In a recent negligence case, the High Court has ordered that a barrister pay a 40% contribution to a law firm who had settled a claim with their former client.
The case raises a number of particularly interesting points in relation to the apportionment of blame between solicitors and barristers and the Civil Liability (Contribution) Act 1978.
Percy v Merriman White and David Mayall
Case background
The barrister in this case (Mr Mayall) was instructed by London-based solicitors, Merriman White, and their client, Mr Percy, to provide advice and representation in Court in respect of a commercial dispute regarding a joint venture which the client had engaged in with another person (Mr Trevor). Mr Percy claimed that Mr Trevor had misappropriated assets of the joint venture.
Following advice from Merriman White and Mr Mayall, the client brought a derivative claim (in the name of the joint venture) against Mr Trevor. However, the Judge refused to grant permission for the claim to be brought as it did not meet the relevant threshold test. Instead, the Judge recommended that the joint venture should be wound up and that there would be no permission to appeal the ruling as the claim had no prospect of being successful.
Prior to the ruling and during mediation (Mr Mayall did not attend the mediation session), the client was offered £500,000 by Mr Trevor to settle the derivative claim but the offer was rejected, so the claim proceeded to a permission hearing.
Following mediation and prior to the permission hearing, where the client was denied permission for the derivative claim to proceed, a conference with Mr Mayall, Merriman White and the client took place. Mr Mayall, who was informed as to events of the mediation session, and Merriman White advised the client to continue with the claim.
When the claim was refused at the permission hearing, the client settled with Mr Trevor on a substantially reduced basis. Mr Percy then brought a negligence claim against both the law firm and Mr Mayall.
However, prior to the resulting trial, Merriman White settled the claim with Mr Percy, who agreed to not pursue Mr Mayall on the basis that each side would pay their own costs.
The only claim which remained was that of Merriman White’s contribution claim against Mr Mayall in respect of the sum paid to the client.
Contribution claim
Merriman White sought a contribution from the barrister as they ruled that Mr Mayall – who denied that he had acted negligently – was liable for the “same damage”, as specified under the Civil Liability (Contribution) Act 1978:
“A person who has made or agreed to make any payment in bona fide settlement or compromise of any claim made against him in respect of any damage…shall be entitled to recover contribution…without regard to whether or not he himself is or ever was liable in respect of the damage, provided, however, that he would have been liable assuming that the factual basis of the claim against him could be established.”
The High Court ruled that Merriman White was entitled to a contribution from Mr Mayall with Chief Insolvency and Companies Court Judge Briggs, sitting as a deputy High Court Judge, finding that the law firm didn’t have to prove that Mr Mayall had acted negligently, only that there had been a “reasonable cause of action” against the law firm.
Judge Briggs commented:
“When determining entitlement, the party against whom a contribution is sought may seek to challenge whether the claimant had a reasonable cause of action against the defendant who compromised the claim.
“The extent of the inquiry is limited. The compromising party need only demonstrate that the assumed factual basis disclosed a reasonable cause of action. It is not legitimate to have regard to whether in fact the defendant was liable and consider ‘collateral defences.”
As a result, both the law firm and barrister were liable for the “same damage”, and that it is “just and equitable to apportion the contribution according to responsibility”.
Judge Briggs found that responsibility for the loss and damage suffered by the client fell more upon Merriman White, so ordered that Mr Mayall pay 40% of the settlement amount paid out to the client.
How can Nelsons help?
Daniel Brumpton is a Partner in our Professional Negligence team, specialising in claims against solicitors and barristers.
Our expert team are experienced in every type of professional negligence claim. If you feel that you may have a claim for professional negligence then we can evaluate your case and assess your chances of success and the timescales and costs involved.
For more information, please contact Dan or another member of the team in Derby, Leicester or Nottingham on 0800 024 1976 or via our online form.