The former Chief Executive of the AA has been unsuccessful in the professional negligence claim he brought against the law firm he instructed to sue his previous employer.
Mackenzie v Rosenblatt Solicitors & Anor [2023] EWHC 331 (Ch)
Background
Robert Mackenzie was dismissed from the AA in 2017 for gross misconduct which left him vulnerable to losing bonuses paid in previous years and shares which were potentially very valuable.
Mr Mackenzie subsequently instructed Rosenblatt Solicitors (“Rosenblatt”) in a claim for damages for loss by an unlawful means conspiracy against the AA, its directors, and the company secretary in August 2017. The claim was issued in March 2018. However, Mr Mackenzie abandoned his claim in November 2018 following an application by AA to strike it out. As a result of this, Mr Mackenzie then became liable for the costs of AA and its directors and secretary.
Mr Mackenzie then commenced proceedings against Rosenblatt for damages for breach of retainer and negligence. Mr Mackenzie made allegations against Rosenblatt in respect of their alleged failure to advise him that his claim against AA had low prospects of success before he became exposed to substantial legal costs.
Court ruling
The Judge in the case found that Rosenblatt breached its duty to Mr Mackenzie for:
- Failing to advise him before the claim was issued that it appeared weak;
- Failing to advise before or after the claim was issued that it was at risk of a successful strike-out application; and
- For failing to inform Mr Mackenzie of Counsel’s advice that there was a significant risk the claim would be struck out.
Although the Judge found in favour of Mr Mackenzie in four of his 13 alleged breaches of duty, the claim against Rosenblatt ultimately failed on the basis that these breaches of duty did not cause Mr Mackenzie to suffer a loss. This was on the basis that Mr Mackenzie wanted to continue to pursue the claim even after being told in June 2018 that it was weak. The Judge was not confident that Mr Mackenzie would be deterred from continuing with the claim even if he received advice that it was at risk of being struck out.
What do I need to prove to bring a professional negligence claim?
In order to bring a successful professional negligence claim against a solicitor, a claimant must prove the following:
1. That the solicitor owed a duty of care – This is usually established when a solicitor is instructed to act on your behalf. A solicitor will owe their client general duties under common law. However, their terms of business will also set out what the solicitor agreed to do for you.
2. That the solicitor breached that duty of care – A solicitor will generally be found to have breached their duty if their actions fell below a certain standard of care.
3. That this breach caused you to suffer a financial loss – If you can prove that a duty of care exists and that it was breached, you will then need to prove that the solicitors’ actions directly caused you to suffer a financial loss. Often the starting point for establishing causation is the ‘but for’ test, which outlines that the professional will only be responsible for the loss of the claimant if their loss would not have occurred ‘but for’ the negligence of the professional.
Further, in some instances, it will be relatively easy to quantify a loss but in other circumstances, it will require some forensic work to establish just how much has been lost or how much should have been gained had the professional’s advice not been negligent. A person or business has a duty to mitigate their losses, meaning that they need to have taken reasonable action to reduce the loss caused by the negligence of the professional. A claimant cannot recover damages for losses that they could have avoided or are deemed to be unreasonable.
In the above case, Mr Mackenzie was unable to satisfy the Judge that Rosenblatt’s actions caused him to suffer a financial loss. This is because the Judge considered that even if Rosenblatt had not breached their duties, it would have made no difference to the course of events.
How can Nelsons help
Charlotte Dowdy is an Associate in our Dispute Resolution team, specialising in commercial litigation and professional negligence claims.
For advice on or further information in relation to the subjects discussed in this article, please contact Charlotte or another member of the team in Derby, Leicester or Nottingham on 0800 024 1976 or via our online form.
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