Leonard & Anor v Byrt & Ors

The appellants appeal against an order made by Mr Justice Griffith Williams in the High Court, Queen’s Bench Division, on 14 February 2007, whereby he gave summary judgment against them in favour of all the respondents on the basis, pursuant to Rule 24.2 of the Civil Procedure Rules 1998 (“the Rules of 1998”) that they had no real prospect of succeeding on their claim against them.

The present proceedings can be described as secondary litigation arising out of the failure of primary litigation brought by the appellants. All the respondents are or were professional persons who acted for and/or advised the appellants in the primary litigation. Following its failure the appellants sued them for negligence and/or breach of their contractual obligation to bring due care and attention to their work on their behalf. Thus Mr Byrt, the first respondent, is a solicitor who acted for them in the primary litigation. The second respondent is a firm of which at one time he was a partner and which, at most relevant stages of the history, was on record as acting for them, subject to his having conduct of their case within the firm. In the present proceedings it is convenient to take the first and second respondents compendiously and to personalise them as “Mr Byrt”. The third respondents are executors of the estate of Dr Baker, who was a professional metallurgist with particular experience in the investigation of marine casualties. He provided an expert report for the appellants for use in the primary litigation and gave advice to them at other stages of it. The fourth respondent, Mr Stafford, is a practising barrister who advised the appellants at some stages of the primary litigation.

The primary litigation arose out of an ill-fated plan on the part of the appellants to emigrate from England; to sell their assets and invest the proceeds in the construction of a 16 metre motor sailing yacht; to sail around the world in it; then to settle in the Algarve; and to generate an income by chartering the yacht. In 1988 the appellants contracted with boat builders for the building of the yacht to specifications made by a professional boat designer. They also contracted with a firm of marine surveyors to oversee the yacht’s construction. It was agreed with the boat builders and the marine surveyors that, although the original design of the yacht provided for the hull to be made of steel, it should instead be made of aluminium. It is unclear whether the designer was party to that alteration.

During the summer 1988 the yacht was constructed; and thereafter, for two years, it was fitted out by other contractors in Poole harbour. In December 1990 it was ready to make its maiden voyage. With a master and a mate, the appellants set off in the yacht for the Canary Islands. Unfortunately, however, the yacht failed within eight days of embarkation. Off the coast of Portugal its steering failed and it had to be towed to Lisbon harbour, where it has remained for the last 17 years. It transpired that the skeg which protected the rudder had fractured and collapsed, whereupon the rudder had fractured and fallen away. This event has clearly been one of life’s great tragedies for the appellants; and at first sight one would have expected them to be able to obtain substantial damages against one or more of the professionals who had been responsible for the construction of the yacht.

There were seven defendants in the primary litigation. The first four defendants can compendiously be described as the boat builders. The fifth and sixth defendants can compendiously be described as the marine surveyors. The seventh defendant was the yacht’s designer. It seems that the aspiration of the appellants was primarily to establish liability against the surveyors. Both the builders and the designer were apparently of limited means; indeed the latter seems to have been resident abroad. The surveyors, on the other hand, remained in practice in England and indeed were, at least until a late stage in the proceedings, fully insured against liabilities of the sort alleged against them by the appellants. It may well also be that the claim against them was stronger than the claim against the builders and the designer.

There was an extraordinary delay on the part of the appellants, who for the first six months resided on the boat in Lisbon harbour and since then have been resident in the Algarve, in launching the primary proceedings. They were issued over three years after the yacht’s failure, namely in May 1994. The proceedings met their quietus on 13 November 2002, when in the Central London County Court HH Judge Knight QC struck the proceedings out pursuant to Rule 3.4(2)(b) and (c) of the Rules of 1998, namely in effect because of gross delay in the prosecution of the claim. Technically the claim was not struck out as against the designer, who had taken no part in the proceedings; but for practical purposes the proceedings were at an end.

Was Griffith Williams J. right to conclude that the appellants had no real prospect of succeeding on their claim against any of the three respondents? Subject, on behalf of Dr Baker, to an allegation that, as an expert witness, he enjoyed immunity from suit in respect of evidence given to the court (being an assertion which in my view it is unnecessary for us to consider), each of the three respondents accepts that he owed a duty of care to the appellants in and about his work done on their behalf in the primary litigation. Each, however, denies breach of duty. Indeed if, which is denied, each was guilty of breach of duty, each denies that the breach caused loss to the appellants. Without, so they all make clear, wishing to downplay their denial of a breach of duty, each puts forward his primary case on the latter basis, namely the alleged lack of causation between any breach and loss. Each contends that, for the purposes of their applications for summary judgment, the alleged lack of causation is the clearest basis upon which the judge was right to conclude that the appellants had no real prospect of success. Their argument as to causation has two strands, which I will identify in [43] and [44] below. But each respondent also marshals arguments in denial of breach, which are suggested also to have a character sufficiently compelling to justify a conclusion that no real prospect of success existed even in that regard.

Following the striking out of the primary proceedings in November 2002 and the failure of the appellants in May 2003 to secure permission to appeal against it, there was a further, unexplained delay before the launch of the secondary proceedings. They were issued on 10 November 2005, at a time when the appellants were represented by solicitors with, I believe, the benefit of public funding. When thus issued, Mr Stafford was not a defendant; he was added as a defendant by amendment made in March 2006. Amended particulars of claim against all three defendants were drawn, filed and served at a time when the appellants continued to be legally represented; and counsel drafted them on their behalf. In September 2006, however, the public funding certificates of the appellants in respect of the present proceedings were discharged; and thus, at the hearing before Griffith Williams J. in February 2007, they appeared in person. Counsel, including Mr Rainey Q.C. on behalf of Dr Baker and Miss Mulcahy on behalf of Mr Stafford, appeared for each of the three respondents. Upon this appeal the appellants filed their Appellant’s Notice in person; but, presumably in the light of the grant by Rix LJ on paper of permission to appeal, the Bar Pro Bono Unit accepted an approach by the appellants to cause them to be represented; and, shortly before the hearing before us, Mr Shapiro of counsel began work for them on behalf of the unit. Two clear days prior to the hearing in this court Mr Shapiro served and filed a revised skeleton argument on behalf of the appellants, which runs to 136 paragraphs across 42 pages. Notwithstanding that I will be proposing that this appeal should be dismissed, I take this early opportunity to praise the quality of the work done by Mr Shapiro on behalf of the appellants; to applaud the clarity and thoroughness of his skeleton argument; to express admiration for his courageous advocacy in this court in difficult circumstances; and to predict that we will see much more of him in this court in the years ahead, albeit – I trust – on a properly remunerated basis. I should record, however, that, in the course of his study of the case, various possible allegations against the three respondents occurred to Mr Shapiro beyond those which had been articulated in the amended particulars of claim. Although it might be helpful for me briefly to refer to those extra allegations, the facts are that the original allegations were, as I have said, crafted with the benefit of legal advice; that, apart from anything else, there would be grave problems in terms of limitation in any attempted reamendment so as to include Mr Shapiro’s allegations; and that this court would not in any event, save in the most exceptional circumstances which do not obtain here, reverse a decision to grant summary judgment to the respondents by reference to new allegations raised against them only two clear days prior to the hearing in this court.

In this case much turns on an unusual feature of a claim of professional negligence in the conduct of litigation. The unusual feature is the nature of the central argument of the appellants, namely that, but for the negligence of each of the three respondents, they would have secured a continuation of public funding which would have enabled them to prosecute the primary litigation to a successful conclusion. No doubt many litigants with, as we will assume, a good case would be prepared to continue to prosecute it in person even if, being unable to fund legal representation out of their own resources, they were to lose the benefit of public funding in order to do so. In the present case, however, the appellants do not adopt that stance. They do not contend that, in the absence of public funding, the primary litigation would continue to have been prosecuted. Whether their stance in that regard is attributable to a perception that it would have been impracticable for them in person to conduct complex litigation against an array of lawyers or whether they have had in mind the greater exposure to orders for costs suffered by parties who lack the benefit of public funding is irrelevant. The complaint therefore is that, but for the negligence of each respondent, the Legal Services Commission (or, prior to April 2000, the Legal Aid Board) would have granted them public funding with which successfully to pursue the primary litigation and, importantly, would have granted it at a stage sufficiently early to avoid a judicial conclusion, such as that made by Judge Knight in November 2002, that the delay had become so severe as to impel that the claim be struck out. In this regard I must address an argument that Mr Shapiro learnt that he could mount only hours prior to the start of the hearing in this court. For it was only at that stage, as a result of his own enquiries of a third party, that he obtained sight of a public funding certificate which, according to him, indicates that in September 2002 public funding was granted to the appellants which, absent the striking out, would have enabled them to carry the primary litigation to trial. A copy of this certificate has at all material times been in the possession of the respondents but was not put in evidence before the judge in the court below because they did not understand it to carry the significance which Mr Shapiro invests in it. I will consider at [33] below whether the certificate can indeed properly be considered to carry the significance suggested by him. At all events his argument is that it shows that public funding for the prosecution of the primary litigation to conclusion was in principle available; that, although, when granted in September 2002, it came too late in the light of the exposure of the claim to strike-out as a result of the delay which had already then accrued, it would, if secured at an earlier stage, have enabled the litigation to proceed successfully; and that, but for the negligence of each respondent, it would have been secured at that earlier stage.

Before I set out the history, it will be helpful to identify in broad terms the negligence alleged against each of the respondents. In this regard it is important to understand the size of the claim made in the primary litigation and, by contrast, the size of the claim which the appellants had hoped to make in it. When issued in 1994, at a time when a solicitor, albeit not Mr Byrt, was representing them, the primary claim was for the costs of repairs to the yacht, specifically for the cost of replacement of the lost skeg and rudder and for damages for the yacht’s loss of use. There came a time, however, when the appellants formed the view that the yacht was a constructive total loss and that the claim should be for its entire value, to which I will refer as its “wider basis”. Such a view was based upon their contention that the entire hull had been improperly welded together and that from the outset the yacht had been “doomed to fail”. The appellants alleged, or at any rate now allege, that within weeks of the failure of the yacht a Portuguese marine surveyor had told them that the problems transcended the failure of the skeg and rudder and that the hull, in particular the keel, was generally weak as a result of poor welding. Curiously, however, it is unclear whether his written report, which is not in evidence, contains any such assertion of wholesale deficiency. There is no doubt that a major problem in the prosecution of the primary litigation at a later stage, say between 1997 and 2000, was that Dr Baker proved unable definitively to associate himself with the more fundamental complaints of the appellants about the construction of the yacht; and that Mr Byrt and Mr Stafford, required to advise by reference to the evidence filed, in particular that of Dr Baker, also felt constrained to consider that the action could not proceed on the wider basis. Such is the context of the basic allegations of negligence against each respondent as follows:

against Dr Baker. This relates to advice which he gave in November 1999 to the effect that, apart from the patent deficiencies referable to the skeg and rudder, the remainder of the hull was sound. The appellants complain that such advice was negligently given; that it was inconsistent with his earlier, substantive report made in July 1998, which had left the door to a claim on the wider basis much more open; and that inevitably it inhibited their lawyers, in particular Mr Byrt, from taking action at that time to obtain public funding for professional examination with a view to the articulation of a claim on the wider basis in an amended pleading at a time before the delay made the claim liable to be struck out.

against Mr Byrt. This relates in particular to his dealings with the Legal Services Commission (“the LSC”) in July 2000. At that time the Commission refused to fund the appellants’ claim beyond an imminent attempt at mediation with the active defendants, namely the marine surveyors. By that time, as I will explain, the appellants had on their own initiative secured a separate, expert report on the condition of the hull by Mr McAllister, who had confirmed their allegations of its fundamentally negligent construction. The allegation against Mr Byrt is in particular that in July 2000 his attempts to secure public funding for the prosecution of the litigation to trial on the wider basis were so desultory that funding which could have been secured by the exercise of reasonable care on his part in the presentation of their case to the Commission was not secured.

against Mr Stafford. This is to the effect that, when asked in July 2000 shortly to advise about an offer to settle with the appellants, which had been made in the sum of £80,000 plus costs by the defendant surveyors at the attempted mediation a few days earlier, he negligently advised them to accept it and negligently suggested that any attempt to introduce the report of Mr McAllister as evidence was almost bound to fail. The argument is that, but for that negligent advice in relation to the linked issues of the merits of the proposed settlement and of the deployability in evidence of Mr McAllister’s report, further public funding for their claim would have been available to the appellants. I should add that one of the allegations of negligence introduced by Mr Shapiro at the last minute was to add to that complaint against Mr Stafford a complaint in relation to his substantive written Advice dated 10 December 1999. Such is now said to contain a negligent misunderstanding of the facts on the part of Mr Stafford, in the absence of which he would have written his Advice differently and, again, with the consequence that public funding to proceed on the wider basis would be likely to have been secured shortly thereafter.

The claim in the primary litigation, issued in May 1994, was not promptly served. The further delay may have related to the appellants’ attempt to obtain public funding in connection with the action, which was first granted in September 1994. In that month the validity of the writ was extended for two months; and, just prior to the expiry of that period, it was served on the then defendants. That was the moment when Mr Byrt began to act for the appellants. Early in 1995 he instructed Dr Baker to advise them, initially as a paper exercise. It seems that, at a directions hearing before a Master in February 1996, the advocate for the appellants indicated that they might in the future aspire substantially to enlarge their claim to allege that the yacht was a constructive total loss. The Master indicated that, if they wished so to amend, they should apply there and then (which they did not do) and that he would look with disfavour upon any later such application.

In 1996 Mr Byrt persuaded the Legal Aid Board to authorise the instruction of Dr Baker and Mr Bowman, who was a marine surveyor, to inspect the yacht in Lisbon; and also to fund x-rays of certain welds on the hull, to be taken, under Dr Baker’s supervision, by the Institute of Welding in Portugal, namely ISQ. Accordingly in January 1997 Dr Baker and Mr Bowman inspected the yacht; and Dr Baker supervised the taking of x-rays by ISQ. He directed x-rays to be taken at four locations. In the event however it proved impossible to obtain radiographic images at three of them. The report by ISQ in relation to the fourth, carried out on a part of the hull remote from the rudder, was that the weld was defective in three respects, namely in that it had gas cavities, porosity and wormholes. Nevertheless it was Dr Baker’s view, conveyed orally to Mr Byrt, that the x-ray did not enable him to state that all the welds of the hull were likely to be faulty and indeed that his own inspection with Mr Bowman had led them to conclude that the hull was in a reasonable condition. Pressed by Mr Byrt, Dr Baker expressed his opinion that the porosity shown in the x-ray would be unlikely to cause failure of the weld over the anticipated life of the yacht. Dr Baker explained that in order to conduct x-ray examination of all the welds, all the interior fittings of the yacht would have to be removed and that, on the basis of what had so far been discovered, he could not recommend that such expenditure was appropriate. In the event, however, following discussion with Mr Bowman, he suggested that, at any rate as the next step, x-rays should be taken of six further welds, even though they could be taken only following the removal of fittings which, together with subsequent reinstatement, would take about three days.

Mr Byrt thus faced the task of seeking to persuade the LAB to authorise expensive further investigation with a view to the possible enlargement of what to date had been a modest claim. There were thus a number of dealings on the part of Mr Byrt with Dr Baker and with Mr Nigel Jacobs, then junior counsel, whom he instructed to advise the appellants. By letter to Mr Byrt dated 4 November 1997, Dr Baker summarised his views at that time in the following terms:

In July 1998, following various discussions with Mr Byrt and, in conference, with Mr Jacobs, Dr Baker produced his first report. The appellants do not criticise it. Dr Baker concluded that, in switching from steel to aluminium, those responsible for the construction of the yacht had failed to allow for the lesser fatigue strength of aluminium than of steel; and that the inadequate thickness of the aluminium had been responsible for the failure of the skeg and thus of the rudder. In relation to wider concerns about the seaworthiness of the whole yacht, Dr Baker said as follows:

In the light of the possibility of generally defective welds on the yacht and of Dr Baker’s previous suggestion that examination of six welds might reasonably be carried out, Mr Byrt applied to the LAB for authority to cover the costs of such an examination. In October 1998, however, the Board refused his application but suggested that, were attempts at settlement to fail, the appellants might reapply. Mr Byrt responded by saying the negotiations towards settlement had stalled and that in his submission the taking of the further x-rays was reasonable. Mr Byrt followed his letter with formal applications for authority to cover the cost of the further x-rays; and in March 1999, in the light of the absence of any revised response from the Board, he again pressed for funding for them.

Meanwhile, in February 1999, Mr Jacobs wrote a substantive Advice. He suggested that the appellants had prospects in excess of 50% of establishing a breach of contract and/or negligence against the builders and the surveyors. It was his preliminary view that their recovery was unlikely to exceed about £130,000 and might be considerably less. He addressed their contention as to the general unseaworthiness of the yacht as follows:

In the light of the Advice of Mr Jacobs, the LAB issued notices to show cause why legal aid should continue. It asked the appellants to explain why it remained reasonable for them to continue to receive public funding in view of the value of the claim and the likely costs and risks. In May 1999, notwithstanding a detailed response on the part of Mr Byrt, the Board discharged the certificates. Mr Byrt asked the Board to reconsider its decision and in June 1999, on appeal to the Area Committee, he secured reinstatement but only for the purposes of funding a proposed mediation. The appellants also informed Mr Byrt that they were dissatisfied with the Advice of Mr Jacobs and wanted a second opinion from other counsel. Thus Mr Byrt pressed the Board for authority to instruct Mr Stafford. Its initial response was to reject Mr Byrt’s request but in September 1999 it relented.

Prior to the issue by Mr Stafford in December 1999 of his Advice, there was, on 10 November 1999, a conversation between the second appellant and Dr Baker, the content of which founds the appellants’ case against him. It is important to note that the conversation took place as a result of an unsolicited telephone call on the part of the second appellant to Dr Baker, who had had no dealings with the case for the previous 15 months. Thus it was not a situation in which he was formally asked to give a considered opinion on a remunerated basis. There is no transcript of the conversation. We have not been referred to any note of it made by the second appellant at the time. Nor is there any note of it made by Dr Baker, who died in 2005, prior to the issue of the present proceedings, and who, prior to his death, may not even have been asked to comment on the conversation. All we have is an attendance note by Mr Byrt dated 11 November 1999 of a telephone call from Dr Baker in which the latter referred to the conversation which he had had with the second appellant. Mr Byrt noted as follows:

At the hearing of the appeal we sought to discover whether Mr Byrt had sent to Mr Stafford his attendance note dated 11 November 1999 of his conversation with Dr Baker or had otherwise explained its content to him. It seems that there is no evidence that he did so. There is, however, an attendance note by Mr Byrt of a conversation between him and Mr Stafford on 2 December 1999. It appears that by that time the appellants had told Mr Byrt that by chance in Portugal they had met a marine surveyor based in Dubai, namely Mr McAllister, and that they wanted him to be instructed, with the benefit of public funding, to prepare a report. Mr Stafford informed Mr Byrt that in his opinion the court would not grant leave to the appellants to adduce in evidence a report from another expert and that any further expert evidence on their behalf would have to be limited to a supplementary report by Dr Baker, were he to see fit to write it.

On 10 December 1999 Mr Stafford provided his substantive Advice, which ran for 59 paragraphs across 36 pages. In relation to establishing liability on the claim as pleaded, Mr Stafford was marginally more optimistic than had been Mr Jacobs: for he assessed the chances of success against the builders and the surveyors as at least 60% and possibly 70%. In relation, again, to the claim as pleaded, he set out elaborate calculations which yielded a conclusion that the damages would be between about £144,000 and £162,000. He recorded his instructions that the costs already incurred on the part of the appellants amounted to £86,000. In relation to the enlargement of public funding for the purpose of bringing the claim, as pleaded, to trial, Mr Stafford said as follows:

Until two days prior to the hearing of the appeal there was no complaint on the part of the appellants about any part of Mr Stafford’s Advice dated 10 December 1999. Then, however, by service of his skeleton argument, Mr Shapiro sought to erect a complaint about the way in which Mr Stafford had, in his Advice, addressed the appellants’ wider complaint about the yacht. Under a heading “The potential problem with the keel”, Mr Stafford wrote:

Notwithstanding the absence of public funding for any report by Mr McAllister, the appellants extracted evidence from him. By letter to them dated 12 January 2000, prior to which he had read the papers filed in the proceedings but not examined the yacht, Mr McAllister offered the view that, irrespective of the quality of the welding of the hull, the yacht had been constructed with aluminium of inadequate strength and that accordingly, even were the repairs referable to the skeg and rudder to be effected, the yacht would remain inherently unseaworthy. Mr Byrt at once placed Mr McAllister’s letter before the LAB in addition to the Advice of Mr Stafford dated 10 December 1999 and he asked the Board to reconsider the limitations upon the certificates. By letter dated 29 February 2000, however, Mr Wood, a supervisor at the Bristol area office of the Board, informed Mr Byrt that in his view neither the Advice of Mr Stafford nor the report of Mr McAllister justified a grant of public funding beyond the proposed mediation.

By this time the appellants were stating that they had lost confidence in Dr Baker. In April 2000 they informed Mr Byrt that in their view he was “hand in glove” with Lloyd’s underwriters, by which they may have intended to refer to the insurers for the defendant surveyors. They also, at their own expense, asked Mr McAllister to inspect the hull of the yacht and to that end they hauled it into dry dock. No doubt with their approval, Mr McAllister arranged for the taking of 18 x-rays of welds in the hull, albeit that of course the failure of the yacht had by then occurred almost ten years previously. In the event Mr McAllister provided two reports, dated 19 May 2000 and 7 June 2000. Mr Shapiro frankly confirms to us that the appellants asked Mr McAllister to produce the report dated 7 June 2000 in terms somewhat revised from those of the report dated 19 May 2000 in particular omitting a passage in which he had applauded Dr Baker’s report dated 27 July 1998 as explicit and well-detailed and had confirmed that he, Mr McAllister, regarded Dr Baker’s conclusions as fair and reasonable. The substance of the second report was that the new x-rays indicated that all the welding of the hull was defective; that there were no signs that the defects had arisen during the decade following the failure of the yacht; and that therefore the defects in the yacht transcended those in the skeg. Indeed Mr McAllister, though surely unlikely to be in a position to comment on the quantum of the appellants’ claim, inserted into the second version of his report an assertion as to the total loss sustained by the appellants as a result of the defects in the yacht’s construction; and to that end he inserted six figures totalling £398,000, subject to its salvage value which he estimated at £20,000.

Curiously the appellants themselves sent a copy of Mr McAllister’s report dated 7 June 2000 directly to the LSC and to the solicitors acting for the marine surveyors; they did so without reference to Mr Byrt. They also sent a copy directly to Mr Stafford.

On 13 June 2000 Mr Byrt and Mr Stafford discussed Mr McAllister’s report. Mr Stafford expressed surprise that the appellants had catapulted the report into the proceedings without reference to him or to Mr Byrt. Mr Stafford advised that the appellants would not be allowed to adduce competing reports and that the only way in which the material in Mr McAllister’s report could be adduced in evidence would be for Dr Baker to consider the material and, if he saw fit, to incorporate it into a supplementary report of his own. Mr Stafford’s advice, therefore, was that the report should be sent to Dr Baker and that he should be asked to consider it, initially on a pro bono basis. Mr Byrt at once wrote to Dr Baker along the lines suggested by Mr Stafford but Dr Baker responded by saying that he was reluctant to carry out further work on the case in that the fee for his report given almost two years earlier still remained unpaid. Resolution of this impasse would obviously have been achieved by payment of Dr Baker’s long-outstanding fee. But in this regard there was a significant development. For in a telephone conversation with Mr Byrt on 29 June 2000 the second appellant told him that she and the first appellant did not want Mr Byrt to pay Dr Baker’s fee nor to instruct him to work further on the case. In a letter dated 30 June 2000 to the appellants, Mr Byrt recorded his understanding of those instructions; and the appellants confirmed them in a reply dated 1 July 2000.

Meanwhile the date for the attempted mediation with the defendant surveyors, namely 17 July 2000, was approaching. Mr Byrt considered that he should collect the views of the LSC in relation to Mr McAllister’s report: clearly, were he to be able to inform the surveyors at the mediation that public funding had been enlarged in the light of Mr McAllister’s report, the negotiating position of the appellants would be substantially stronger. In this regard, however, there was a telephone conversation between Mr Byrt and Mr Wood on 13 July 2000, in the course of which Mr Wood indicated that, notwithstanding the report of Mr McAllister, the LSC was not minded to enlarge the ambit of the appellants’ certificates. The sequel to this conversation was the letter from Mr Byrt to the LSC, for the attention of Mr Wood, dated 13 July 2000, which, in that it forms the main allegation of negligence and breach of contract against Mr Byrt, I here set out:

At the mediation meeting on 17 July 2000 the defendant surveyors offered to settle the claim against them in the sum of £80,000 plus costs to be assessed if not agreed. By that time Mr Byrt estimated the appellants’ costs at £96,000. The appellants rejected the offer and indicated that the minimum acceptable offer, clearly predicated on the wholesale faults in the yacht identified by Mr McAllister, would be £300,000, presumably plus costs. It is clear that Mr Byrt was extremely concerned at what he regarded as the unrealistic level of settlement identified by the appellants. In particular he was exercised by the inability of the appellants to continue to press their claim with the benefit of public funding. Within hours of the end of the mediation meeting Mr Byrt had asked Mr Jacobs by telephone for his advice in relation to the offer made to the appellants; and he had written both to Mr Stafford, inviting a short written Advice on the merits of the offer, and to the LSC, indicating that he was seeking the views of Mr Stafford and would forward them when received. In these proceedings Mr Stafford relies on the fact that, when approached for advice by telephone, his predecessor, Mr Jacobs, advised acceptance of the offer.

On 21 July 2000, i.e. within four days of Mr Byrt’s request for a short written Advice, Mr Stafford provided it. The appellants’ case against Mr Stafford in these proceedings is founded upon this Advice. In it Mr Stafford wrote that the fundamental practical problem faced by the appellants was that they had no public funding with which to take their claim to trial; that “any attempt to introduce Mr McAllister’s report as evidence is almost bound to fail”; that the appellants could of course act in person at trial but that the law to be researched and argued was extremely complex; that, once the surveyors learnt of the limitations upon the ambit of public funding granted to the appellants, they would almost certainly reduce their offer, perhaps to zero; and that, in the light of his estimate of the chances of success and of the amount of damages likely to be recovered in the event of success, as set out in his Advice dated 10 December 1999, the offer of £80,000 was attractive irrespective of the appellants’ public funding difficulties.

Although at the end of his Advice dated 21 July 2000 Mr Stafford offered to respond to any questions on the part of the appellants in relation to it, no questions were forthcoming; and it seems that the appellants decided to allow Mr Stafford to have no further involvement in the case. On any view his involvement ended with the Advice. The appellants also instructed Mr Byrt not to continue to negotiate with the defendant surveyors; indeed it appears that late in 2000 they withdrew instructions from Mr Byrt himself.

In November 2000, presumably in the light of Mr Stafford’s Advice, the public funding certificates of the appellants were discharged. Without going on record as acting for them, another firm of solicitors lodged appeals on their behalf against the discharge. On 6 February 2001 a funding review committee of the LSC allowed the appeals but only to the extent of reinstating the certificates for the purpose of exploring whether, as in July 2000 the mediator had intimated might be possible, the surveyors would increase their offer to £100,000. Again, therefore, the LSC, even at appellate level, was taking the view that, notwithstanding Mr McAllister’s report, there should be no general funding of the claim to trial.

The problem was that the appellants were uninterested in any settlement even in the sum of £100,000. The impasse remained: the appellants had shed the services of Dr Baker; had rejected the advice of Mr Jacobs, of Mr Stafford and of Mr Byrt; indeed, had also shed their services; and yet had no means with which to press on with the action in the manner which they favoured. Substantial further delay was accruing.

In July 2001, in the absence of any appetite on the part of the appellants for settlement at £100,000, even if offered, their certificates were once more discharged, apparently following representations made to the LSC by the defendant surveyors. In September 2001, however, the certificates appear to have been reinstated: this part of the history is not entirely clear and, in particular, assuming that the certificates were indeed then reinstated, the limitations then placed upon them are not apparent. At all events the reinstatement of public funding persuaded a fresh firm of solicitors, namely Johnson Sillett Bloom (“Johnsons”), to go on record as acting for them in the proceedings. In due course Johnsons persuaded the appellants to travel down the path recommended by Mr Stafford almost two years earlier, namely to request Dr Baker to survey Mr McAllister’s report and, if so minded, to adopt his findings. To that end Johnsons collected the appellants’ permission for Dr Baker to be paid his outstanding fee; secured an extension of the certificates in order to fund Dr Baker’s further work; and, on 3 October 2002, instructed him to file a further report in the light in particular of the 18 x-rays taken in May 2000. Just prior to their instruction of Dr Baker, however, namely on 16 September 2002, the defendant surveyors had applied for an order striking out the claim.

(a) It is at this stage of the history that Mr Shapiro’s discovery of further material only working hours prior to the hearing before this court becomes relevant. The material is the first appellant’s public funding certificate, marked as amended with effect from 23 September 2002, and apparently subject to two limitations, namely, first, limited to all steps up to but excluding trial but including obtaining counsel’s opinion and, second, limited to costs of £20,000 excluding VAT. In that it seems that at all material times the appellants had separate certificates in identical terms, it is Mr Shapiro’s submission that in September 2002 public funding must, subject to counsel’s opinion, have been extended up to but excluding trial and subject to an overall limitation of £40,000. By September 2002, so Mr Shapiro concedes, any such opening of the door to progressing the claim with the benefit of public funding had come too late; his case is, however, that, in that Johnsons were able to achieve it in September 2002, albeit that it was then too late, Mr Byrt and Mr Stafford could and should have achieved it in 2000, at which time it would not have been too late.

I make no criticism of Mr Shapiro when I observe that it is highly unsatisfactory for this court to be presented so late with this argument referable to the amendment with effect from 23 September 2002. Johnsons would presumably know how and why the amendment or amendments dated 23 September 2002 was or were effected. Mr Shapiro is unable to explain to us why, in the light of the LSC’s repeated prior refusal to extend public funding other than for attempted mediation, it should, indeed even in advance of the anticipated supplementary report from Dr Baker, entirely change its approach. The hypothesis of Miss Mulcahy is that the conjunction of the dates of the issue of the strike-out application and of the amendment to the certificate or certificates only one week later indicates that what the LSC agreed to fund was the appellants’ resistance to the strike-out application. I have to say that, assuming that Mr Shapiro is correct to conjecture that the costs limitation was £40,000 rather than £20,000, such would be a surprisingly substantial maximum sum if earmarked only for resistance to a strike-out application. Speaking for myself, I am left in doubt about the alleged significance of the amendment to the first appellant’s certificate dated 23 September 2002 and am forced to reflect that the appellants have had ample time in which to present this argument properly, with evidence as to the nature of the request to the LSC which led to it. Even were we formally to admit this fresh evidence into the appeal, I could not place the weight upon it which Mr Shapiro commends to us.

Dr Baker promptly decided that, in that he had no specialist training in the interpretation of x-rays, he would arrange for assessment of the 18 x-rays by The Test House in Cambridge. On 25 November 2002 The Test House reported to him. It concluded that all the welds which had been x-rayed exhibited levels of porosity in excess of recommended levels and were amongst the most porous which it had seen in production welding. The levels of porosity, coupled with other features, were in its opinion indicative of either an inappropriate welding procedure or a lack of competence on the part of the welder and raised serious issues as to the yacht’s integrity. On 30 November 2002 Dr Baker provided his further report. No doubt in accordance with the intention of Mr Stafford, Dr Baker made no reference to the report of Mr McAllister. Dr Baker not only reiterated the criticisms of the construction of the skeg which he had made in 1998 but also, of course, incorporated the conclusions of The Test House. He reported as follows:

It was therefore at that point, say the appellants, they at last secured an adverse verdict upon the overall construction of the yacht by their court-permitted expert, such as should in principle have enabled them to secure damages on the wider basis at trial. Unfortunately, however, their claim had in the interim, namely on 13 November 2002, been struck out by Judge Knight; and their attempts to secure permission to appeal against his order proved unsuccessful. In his judgment Judge Knight recorded the submission on behalf of the appellants that, ever since receipt of the report of Mr McAllister in June 2000, they had intended to amend their claim in order to allege a wholesale inadequacy of the welding; that Dr Baker had recently been asked to advise in that regard; that it was confidently expected that, in the light of the 18 x-rays, he would adopt the criticisms made by Mr McAllister; and that an application for permission to amend the particulars of claim would thereupon be made. It is clear that the spectre of enlargement of the claim 12 years after the failure of the yacht and eight years after issue of proceedings was a significant factor in the judge’s decision to strike out the claim: for it foreshadowed considerable further delay, considerable further costs and, in the judge’s view, substantial prejudice to the defendants in seeking to assemble a defence to a new claim in relation to events so long ago. In a passage upon which Mr Shapiro relies, the judge said that “the welding defects were evident from day one and should have been incorporated in the case at a much earlier stage”. With respect to the judge, I do not entirely follow that passage: widespread defects were certainly not evident to Dr Baker when he wrote his report in July 1998 and the appellants have never suggested that he was negligent in regard to that report. The judge proceeded, in his own words, “to make a clear finding that there has been unjustified delay since 1998, and … in particular from the receipt of the McAllister report”.

At last the allegations of negligence and breach of duty against the respondents can be considered in context.

As pleaded, the case against Mr Stafford is founded upon his Advice dated 21 July 2000 and in particular his assertion that any attempt to introduce the report of Mr McAllister into evidence was almost bound to fail. Notwithstanding the robustness of the language which he used, there were in my view strong grounds for pessimism in that regard. The difficulties in persuading a judge retrospectively to authorise the instruction of a second expert, six years after the launch of proceedings, were profound; there were also doubts about Mr McAllister’s independence and, in the light of his venture into the quantum of the appellants’ claim, his preparedness to adhere to the area of his expertise. I need not develop these points because Mr Shapiro has seen fit to move away from criticism about the deployability of Mr McAllister’s report itself to the suggestion that Mr Stafford’s only proper course should have been to press for Mr McAllister’s material to be adopted by Dr Baker. There is, however, an insuperable problem for Mr Shapiro in that regard. For on 13 June 2000 Mr Stafford had advised Mr Byrt to attempt to secure just such an enlargement of Dr Baker’s report; and Mr Byrt’s subsequent efforts along those lines met an impasse created by the appellants’ instructions to him that Mr Byrt should not meet Dr Baker’s condition for further work, namely payment of the fee for his report dated 27 July 1998, and indeed should not authorise him to undertake any further work on their behalf. By the time when he wrote his Advice dated 21 July 2000, a further approach to Dr Baker was therefore blocked; in those circumstances there is in my view no possible ground for criticism of the content of his Advice, still less at the level set for an allegation of professional negligence.

I turn to the allegation of breach of duty against Dr Baker. In my view the court has to approach Mr Byrt’s attendance note dated 11 November 1999 with particular caution. It is a note of what Dr Baker, who is now dead and cannot comment, is said by Mr Byrt to have alleged to have been the content of his, Dr Baker’s, conversation on the telephone on the previous day with the second appellant, who had called him out of the blue and over a year after he had had any involvement with her claim. It is not a promising context for a finding of professional negligence. The charge is of profound and, for the appellants, devastating inconsistency between the references by Dr Baker in his report dated 27 July 1998 to some doubt regarding the long term integrity of the hull structure and the adequacy of the construction of the keel to hull connection and, on the other hand, his comments on 10 November 1999 that the remainder of the hull was OK, that he was happy with its construction and that, once repairs to the skeg and rudder were undertaken, he would be content to sail in the yacht. I agree with Mr Shapiro to the extent that, at any rate at first sight, there is a significant discrepancy between the two ostensible expressions of view. In my view however Mr Rainey makes some, albeit perhaps only limited, progress in explaining the discrepancy. His argument is that Dr Baker’s expression of doubt about the long term integrity of the hull was predicated with the words “if the butt weld which has been examined is typical of those throughout the hull …”. On 10 November 1999, says Mr Rainey, Dr Baker was doing no more than giving an opinion upon the evidence as it stood. Upon that evidence, Dr Baker (so the argument runs) could not responsibly say other than that the rest of the hull was sound. Equally important, in my view, is the context to which I have referred: in the telephone conversation Dr Baker was responding to the second appellant’s unsolicited enquiries and cannot have imagined that he was adding to, or subtracting from, the definitive and considered views contained in his written report. Such is evident from the lack of significance subsequently attached to what Dr Baker had apparently said to the second appellant. A preliminary part of the charge against Mr Byrt is that he did not challenge Dr Baker about his apparent change of opinion. It is clear, however, that Mr Byrt omitted to do so because he regarded the conversation with the second appellant as having no significance, in particular no new adverse significance, in relation to the progress of the claim. Importantly, there is nothing to indicate that Mr Byrt sent his attendance note to Mr Stafford, who was preparing his Advice; certainly Mr Stafford there made no mention of it. No fresh material had been placed before Dr Baker which could have been regarded, whether by him, by the appellants or by Mr Byrt, as a basis for departure from the conclusions in his written report; and, had Dr Baker’s comments to the second appellant been regarded as significant, he would no doubt have been invited, and would have wished, to express them in a considered form in writing. In truth the erection of the case against Dr Baker by reference to the attendance note dated 11 November 1999 is an opportunistic attempt to invest the hearsay there contained with a significance way above its proper level.

The gravamen of the case against Mr Byrt lies in his letter to Mr Wood dated 13 July 2000. The charge is that the terms in which Mr Byrt formulated his enquiry about the availability of public funding for enlargement of the claim were so flabby and half-hearted, and paid such comprehensive disregard to the interests of the appellants, that Mr Wood’s negative response was inevitable. One argument inherited by Mr Shapiro is that Mr Byrt’s enquiry dated 13 July 2000 was not made upon the form apt to an application for enlargement of a certificate; but, in particular in the light of comments by Mr Wood to Mr Stafford’s solicitors that the point was technical and that, had the absence of use of the proper form been the only obstacle to enlargement, such would have been pointed out to Mr Byrt, Mr Shapiro hardly maintains that point. He relies almost entirely upon the terminology used in Mr Byrt’s letter.

There is no doubt, by his letter dated 13 July 2000, Mr Byrt scarcely pressed the appellants’ claim for enlargement of public funding and seems in effect to have invited confirmation of refusal. The context was that the mediation meeting was fixed to take place four days later; and Mr Shapiro is probably right to speculate that, by his letter, Mr Byrt wanted no more than written confirmation of refusal on the part of the LSC in order to be able at the mediation to confront the appellants with the fact that, were they to reject a proposal for settlement which was reasonable in terms of the claim as pleaded, they would be unable to progress the claim on the wider basis with the benefit of public funding.

Had Mr Byrt’s letter dated 13 July 2000 been the only, or only significant, attempt on the part of Mr Byrt to obtain public funding with which the appellants might proceed to trial, particularly on the wider basis, their case against Mr Byrt would have been highly arguable. But there is a disingenuousness about their complaint against him. For since August 1998 Mr Byrt had sought assiduously for extensions to the public funding of the appellants both in regard to discrete areas such as the funding of further x-ray examinations and of a second opinion from Mr Stafford and also generally so that the claim might be prosecuted to trial and indeed enlarged to the wider basis. Ever since June 1999 the legal aid authorities had, apart from eventually agreeing to fund Mr Stafford’s Advice, set their face against any further funding other than towards a mediated settlement. Mr Stafford’s Advice that it would be in their interests to fund the claim, as pleaded, to trial had not moved them; nor had Mr Byrt’s submission of Mr McAllister’s letter dated 12 January 2000; nor, indeed, had the appellants’ own submission to them of Mr McAllister’s report dated 7 June 2000. It is positively unfair to Mr Byrt to portray his letter dated 13 July 2000 as an index of his efforts to secure public funding. By then he had made strenuous efforts; but his battle was lost and he wanted evidence of its loss.

For those reasons, expressed more fully than by the judge, I agree with his conclusion that the appellants have no real prospect of establishing a breach of duty against any of the three respondents. He expressed his conclusions referable to breach of duty only in summary form because he had accepted the suggestion made on behalf of the respondents that the quicker route to discern the absence of any real prospect of success against them lay in an analysis of whether, were any of them to have perpetrated a breach of duty, there would be any such prospect of establishing that it caused loss to the appellants. This enquiry into causation falls into two parts.

First, but for any such breach, would public funding have been secured with which to take the case to trial on the wider basis? It will at once be clear that this question involves travel over much of the same ground as has required to be traversed in the enquiry into Mr Byrt’s alleged breach of duty. It would in truth be impossible to conclude that the availability of public funding to the appellants in any way receded as a result either of Dr Baker’s conversation with the second appellant on 10 November 1999 or of Mr Stafford’s Note dated 21 July 2000, just as I have concluded that it plainly did not recede as a result of Mr Byrt’s letter dated 13 July 2000. As Mr Rainey stresses, any supposed negativity about the claim on the wider basis expressed by Dr Baker in November 1999 was swiftly followed by positivity on the part of Mr McAllister; nevertheless the LAB/LSC remained quite unmoved. Equally the alleged vice in Mr Stafford’s Note, hard even to articulate let alone to substantiate, cannot be said to have conduced to the LSC’s refusal to fund the claim on the wider basis, which was already entrenched.

Second, even if any of the alleged breaches caused or contributed to the failure of the appellants to secure funding for the claim on the wider basis, did such a claim stand any measurable chance of success? I am clear that the question in this regard is not whether the claim would have prevailed on the basis originally pleaded. Although Mr Shapiro seeks somewhat to resile from it, such was conceded by his predecessor in drafting the particulars of loss and damage as being a loss of “the opportunity of recovering damages … on the basis that the vessel was a constructive total loss”. For the value of the claim as originally pleaded was lost to the appellants not as a result of any act upon the part of any of the respondents but, rather, as a result of their own action in, contrary to the advice of Mr Byrt, of Mr Stafford and, for that matter, of Mr Jacobs, refusing the offer of settlement in the sum of £80,000 in July 2000. In that in December 1999 Mr Stafford had advised that there was a 60% chance of recovering between £144,000 and £162,000, being advice not said to have been negligently given and indeed being more optimistic than that given by Mr Jacobs, it would follow that the offer in July 2000 represented an adequate quantification of the value of the claim as pleaded.

The respondents argue that the appellants’ chance of recovering damages on the wider basis was subject to so many contingencies as to lead to the conclusion that it was negligible. They commend the attribution to each contingency of a percentage chance and then a multiplication of all the percentages, subject only to some adjustment in the appellants’ favour to the extent that any of the contingencies are interrelated. Such an approach was approved by this court in Hanif v. Middleweeks [2000] Lloyd’s Rep 920. In the event Mr Shapiro fails to persuade me that there is fallacy in such an approach, even though, to take a hypothetical example, it leads to a conclusion that a claim has only a 9% chance of success if it is subject to 11 unrelated contingencies, each of which has an 80% chance of success. But, in finding that the appellants had no real or substantial chance of recovery on the wider basis, the judge, in my view rightly, considered that there was no need to do any mathematical calculation. Broadly he surveyed the various contingencies pressed upon him on behalf of the respondents. When I do likewise, I conclude – and here I respectfully differ from the judge – that the contingency most problematical for the appellants relates to whether the court would have allowed them to proceed on the wider basis even if, following the provision of Mr McAllister’s report in June 2000, Dr Baker had in effect incorporated its findings in his evidence late in 2000 rather than late in 2002. Of course the further question arises whether Dr Baker’s support for the wider basis would have secured ultimate victory for the appellants; and in that regard the doubts arise from an inability to discern what the expert response on behalf of the defendants to a claim on the wider basis would have been. But, as I have indicated, the prior question turns on the fate of any application to amend in, say, 2001 in order to make the claim on the wider basis. No doubt it would have fetched a cross-application to strike out the claim. In circumstances in which the yacht had failed ten years earlier, in which the action had begun seven years earlier and in which a Master had indicated five years earlier that, if not made at once, an application to amend to proceed on the wider basis would be regarded with disfavour, I regard the contingency that in 2001 the appellants would have secured permission to amend and would successfully have resisted a strike-out as negligible. In my view, therefore, this second argument on behalf of the respondents referable to causation also prevails.

It is for such reasons that I would dismiss the appeal.

I agree.

I also agree.