holiday, he was asymptomatic.

    If, however, Mr Moy continues to work in his present occupation I believe that, in the short-term, he will cope as he does currently. In the medium term he will take further time off work and, in the long-term, I believe he will have difficulty managing. I believe that suitable retraining would be the most appropriate route for Mr Moy to take in order to preserve his current health status."

In his covering letter Professor Saleh said roundly "If he decides to carry on in his current capacity I believe that his symptoms will get worse."

    39.  The appellant appreciated that the value of the case would have to be revised in the light of this report and advised that in addition to the application for leave to adduce further evidence an application should be made to adjourn the trial, which was now listed for 6 April 1998.

    40.  On 24 February 1998 the health authority made a payment of £120,000 into court.

    41.  The applications, which were vigorously opposed by the health authority, were heard on 26 February 1998 by Deputy District Judge Stary. She dismissed both applications and confirmed that the trial date was to stand at 6 April 1998. The Deputy District Judge was very critical, not to say censorious, concerning the preparation of the case and the obtaining of medical evidence. As the trial Judge, His Honour Judge Geddes, subsequently pointed out, however:

    "The Deputy District Judge appears to have misunderstood the facts in a number of important respects. In particular she seems to have thought Mr Moy's problems were apparent in July 1996 and that 'this was not picked up as a point of serious implication until 18 months later'. She further found that 'there really is not any serious change in the Plaintiff's medical condition [since Professor Saleh's report of July 1996]'."

The thrust of the Deputy District Judge's decision was that the delay was the fault of the claimant and his solicitors and that leave should therefore not be given for the further evidence to be adduced, nor should the trial date be vacated. The last portion of the note of her reasons reads as follows:

    "It would seem that the plaintiff's solicitors are looking for a reason to use the Plaintiff's days off work as a lever to show a change in the Plaintiff's medical condition with a view to starting all over again the medical evidence which had been restricted by District Judge Wigfield. I am very concerned about this.

    I am not satisfied that there has been so significant a change from last year to now or over the last six months as to justify the Plaintiff saying to me that they want to abandon the trial date in April and start all over again. I am not going to accede to the Plaintiff's application."

The appellant pointed out, perhaps with more force than diplomacy, that the ruling meant that she would have to call Professor Saleh to give evidence but instruct him not to give evidence about the claimant's condition and prognosis, but the judge was unmoved and made the order dismissing the applications to adduce further medical evidence and vacate the trial date.

    42.  It must no doubt be frustrating for district judges who have charge of case management of actions before trial to be faced constantly with delays which result from inefficiency, incompetence or downright neglect on the part of the practitioners whose duty it is to prepare them. One is left with the very clear impression, however, that Deputy District Judge Stary either was over-influenced by the defects on the part of the solicitors in preparing the case and by the imperative of efficiency in managing a stream of actions for trial, or else she failed to appreciate how considerable an effect on the value of the claim the new medical evidence would have. She did not at any stage go into the question of the degree of prejudice which would be sustained by the health authority, which could readily be met by an order for costs. She either failed to carry out any balancing exercise or misunderstood the profound effect of the medical evidence which the claimant wished to adduce. Whatever the reason, the result of her decision was a drastic reduction in the amount which the claimant was likely to recover at trial, which the claimant and his advisers may justifiably have regarded as a serious injustice.

    43.  An appeal was brought to the Central London County Court, but on 6 March 1998 the appeal was dismissed by His Honour Judge Previte QC. No note is available of his reasons, but Judge Geddes recorded that the appellant said that the decision "was largely based not on the merits but on a particular recent authority". The authority was not named, but it appears from the judgment of the Court of Appeal in the present case that it may have been Lownes v Babcock Power Ltd [1998] PIQR 253, decided on 11 February 1998. In that case the Court of Appeal upheld decisions refusing an extension of time to deliver a schedule of damages, which had very considerable adverse consequences for the plaintiff. It should be borne in mind, however, that the delay in that case and the gross nature of the solicitors' dereliction of duty substantially exceeded those in the present case. The letter of 10 March 1998 from the solicitors to the claimant sets out in rather more detail the criticisms which the judge made both of Professor Saleh and the solicitors. It does not appear from any source to what extent, if at all, the judge took account of the degree of injustice which would be suffered by the claimant if the further evidence from Professor Saleh were not adduced or of the extent of any prejudice which might be caused to the health authority.

    44.  On 12 March 1998 the health authority increased its payment into court to £150,000. By a letter of the same date its solicitors stated that provided the offer was accepted by 4 pm on 19 March it would waive its right to enforce the order for costs made at the appeal on 6 March, leaving each party to bear its own costs of that appeal.

    45.  The appellant advised the claimant in conference on 23 March 1998. She explained the difficulties of obtaining leave to have Professor Saleh's third report admitted in evidence. She advised that the figure propounded on behalf of the claimant for the value of the claim was about £300,000, while the "floor" of the claim was £200,000 net. It was her advice that the payment into court of £150,000 should not be accepted, advice which the claimant accepted. The solicitors offered by letter of 26 March to accept £200,000 net of deductions, but the offer was rejected.

    46.  On 1 April 1998 the solicitors for the health authority wrote saying that Professor Saleh's earlier reports were agreed and that they would object to his being called to give oral evidence. The appellant directed, however, that Professor Saleh be asked to attend court so that he would be available to give evidence.

    47.  On 3 April 1998 the appellant received the defendant's skeleton argument, which now made it quite clear (paragraphs 4.3 and 14.1) that the question of causation of the claimant's residual pain and disability and his claim for consequential future loss were in issue. As Judge Geddes stated at paragraph 57 of his judgment, the appellant had been lulled by the counter-schedule of damages into a false belief that causation was no longer a significant issue in relation to the claimant's residual pain (cf paragraph 28 of Latham LJ's judgment in the Court of Appeal). It was therefore going to be necessary to obtain leave to adduce evidence to close this gap, as well as to establish the existence of the claimant's continuing pain and disability.

    48.  At the door of the court on 6 April 1998 the appellant was told by counsel for the health authority that the offer of £150,000 was still open for acceptance before the judge came into court, the authority being willing to waive payment of the costs of the hearings of 26 February and 6 March. The appellant discussed the matter further with the claimant and advised him that he would be better to proceed with the action. She was conscious that she still faced the hurdle of obtaining the judge's leave to adduce the medical evidence contained in Professor Saleh's third report, but took the view, based on her professional experience, that there was a better than 50:50 chance of succeeding in doing so. She reckoned that if she was not successful in the application and the claimant was awarded a sum which did not reflect the claim for continuing disability and future loss, he would have the security of a cause of action against the solicitors for negligence in preparation of the case. He would also have that prospect open to him if he took the offer of £150,000, but she was of opinion that to rely on it contained difficulties and risks and was bound to involve long delays and much stress and worry for the claimant and his wife, so that it should be a course of last resort. It is not necessary for present purposes to explore the problems which would have been inherent in resorting to a negligence claim against the solicitors, but one obvious risk was that the solicitors would then have pleaded that the claimant should not have agreed to take the offer, but should have proceeded with the action, an issue whose resolution could have been a rather uncertain matter. The appellant accordingly concluded that it was in the claimant's best interests to press on with the application. She advised him that in her judgment he should beat the payment into court, though she told him that he could take the offer and avoid the risks if he so decided. The claimant decided to proceed and the parties went into court.

    49.  What appears clearly from the evidence given by the appellant in the present action is that although she bore in mind the possibility of his accepting the offer and claiming the balance of the value of the claim from the solicitors in a negligence action, she did not discuss this possibility with the claimant. She stated in evidence that the time to advise the client of this was if the action went wrong, ie if he was prevented from recovering the true value of his claim. This was the point on which the decision of the Court of Appeal turned.

    50.  When the preliminary discussion took place in court it became apparent after some little time that the appellant was unlikely to succeed in her application to adduce the further evidence of Professor Saleh. The judge rose for a time to read the papers, during which time discussion took place between counsel. The health authority was no longer willing to pay the sum previously offered of £150,000, but would only go to £120,000, less the costs incurred from the date of payment into court of that sum of £120,000. The shortfall involved in accepting this payment was considerable, subsequently estimated at £69,000, being the difference between the sum of £150,000 and the net sum eventually received by the claimant from the health authority. The immediate difficulty facing him and his counsel was that if he went ahead on the limited evidence which the court was willing to receive, the measure of damages would probably have been below £100,000, so leaving the claimant with an even lower net sum after payment of the heavy trial costs which would fall on him. The appellant accordingly advised the claimant that he would have to take the best terms available and that he should accept the reduced offer. The claimant did so and the case against the health authority was settled on these terms.

    51.  The claimant commenced the present proceedings on 19 April 1999, and the action came on for trial before His Honour Judge Geddes, sitting as a High Court judge, who gave a written judgment on 4 July 2001. After reviewing the evidence in detail he held at paragraph 61 that the solicitors had been guilty of negligence in the conduct of the claim. This finding has not been the subject of challenge on appeal. He then considered the position of the appellant in paragraphs 63 to 65 of his judgment:

    "63.  It was further argued that Ms Perry was negligent in not advising Mr Moy to accept the Health Authority's offer before trial of £150,000 and that had it not been for that negligence Mr Moy's losses would have been considerably less.

    64.  In deciding that issue I have to try and put myself into the position of Ms Perry at the time, and decide whether her advice fell outside the range of possible advice which reasonably competent counsel of her seniority and purported expertise could be expected to make. In my judgment it did not. Although others might have taken a different view of the likelihood of the success of her application, I do not think that it was wholly unrealistic for her to believe that the judge might have some sympathy for the plight in which Mr Moy had been placed by the failure of his legal advisers, and give leave for further evidence to be served (including that of causation) while adjourning the trial for this to be done. In reaching that conclusion I do not overlook the fact that there had been two previous unsuccessful applications to adduce further evidence and to adjourn the trial for that purpose. However it seems to me that the court on those occasions had not properly adjudicated on the merits and that there was therefore some ground for believing that the trial judge might come to a different conclusion. I accept Ms Perry's evidence that she had known courts to take an indulgent view in such circumstances, at least before the reforms to the Civil Procedure Rules. No prejudice to the Health Authority would apparently have been caused by such an adjournment apart from costs, and they would no doubt have been ordered to be paid by the Claimant or his solicitors.

    65.  The advantages of success would have been considerable. Although Ms Perry could only take an educated guess at the value of the claim in the absence of the necessary evidence, there was no dispute that that value would almost certainly have exceeded £200,000 and that therefore settlement at the sum suggested would have resulted in a considerable loss to Mr Moy. The alternative was for Mr Moy to accept the sum on offer and then to sue his solicitors for the shortfall. Ms Perry considered that such a course should in the interests of her client be avoided if at all possible. On the other hand Ms Perry was aware that failure would not necessarily be fatal as Mr Moy would still be able to sue his legal advisers, albeit in those circumstances for a greater sum, as he has done by bringing this action.

Support for the view that Ms Perry appeared to those present at the time to have a reasonable chance of success in her application is provided by the fact that the Health Authority were prepared to continue with their offer of £150,000 (which exceeded the value of the Claimant's claim as it stood without the missing evidence) but reduced this to £120,000 when it was clear that the application was going to be unsuccessful."

    52.  The solicitors appealed to the Court of Appeal against that part of the judge's order by which he dismissed the claimant's claim against Miss Perry and the Part 20 claim against her. By a respondent's notice reliance was placed upon section 1(5) of the Civil Liability (Contribution) Act 1978 as barring the claim against Miss Perry.

    53.  The Court of Appeal (Brooke and Latham LJJ and Hart J) allowed the solicitors' appeal and held the appellant to have been negligent and liable for a proportion of the agreed damages payable to the claimant. The leading judgment was given by Latham LJ, who dismissed the argument based on the 1978 Act briefly, on grounds to which I shall return.

    54.  He examined the facts of the case in some detail and approved the test applied by the judge, whether or not the appellant's assessment fell outside the range which reasonably competent counsel of her seniority and purported experience could be expected to have made. He concluded, after considering previous cases on extensions of time, that although the appellant's assessment of the chances of having Professor Saleh's further evidence "could be charitably described as sanguine", it was difficult for the Court of Appeal to say that the judge was wrong in holding that the assessment was not negligent.

    55.  Having so held, however, Latham LJ went on to hold that the appellant had been negligent in failing to give the claimant more detailed advice, related in particular to the prospects of getting in the essential further evidence. He said in paragraph 43 of his judgment that when the offer of £150,000 was made, the claimant

    "was entitled to a proper assessment of the prospects of obtaining more were the trial to proceed. The only proper advice that [the appellant] could have given in the light of her own assessment of the chances of persuading the court to give leave to adduce further evidence was that the chances were 50/50. He was not given that advice."

On this ground he held that the appellant had been in breach of her duty to the claimant, and followed up this conclusion by inferring that if he had been advised that the chances of getting in the evidence were 50/50 he would have decided to take the offer of £150,000.

    56.  Brooke LJ agreed with the reasons and conclusion of Latham LJ and added a discussion of several decided cases on failure to observe the rules in the CPR and to comply with "unless" orders. He specifically agreed at paragraph 65 with Latham LJ that it would be wrong to interfere with the judge's finding as to the quality of the appellant's assessment of the likelihood of being allowed to adduce the evidence at the trial. He nevertheless went on to say at paragraph 67, in a passage which is difficult to reconcile with his conclusion on liability:

    "It would be a disaster to the conduct of litigation in this country if an effect of the decision of the House of Lords in Hall v Simons is that advocates believe that they have to hedge their opinions about with 'ifs' and 'buts' in order to avoid an adverse finding of professional negligence. They are being paid to express their opinion, and if they assess their clients' prospects at 25 per cent, or 50-50, or 'strong', then that advice will usually suffice unless they are expressly invited to explain it. However, if they have fallen below the standard of care reasonably to be expected of them when formulating their opinion, whether their negligence relates to questions of fact or questions of law (including procedural law), they will now be as vulnerable to a finding of professional negligence as any other professional man or woman."

    57.  Hart J concurred in the result, but on the basis that he considered that the advice not to accept the offer of £150,000 was wrong and negligent.

    58.  Sir Sydney Kentridge QC for the appellant argued that the approach of the Court of Appeal was incorrect. If the appellant's assessment of the risk was not negligent, he submitted that it is difficult to understand how the advice based on it could be negligent. Both Latham LJ (paragraph 42) and Brooke LJ (paragraph 67) recognised that a client is entitled to have advice clearly stated rather than a dissertation on the respective advantages and disadvantages of different decisions. Latham LJ had also concluded in paragraph 42 that it was

    "preferable, if at all possible, to obtain full compensation from the Health Authority rather than to accept a lesser sum, on the basis that an action for negligence against [the solicitors] might make up the shortfall."

These factors logically led to the conclusion that since the appellant had correctly formed her assessment of the chances and given the claimant advice, based on that assessment, how to proceed, it could not be said that she was negligent in giving that advice. Moreover, Sir Sydney challenged the inference drawn by the Court of Appeal that the claimant would have decided to accept the £150,000 if more fully advised of the problems involved in getting the evidence in and the prospects of doing so. He drew attention to the statement at paragraph 42 of the skeleton argument in the Court of Appeal of counsel for the solicitors that "there is no dispute that the Claimant would have taken any advice given to him as to accepting the payment into Court."

    59.  In my opinion there is considerable force in the arguments advanced on behalf of the appellant. Your Lordships have held in Arthur JS Hall & Co v Simons [2002] 1 AC 615 that the public interest does not require advocates to be held immune from suit for the consequences of their negligence. But that interest does require that the application of the principle should not stifle advocates' independence of mind and action in the manner in which they conduct litigation and advise their clients. That also accords with common justice in a case such as the present. Latham LJ cited an apt passage from the speech of Lord Salmon in Saif Ali v Sydney Mitchell & Co [1980] AC 198 at 231:

    "Lawyers are often faced with finely balanced problems. Diametrically opposed views may [be] and not infrequently are taken by barristers and indeed by judges, each of whom has exercised reasonable, and sometimes far more than reasonable, care and competence. The fact that one of them turns out to be wrong certainly does not mean that he had been negligent."

The same thought has been expressed in the Ontario High Court by Anderson J in Karpenko v Paroian, Courey, Cohen & Houston (1981) 117 DLR (3d) 383 at 397-8 in a passage which mutatis mutandis is material to the present issues:

    "What is relevant and material to the public interest is that an industrious and competent practitioner should not be unduly inhibited in making a decision to settle a case by the apprehension that some Judge, viewing the matter subsequently, with all the acuity of vision given by hindsight, and from the calm security of the Bench, may tell him that he should have done otherwise. To the decision to settle a lawyer brings all his talents and experience both recollected and existing somewhere below the level of the conscious mind, all his knowledge of the law and its processes. Not least he brings to it his hard-earned knowledge that the trial of a law-suit is costly, time-consuming and taxing for everyone involved and attended by a host of contingencies, foreseen and unforeseen. Upon all of this he must decide whether he should take what is available by way of settlement, or press on. I can think of few areas where the difficult question of what constitutes negligence, which gives rise to liability, and what at worst constitutes an error of judgment, which does not, is harder to answer. In my view it would be only in the case of some egregious error … that negligence would be found."

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