Dayman v Lawrence Graham (a firm)

This is the trial of a claim by Mrs Sara Dayman, a licensed insolvency practitioner, as the trustee of the estate of a former bankrupt, Mrs Sandra Estelle Fielding, for damages for alleged breaches of contract and professional negligence against Lawrence Graham, a firm of solicitors, who had acted for Mrs Fielding during the months of February to June 2000 on the sale of the long leasehold interest in her home at 6 Hanover Terrace, Regents Park, London NW1 (“Hanover Terrace”) for £3 million and the purchase of the long leasehold interest in a new home at 29 Cumberland Terrace, Regents Park, London NW1 (“Cumberland Terrace”) for £677,500. It is said by the claimant that, as a result of Lawrence Graham's acts and omissions in their conduct of these sale and purchase transactions, Mrs Fielding lost the chance of avoiding liability for the balance (amounting to some £3m) of a debt which her husband, Michael Fielding, then a partner in Lawrence Graham, had run up, without her knowledge, on an account with the Royal Bank of Scotland (“RBS”) in the joint names of Mr and Mrs Fielding (“the Joint Account”).

Following the trial of an action brought by RBS to recover that debt from Mrs Fielding (“the RBSaction”), which lasted some 10 court days between 10^th and 28^th March 2003, by a reserved judgment handed down on 2^nd May 2003 (the neutral citation number whereof is [2003] EWHC 986 (Ch)) the late Hart J ordered Mrs Fielding to pay RBS the sum of £3,559,652.31, inclusive of interest to the date of the order. An appeal by Mrs Fielding was dismissed by the Court of Appeal (Potter and Jonathan Parker LJJ and Charles J) on 11^th February 2004: see [2004] EWCA Civ 64. Mrs Fielding sought leave to appeal to the House of Lords, but this was refused in June 2004. On 14^th July 2004, Mrs Fielding was adjudged bankrupt upon a petition presented by RBS founded upon that judgment debt. The claimant was appointed Mrs Fielding's trustee in bankruptcy with effect from 26^th August 2004. Mrs Fielding was discharged from bankruptcy on 18^th May 2005; but any cause of action which Mrs Fielding may have against Lawrence Graham remains vested in the claimant as her trustee in bankruptcy. On 28^th February 2006, the claimant initiated the present claim, founded upon that alleged cause of action, which was allocated to the multi-track by an order of Deputy Master Hoffman made on 13^th August 2007. An application by the defendants to strike out the claim and/or for summary judgment against the claimant was dismissed by Mr Jules Sher QC (sitting as a deputy judge of the Chancery Division) in a reserved judgment handed down on 16^th June 2008 (the neutral citation number whereof is [2008] EWHC 1352 (Ch)).

The trial began before me on Tuesday 15^th July 2008 (preceded by a day’s pre-reading) and it lasted 10 court days. The claimant is represented by Mr Bernard Livesey QC, leading Mr David Eaton Turner. The defendants are represented by Miss Sue Carr QC, Mr Ben Hubble and Miss Sarah Cowey.

The present litigation (which may be styled “the Case of the Wronged Wife”) displays at least four unusual features: First, the claimant does not allege that Lawrence Graham caused Mrs Fielding to suffer loss in the conventional sense since (on Hart J’s findings, affirmed on appeal, in the RBS action) she was already liable to RBS for some £5.51 million prior to Lawrence Graham's involvement. Rather, it is said that Mrs Fielding lost the opportunity, between February and June 2000, to challenge the extent of her indebtedness to RBS at that time, with a view to negotiating a settlement which, so her trustee now contends, would have resulted in RBS releasing Mrs Fielding from all further liability to itself in return for the £2.51 million which it in fact received from the sale proceeds of Hanover Terrace; and this notwithstanding the fact that, only some 12 months later, RBS initiated hotly contested litigation against Mrs Fielding which culminated, some 3 years later, and only after a 10-day trial before Hart J and a full-blown appeal before the Court of Appeal, at both of which RBS was represented by leading and junior counsel (Mr Charles Purle QC and Mr David Eaton Turner), in RBS making Mrs Fielding bankrupt. In the course of the RBS action, Mrs Fielding was ordered to make interim payments on account of RBS’s costs of £350,000 and £50,000 by Hart J and by the Court of Appeal respectively; and RBS’s solicitors estimate that it would have been awarded a further £175,000 on a detailed assessment of its costs. RBS estimates that Mrs Fielding herself incurred costs in the region of £475,000 in defending (and counterclaiming in) the RBS action up to and including her application for leave to appeal to the House of Lords. During the evidence of Sandy Wilson, formerly RBS’s Head of Recoveries & Litigation within its Specialised Lending Services (“SLS”) division, it was disclosed that RBS was financing the claimant’s costs of the present claim.

Secondly, the effect of the claimant succeeding in this litigation will be that RBS, as the most substantial creditor (to the extent of some 94%) in Mrs Fielding's insolvency, will succeed in recovering a substantial part of a debt from which, on this footing, it would have agreed to release Mrs Fielding. Thirdly, the claim is one founded on allegations of breaches of duty, in the course of acting as her solicitors, which Mrs Fielding herself has never sought to advance against Lawrence Graham despite having had ample opportunity to do so, particularly during the course of the RBS action.

Fourthly, the claimant brings this claim without calling Mrs Fielding (or her husband) to give supporting evidence, notwithstanding the claimant’s recognition that she must discharge the burden of establishing, on the balance of probabilities, what Mrs Fielding would have done if she had received appropriate advice from Lawrence Graham. As I observed in the course of the trial, this is not merely Hamlet without the Prince, but a production from which Ophelia too is conspicuously absent; and, as the trial progressed, it became apparent to me that Polonius is also missing from the stage. Indeed, the only witnesses tendered by the claimant are present or former employees of RBS; and the solicitors retained by her in this litigation (Cripps Harries Hall LLP) are the firm which represented RBS in its earlier action. (Indeed, junior counsel for the claimant also acted for RBS in its earlier action.) It is in these circumstances that the claimant has, sensibly and realistically, accepted that she should treat herself as bound by Hart J’s findings of fact in the RBS action. In addition, on 4^th July 2008, the claimant served a hearsay notice indicating her desire to present in evidence the written and oral evidence given by Mrs Fielding at the trial of the RBS action.

The claim also raises interesting issues of law relating, first, to the nature of the duties owed by a firm of solicitors when acting for the wife of one of its partners on her sale of the principal matrimonial home and purchase of a replacement property, both of which are, or become, vested, both legally and beneficially, in her sole name; and, secondly, to the proper approach to the assessment of damages for the loss of the chance of avoiding a pre-existing liability, in circumstances where the court has no opportunity of hearing, and evaluating, the evidence of the true claimant.

The background to the present claim is quite remarkable. In his judgment in the RBS action, Hart J described the history as “extraordinary” (paragraph 42); and, in his earlier judgment in this litigation, Mr Sher QC has referred to the events as “astonishing” (paragraph 4). Mr and Mrs Fielding married in 1968 at the ages of 22 and 21 respectively. Mr Fielding qualified as a solicitor in 1971, achieving the top results in his Law Society finals. Mrs Fielding gave up work as a medical secretary following the birth of Jeremy, their first child, in 1972, after which she worked within the home and, as her sons grew older, she undertook a 4-year degree course at Middlesex University, graduating in 1989 with a 2.1 honours degree in American Studies. Over the years, Mr Fielding gained considerable experience and expertise in the fields of commercial property and, later, corporate and financial work. After a short spell with Simmons & Simmons, he had become a partner in the firm of Grangewood Allen, which was the in-house law firm to the Stern Group. Following that Group's collapse in 1974, Mr Fielding, with one or two of his colleagues, founded their own firm, Grangewoods, practising from offices in Harley Street. Over the following decade, that firm prospered; and, during the 1980s, Mr Fielding came to be seen, not only as a solicitor at the head of a prosperous practice, but also as a shrewd and successful businessman on his own account, operating in the world of commercial property, in which he invested through the medium of offshore trusts created for the benefit of his family. In or about November 1988, Mr Fielding resigned from Grangewoods in order to devote himself more fully to the affairs of two property companies in which he had an interest. In 1989, Grangewoods was dissolved leaving substantial partnership debts, as well as further personal indebtedness of the individual partners. By this time, Mr Fielding had already accumulated substantial personal borrowings, which increased over the succeeding years; and his financial position was exacerbated by his volunteering to act as the guarantor of the liabilities of certain of his former partners in Grangewoods.

In or about 1996, Mr Fielding joined the firm of Lawrence Graham, becoming a full, and respected, partner in that practice’s corporate and commercial department. In 1998, he embarked upon a series of thefts from the firm's client account in order to salvage himself from the dire financial position into which he had sunk, apparently hoping that, in the end, his commercial property and other business ventures would provide the means to make good his defalcations. In the course of the following years, and until the middle of 2001, Mr Fielding stole sums amounting to in excess of £5.8 million. On one day in June 1999 alone, Mr Fielding stole sums in excess of £1.1 million. On 2^nd June 2001, Mr Fielding cleared his desk at Lawrence Graham, leaving a letter to the senior partner in which he confessed that he had removed substantial amounts of clients’ funds without authority and he stated that it was his intention “to be abroad for some time”. With his wife, Mr Fielding absconded to Florida, in the United States of America. There they lived together in a condominium flat which Mr Fielding had purchased in February 2000 for some $675,000 and which, in June 2000, he had transferred into the name of a British Virgin Islands company apparently controlled by Mrs Fielding. They remained there together until June 2005, when Mr Fielding returned to the United Kingdom voluntarily, but in the face of extradition proceedings which had been, or were about to be, initiated against him. On 6^th October 2005, at the Crown Court at Southwark, before His Honour Judge Rivlin QC, Mr Fielding pleaded guilty to 24 offences of theft, and he asked for 89 similar offences to be taken into consideration. After an adjournment for reports, on 3^rd November 2005 Mr Fielding was sentenced by the same judge to terms of imprisonment totalling 8 years. His appeal against that sentence was dismissed by the Court of Appeal (Moses LJ, McCombe J and His Honour Judge Martin Stephens QC) on 4^th December 2006. The view of the court was that, while the sentence was indeed severe, it could not be said to be manifestly excessive: see [2006] EWCA Crim 3183.

In his judgment in the RBS action, Hart J described the bewildering and traumatising effect upon Mrs Fielding of her discovery, in June 2001, that her previously respected and financially prestigious husband was, in all likelihood, and as transpired, nothing more than a common thief, albeit one who had operated on a massive scale. But worse was to follow: shortly thereafter, it was brought home to Mrs Fielding, by the institution of the RBS action and the service upon her, at the flat in Florida on the evening of 7^th July 2001, of a freezing order that had been granted by Buckley J on a without notice application by RBS, that her financial position was very different from that which she had previously believed to be the case. Up to that point in time, Mrs Fielding had been unaware of the fact that she owed anything to RBS, believing that the £3 million sale proceeds of Hanover Terrace had been sufficient to pay off all of her liabilities to RBS; to repay the bridging finance that had been taken out in order to fund the purchase of, and the cost of substantial works of refurbishment to, Cumberland Terrace (which she believed that she owned outright); and to leave her with a balance of some £1 million, which she believed was being held for her by Lawrence Graham on client account. The reality was that some £3 million of the debt owed to RBS on the Fieldings’ joint account still remained outstanding even after the sale of Hanover Terrace; and that Mrs Fieldings’ London home at Cumberland Terrace was fully encumbered, and had been placed on the market, without her knowledge, by chargees of whose existence she had previously been unaware.

The explanation for this remarkable state of affairs was provided by Hart J in his judgment. Despite approaching her evidence “with a considerable degree of initial scepticism”, he found that (except where otherwise indicated in his judgment) Mrs Fielding had been “completely ignorant to the fact of her indebtedness on the Joint Account or the seriousness of Mr Fielding’s financial position from 1989 onwards”. Rather, she had “at all times believed that, whatever the vicissitudes of Mr Fielding's commercial fortunes over the period, the family's fortunes were in the final analysis firmly founded on the rock of a multi-million pound fortune held on behalf of her and her children by the 1982 Jersey Trust. She had therefore not at any stage (save as mentioned below) concerned herself with the way in which Mr Fielding had arranged their joint finances. She had been content to leave it to him” (paragraph 43). At paragraph 46, Hart J expressed himself to be “quite sure that in his financial dealings with Mrs Fielding [her husband's] natural inclination was to be, in her words, both protective and controlling. His self presentation to her was as the great provider, the man who had provided her with one of the most desirable homes in the capital and a £6m offshore trust fund and whose only matrimonial shortcomings were to spend too much time working and to make perfunctory complaints about the cost of the soft furnishings which she chose. I have little doubt that he felt no need to share with her the complexity of their relationship with [RBS].” At paragraph 49, the Judge found that Mrs Fielding allowed her husband “to run their financial affairs and would be easily persuaded by him to lend her signature to any document which he considered it desirable that she should sign”. At paragraph 52, Hart J stated that it was his impression that Mrs Fielding “was the victim of manipulation and deception at the hands of Mr Fielding”.

How had matters come to such a pass? In 1986, Mrs Fielding had purchased the long leasehold interest in Hanover Terrace, with the assistance of a loan account facility provided by RBS, and secured by a legal charge executed by Mr and Mrs Fielding over that property. This charge had secured the repayment of all of their liabilities to RBS, whether joint, several or sole. The execution by Mr and Mrs Fielding of that legal charge had been witnessed by Laurence Begner, then a partner (with Mr Fielding) in the firm of Grangewoods and a family friend.

Mrs Fielding's account of the events leading up to the sale of Hanover Terrace, and the purchase of Cumberland Terrace, is set out in paragraphs 11 through to 16 of a witness statement that she made on 11^th July 2001 for the purposes of the RBS action. Mrs Fielding explained that, in the autumn of 1999, Mr Fielding had raised with her the issue of selling Hanover Terrace. He did not tell her that this was because RBS was pressing him to adopt this course, but merely that, since both their children had grown up and were living in America, and were likely to continue to do so, they did not need such a large house. What he said made sense to Mrs Fielding at the time, and so she agreed to put the house on the market.

Mrs Fielding went on to relate that, in January 2000, she had found a buyer for Hanover Terrace, at a price of £3 million; and in February or March she had exchanged contracts for its sale at this price, with completion to take place at the end of June. Shortly after she had exchanged contracts to sell Hanover Terrace, Mrs Fielding was offered Cumberland Terrace; and she acquired this property in late March for just over £700,000, including costs. Cumberland Terrace required extensive renovation; and Mr and Mrs Fielding funded what they believed would be the total cost of the purchase and renovation works of around £1.25 million by borrowing that sum from Coutts & Co on a bridging basis, effectively securing it by a solicitor’s undertaking from Lawrence Graham to repay them from the sale proceeds of Hanover Terrace. Mrs Fielding believed that this would be repaid from free cash after RBS had been repaid only the loan that had been taken out on the purchase of that property. Afterwards, she believed that this was, in fact, what had been done.

The reality was entirely different, as Mrs Fielding discovered when, in the course of a huge argument with Mr Fielding, the true position was revealed to her early in July 2001. The account that follows is taken from Mrs Fielding’s July 2001 witness statement (but adjusting the figures that she gave to reflect the actual figures). Mr Fielding told his wife that RBS had required most of the Hanover Terrace sale proceeds (some £2.51 million) to be paid to it in order, not only to repay the loan that had been taken out to purchase that house, but also to reduce Mr Fielding's general indebtedness to RBS on their joint account with the bank (about which Mrs Fielding had been ignorant). That left a balance of some £490,000, which was released to Mr and Mrs Fielding from the sale of Hanover Terrace. After paying various agents’ fees and costs, there was only some £350,000 available to repay Coutts & Co, leaving Mr Fielding with a shortfall of over £900,000 on the bridging loan. Without telling his wife, Mr Fielding had arranged to borrow the moneys required, totalling some £925,000, from a Gibraltar trust and from a firm of lawyers in Gibraltar with whom he had had a long relationship. The required security - unbeknown to Mrs Fielding - was a blank transfer form executed by her, together with an irrevocable authority from Mrs Fielding (or from Lawrence Graham on her behalf) in favour of the lenders’ solicitors (Kanter Jules), authorising the completion of a transfer of Cumberland Terrace to whosoever was designated on their behalf if the loan was not repaid. In her witness statement in the RBS action, Mrs Fielding explained that when, at the end of June 2000, the sale of Hanover Terrace came to be completed, there had been a number of documents to be signed: “At that time I still trusted my husband, both as a husband and a lawyer to guide me in matters legal. I did not read or peruse documents my husband asked me to sign and merely accepted his word as to the effect of them. I therefore signed these documents without questioning them, believing them all to relate in some way or another to Hanover Terrace.” Included within the documents that Mrs Fielding signed at the end of June 2000 were the blank transfer and the irrevocable authority to complete relating to Cumberland Terrace. In paragraph 22 of her July 2001 witness statement, Mrs Fielding stated in terms that she did “not believe the RBS claim is a good one. I think it is fundamentally dishonest. I have retained solicitors to advise me and I have no intention, none at all, of not resisting it to the fullest extent possible.”

Mrs Fielding returned to the subject of the sale of Hanover Terrace, and the purchase of Cumberland Terrace, at paragraphs 38 through to 43 of a witness statement that she made on 23^rd October 2002 for the trial of the RBS action. There she relates that she had “thought that the sale would provide enough money to pay off a Coutts bridging loan which Michael had said he could organise of about £1.4 million, and agents fees, and I would be left with around £1.5 million to invest”; and that she was told by Mr Fielding, after the completion of the sale of Hanover Terrace, that the potential surplus of around £1 million that she had anticipated “was in Lawrence Graham's client account, awaiting my decision as to what do with it. I was concerned about this, but Michael assured me it was as good a place as any, as it was safe and earning interest.” With regard to the actual sale and purchase of Cumberland Terrace, Mrs Fielding explained that “these were handled by Ian Caplan, an associate at Lawrence Graham, whom I never met and who I do not recall ever speaking to me. Michael organised this, bringing home papers for me to sign. I recall there was quite a large pile of documents. I asked Michael what they were and he said they were all to do with the sale and purchase of the two properties and that I had to sign them, so I did. In fact, I was signing away all my rights both in Hanover Terrace and Cumberland Terrace. The proceeds of the former went to reduce the joint account to the amount now claimed against me. The latter went to a Gibraltar trust company (Linad), controlled by friends of Michael’s that had lent him the money to buy Cumberland Terrace. I therefore lost my most substantial assets in one go. I would never have agreed to this had I known what I was signing.” In his witness statement made on behalf of his wife in the RBS action, and dated 22^nd October 2002, Mr Fielding explained (at paragraph 37) that “although nominally acting for [Mrs Fielding], the Lawrence Graham associate took his instructions from me. He never spoke to her although he did obtain her written authority to give the undertaking to Coutts.”

Despite the searching nature of the cross-examination to which Mrs Fielding was subjected by Mr Charles Purle QC for RBS, Hart J rejected his submission that her account of these events was suspect. Hart J refused to draw any conclusions adverse to Mrs Fielding’s credit; and he concluded that she had told him the truth on most of the matters in issue in the RBS action. Although the judge rejected Mrs Fielding’s positive case that she had not signed a bank mandate when the Joint Account was opened, he found that “the probability is that Mrs Fielding is mistaken in her recollection that she never visited the branch” premises. He did not find that she had been dishonest in her evidence to the court. At paragraph 64 of his judgment, Hart J endorsed an earlier assessment of Mrs Fielding by a financial adviser as “a not unintelligent but financially unsophisticated lady of leisure who had no idea as to what her husband earned except that it was “very substantial” and who “knows very little about investments and basically has never had to worry”.”

The chronology of events surrounding the sale of Hanover Terrace and the purchase of Cumberland Terrace appears from the documents extracted from the files of Lawrence Graham in Bundles E1 – E5. On or about 14^th February 2000, Mr Fielding asked Ian Caplan, then an associate in Lawrence Graham's commercial property department, with little or no experience of residential conveyancing, to assist him on the sale of Hanover Terrace. Mr Caplan had no contact whatsoever with Mrs Fielding (who he never met), receiving all of his instructions through Mr Fielding. A memorandum from Mr Fielding to Mr Caplan of 14^th February 2000 records that Mr Fielding would “make arrangements… for the charge to be released on Completion but the bank should not [underlined] be contacted now”. A note of a telephone conversation with Mr Fielding, prepared by Mr Herbert of RBS on the same day (within the bank’s files), reveals that RBS was prepared to allow up to about £1m to be released from the proceeds of sale of Hanover Terrace in order to allow Mr and Mrs Fielding to purchase a new property provided RBS obtained a first legal charge over it. A memorandum prepared by Mr Herbert of a meeting that he had with Mr Fielding at Lawrence Graham’s offices on 10^th March, and a later letter from Mr Herbert to Mr Fielding of 22^nd March 2000 (both in the bank’s files), show that (subject to the grant of a first legal charge over the new property) RBS was later prepared to allow up to £1.3m of the sale proceeds from Hanover Terrace to be used in the purchase of a new property and the carrying out of improvements to it.

Mr and Mrs Fielding were on holiday in the Far East from 18^th February until about 5^th March 2000 and Mr Fielding therefore drafted a memorandum (in Lawrence Graham's offices), and dated 16^th February, authorising Lawrence Graham “to sign the contract on Lawrence Graham's [sic: obviously he meant Mrs Fielding’s] behalf”. Mr Fielding signed one copy of this memorandum; and he arranged for a further copy to be signed by his wife, and to be faxed through to Mr Caplan, on the same day. Having discussed certain amendments to the draft contract with Mr Fielding on 3^rd March 2000, Mr Caplan effected exchange of contracts for the sale by Mrs Fielding of Hanover Terrace to Stephen and Janie Schaffer at a price of £3m at 6:25 p.m. on the same day, with a completion date of 23^rd June 2000.

Mr Caplan had very little involvement with the purchase of Cumberland Terrace, the file on which was maintained by Mr Fielding and kept in his office on a different floor of Lawrence Graham's offices at 190 Strand. On 13^th March 2000, Mr Fielding instructed Mr Caplan by e-mail to prepare an undertaking to Coutts & Co to remit to them £300,000 for his account out of the sale proceeds of Hanover Terrace on completion of the sale of that property on 23^rd June. The e-mail continued: “Whilst the redemption amount for RBS will not be known until nearer Completion, you may accept this as my confirmation that the figure is much below this amount.” Mr Caplan queried whether the undertaking was to be given on behalf of Mr Fielding or his wife as the property was in her name. Mr Fielding's response, on 14^th March 2000, was “on my behalf she has agreed that half is mine anyway!!!!” Mr Fielding prepared (in Lawrence Graham's offices) a letter from Mrs Fielding dated 13^th March 2000 on Hanover Terrace headed notepaper addressed to Lawrence Graham and marked for the attention of Ian Caplan. The letter, which was signed by Mrs Fielding and faxed through to Lawrence Graham, apparently on the morning of 14^th March, asked Lawrence Graham to accept the letter as her authority and request to give an undertaking or undertakings in respect of the sale proceeds of Hanover Terrace to Coutts & Co for up to £1.25 million. Richard Elphick, a corporate partner in Lawrence Graham, duly signed a letter addressed to Coutts & Co, dated 15^th March 2000, on behalf of the firm, confirming that contracts had been exchanged for the sale of Hanover Terrace at a price of £3 million, set to complete on 23^rd June 2000, and undertaking on completion to pay to Coutts & Co £300,000. Contracts for the purchase of Cumberland Terrace from Arab Bank Plc at a price of £677,500 were exchanged on 17^th March 2000, with a completion date of 18^th April 2000. It is clear from the file that amendments to the contract had been discussed and agreed by Mr Fielding, who also effected the exchange of contracts.

On 17^th March 2000, Mr Fielding wrote to Cluttons, as agents for the Crown (who were the landlords of Cumberland Terrace, as they were of Hanover Terrace), on Lawrence Graham’s headed notepaper, with regard to the proposed purchase of, and works of restoration and redecoration to, Cumberland Terrace. There were several references to Mrs Fielding as “our Client”. On 28^th March 2000, Coutts & Co wrote to Mr and Mrs Fielding at Hanover Terrace enclosing a letter of confirmation “regarding the facility of £1,000,000 which we shall make available to assist with the purchase and refurbishment of 29 Cumberland Terrace, pending the sale of 6 Hanover Terrace”. Mr and Mrs Fielding were both asked to kindly sign and return one copy of the enclosed Advice of Borrowing Terms. Although there is no copy signed by them in the trial bundles, I infer from the fact that Coutts & Co released the advance that they both did so. Under the heading “Security”, the Advice made it clear that Coutts & Co required “as security for the discharge on demand of all present and future liabilities (both actual and contingent) of the Borrowers to the Bank” (1) £1,255,000 on completion of the sale of Hanover Terrace, due on 23^rd June 2000, or, if the deposit was forfeited, payment of a sum of £150,000 and (2) a second legal mortgage by Mrs Fielding over Hanover Terrace in the bank's standard form.

On 29^th March 2000 Coutts & Co wrote to Mr Caplan. The letter was headed in the matter of the sale of Hanover Terrace and the purchase of Cumberland Terrace. It set out the revised documents that Coutts & Co required following revisions to the underlying borrowing arrangements since Lawrence Graham's letter of 15^th March 2000. These were threefold: (1) a fresh letter in identical format to that of 15^th March, but referring to the payment to the bank of £1,255,000 instead of £300,000; (2) a further undertaking relating to the title deeds and documents of Cumberland Terrace, which were simply to be held to the bank's order whilst the underlying borrowings were outstanding; and (3) a full legal mortgage over Hanover Terrace, to be obtained from Mrs Fielding, together with an occupier's consent from Mr Fielding. The mortgage was to be held by the bank unregistered for the time being, although the bank reserved its right to proceed to register it at any time at its sole discretion. The letter continued: “Please ensure that Mrs Fielding has the benefit of attending a solicitor of her own choice in order that any enquiries she may have concerning the legal nature of the document can be fully explained to her. We have no objection to that solicitor being at your firm provided that your firm is happy for another of your solicitors to act on her behalf.” Shortly thereafter, Mrs Fielding executed a legal mortgage of Hanover Terrace in favour of Coutts & Co. Her signature was witnessed by Deborah Simmons, who was apparently a banking associate at Lawrence Graham. Ms Simmons also witnessed Mrs Fielding’s execution of the transfer of Cumberland Terrace. Mr Caplan had no involvement in the execution of these documents.

On 31^st March 2000, Mr Fielding sent a fax, on Lawrence Graham’s headed notepaper, to DJ Freeman, who were acting for the Crown, regarding the licence to assign in respect of Cumberland Terrace. Mr Fielding explained that “my client, Mrs Sandra Estelle Fielding (who is my wife), is anxious to complete this transaction in the early part of next week, if at all possible”. This fax was copied to Cluttons and to the seller’s solicitors, but not to Mr Caplan. On the 3^rd April 2000, Mr Caplan sent a memorandum to Mr Fielding headed Hanover Terrace. He referred to a conversation between them on the 30^th March. He enclosed a copy of Coutts & Co's letter of 29^th March 2000 and asked Mr Fielding to confirm that the writer’s understanding of the agreement that he had reached with Coutts & Co was correct. He asked Mr Fielding to note the bank's concern that his wife “should have independent legal advice concerning the nature of the documents”, and he asked him to revert to Mr Caplan on this point. Mr Caplan recorded that Christine Jackson (who was the property partner who supervised Mr Caplan) was currently away on holiday, and Mr Caplan would therefore require confirmation from a partner that he could give the undertakings that Coutts & Co required. Mr Fielding responded by a memorandum dated 4^th April 2000 to which he attached (1) a revised undertaking to Coutts & Co, dated 3^rd April 2000, and signed on behalf of Lawrence Graham by Robert Field, a tax partner, undertaking to pay to Coutts & Co £1,255,000 on completion of the sale of Hanover Terrace; (2) an acknowledgment and undertaking in relation to the title deeds of Cumberland Terrace, also signed by Mr Field; and (3) the legal mortgage over Hanover Terrace executed by Mrs Fielding, together with an occupiers’ consent signed by Mr Fielding. The memorandum recorded that those documents that were required to be witnessed had been witnessed by Deborah Simmons. From an attendance note prepared by Mr Caplan, and dated 4^th April 2000, it is apparent that Mr Caplan had explained to Mr Field that he (Mr Caplan) did not know the level of the Fieldings’ borrowings in respect of Hanover Terrace, and so could not confirm that there would be £1,255,000 following the sale to pay to Coutts & Co. As a result, initially Mr Field had been unhappy with the form of the firm’s undertaking, and he had indicated that he would discuss this with Mr Fielding. The attendance note went on to record that Mr Caplan had later attended again upon Mr Field, who had stated that he had spoken to Martyn Gowar, the firm's senior partner, “who had signed off the matter, and therefore the undertaking could be given”. Mr Caplan duly sent the required documents to Coutts & Co on 4^th April 2000.

Within RBS’s files there is a Mortgage Valuation dated 3^rd April 2000, and prepared by Edwin Evans Surveyors Ltd for Coutts & Co, valuing Cumberland Terrace, in its present condition, at £677,500. An attached sheet of paper included a section headed “Condition and Proposed Improvements”. This stated: “The property has a dated and unattractive interior. Mr & Mrs Fielding propose extensive improvements which will bring the property up to good modern standards. Gross expenditure may amount to £400,000 although this will include carpets and curtains. Assuming that all works are completed to high modern standards, we consider that the leasehold interest in the property, subject to the leaseholder’s ability to extend the lease in exchange for a reasonable premium, will be worth in the region of £1,200,000. This assessment is made according to today’s market conditions.”

Mrs Fielding's purchase of Cumberland Terrace completed on 6^th April 2000. Completion was handled by Mr Fielding. On 7^th April 2000, Mr Fielding sent a memorandum to Mr Caplan, informing him that the Cumberland Terrace matter had now been completed, and enclosing the various documents that had been handed over on completion. Mr Fielding stated that he would place Mr Caplan in funds for the stamp duty at the latest moment, which he calculated to be 3^rd May, and he asked him to ensure that priority was maintained to cover that period.

Thereafter, little happened on the conveyancing front until shortly before the date scheduled for the completion of the sale of Hanover Terrace. On 16^th May, Mr Caplan sent a memorandum to Mr Fielding requesting details of the apportionments required to enable him to prepare a completion statement. He added: “I have still to contact the Bank to obtain a redemption figure and also to obtain the title deeds and ask them for a form DS1. Please will you let me have a contact name and address so that I can do this.” Mr Fielding replied on 17^th May 2000 stating that he was “negotiating the final redemption figure with the bank and will be obtaining from them the title deeds and an executed form DS1 to be released against our undertaking to account to them for the agreed sum. It will take some 2-3 weeks for the final amount to be settled, so I suggest you just prepare a DS1 and I will revert to you about two weeks before completion with details of who to write to.” On 5^th June 2000, Mr Caplan wrote to Mr Fielding stating that he was keen to get the title deeds back as soon as possible, and asking him to let Mr Caplan have the contact name and address of the bank. Mr Caplan recorded, on 12^th June 2000, that Mr Fielding was still negotiating with the bank: “He knows that time is now tight for return of the title deeds.”

On 19^th June 2000, Mr Fielding explained to Mr Caplan that RBS had instructed its own solicitor, and Mr Fielding would give Mr Caplan her name when he received the details. Mr Fielding “wished to discuss the question of undertaking and a substitute charge over the new property at Cumberland Terrace”. On the same day, Mr Fielding sent an e-mail to Mr Caplan, stating that he had no problem with Mr Caplan paying the agents’ fees. “As to the numbers - £1.3m will be remitted to Coutts and I will keep you posted over the next 48 hours as to how much is to be remitted to RBS after payment of agents’ fees. In the meantime I will let you have back tomorrow the transfer and application for licence to assign duly signed by my wife and will be letting you know who at RBS will be contacting you in connection with the DS1, the charge certificate and the lease and the related undertaking to RBS.” Mr Caplan's attendance note of 20^th June 2000 records that Mr Fielding had spoken with RBS, which had “requested the full repayment of the existing loan and the new loan to be taken out. This is not acceptable to Michael Fielding. The negotiations are ongoing. He stated that I should expect a phone call from the Royal Bank of Scotland.” A file note dated 19^th June 2000, in the bank’s files, records a telephone conversation between Mr Hunter (the successor to Mr Herbert at RBS) and Mr Fielding. During the discussion, the latter “advised that while Lawrence Graham had acted with regard to the purchase of 29 Cumberland Terrace, Mrs Fielding would in fact be obtaining independent legal advice from separate solicitors. MF went on to advise that whilst the partners of Lawrence Graham were aware of his overall situation, they were not aware of the specifics relating to his exposure to the Bank and specifically did not wish this to be disclosed as part of the legal process.” Mr Fielding went on to advise that he expected the bank’s share of the sale proceeds of £1.7m to be used in direct reduction of Mr and Mrs Fielding's joint liabilities; and that he “did not wish Mrs Fielding to continue to be liable for her joint liabilities to the existing level whilst the funds received were used to reduce existing sole liabilities of Michael Fielding.” Mr Hunter gave no commitment in this regard, indicating that he had requested RBS’s solicitors (the firm of Ralph Hume Garry) to provide RBS with legal advice as to how the funds should be utilised.

On 20^th June 2000, RBS wrote to Lawrence Graham stating that the bank was proposing to take a legal charge over Cumberland Terrace from Mrs Fielding to secure a £1,300,000 overdraft facility being made available to Mr and Mrs Fielding. The letter asked “if a partner in the firm who is not acting on behalf of the Mortgagor will act on behalf of the bank in the constitution of a first priority Legal Charge in our favour. It is normally our policy to instruct independent Solicitors to act on behalf of the Bank in such transactions but in this case would be happy for you to act on our behalf subject to your confirmation that you will act independently of the solicitor acting for the customer and that this will not cause your firm a conflict of interest… The Bank requires Mrs Fielding to be independently advised on the content and effect of the Bank's Legal Charge and proposed overdraft facility by a firm of solicitors in which Mr Fielding is not a partner. The solicitor acting should complete the Legal Advice clause appended to the Legal Charge as evidence of this being done.” On the following day, Mr Caplan duly acknowledged receipt of RBS's letter and its enclosures by completing, signing and returning to RBS the attached duplicate copy. He also sent a memorandum to Mr Fielding, referring to RBS’s requirement for his wife to be independently advised on the content and effect of the bank's legal charge and proposed overdraft facility by a firm other than Lawrence Graham, and asking him to let Mr Caplan know who would be carrying this out.

By the end of 22^nd June 2000 the proposal for RBS to provide a £1,300,000 overdraft facility on the security of Cumberland Terrace had been abandoned (although an internal RBS email from Mr Hunter of 23^rd June 2000 indicates that he viewed this transaction as merely “on hold” and as one that was “likely to resurrect itself in a month or so”). For Lawrence Graham, Miss Carr submits that documents on the bank’s files demonstrate that this was because a valuation of Cumberland Terrace, prepared for RBS, had failed to satisfy it as to the adequacy of its proposed security. Certainly this was part of the reason; but there may have been other factors at play. The first intimation of a potential problem in this regard appears in a file note, prepared by Mr Hunter, in which he recorded that Mr Fielding had telephoned him on 13^th June 2000 “to advise that there was a hitch with regard to the valuation” of Cumberland Terrace: the ongoing building works would not be completed until some time in mid-July and, whilst Mr Fielding was confident that, in due course, the property would be valued at £1.3m, as a result of the delay in completing the building works, he did not believe that the valuer could conduct a satisfactory valuation at that time. (In the course of the conversation, Mr Fielding intimated that Lawrence Graham had already provided an undertaking to repay a £1.3m bridging loan to Coutts & Co on the sale of Hanover Terrace, as to which Mr Hunter commented: “It remains unclear how LG could do this on the basis that the property is currently charged to RBS.”) From an e-mail to Mr Ballard (Mr Hunter’s superior) on the bank’s files, and timed at 4.39pm on 22^nd June 2000, it is clear that when Savills came to value Cumberland Terrace for RBS, they noted a discrepancy between their own floor areas (confirmed by the selling agent) and those that had been reported in the valuation report that had been obtained earlier by Coutts & Co; and Savills valued Cumberland Terrace at only £650,000 (in its then part-completed state) and £725,000 (when completed, and “assuming a very high specification fit out”). However, the low valuation may not have been the only problem: it is clear from documents on the bank’s files that RBS also required (1) evidence by way of receipts, etc that all, or substantially all, of the £1.3m that had been drawn from Coutts & Co had been spent on the purchase and development of Cumberland Terrace; and (2) that the solicitors who were to give independent legal advice to Mrs Fielding in connection with the first legal charge that was to be executed by her in favour of RBS over Cumberland Terrace should also receive a schedule detailing all of Mr and Mrs Fielding’s joint and several indebtedness to the bank, and the security which it held in respect of the same. Since it appears to be common ground between the parties that, in April 2000, some £225,000 from the Coutts & Co bridging loan had been paid to one of Mr and Mrs Fielding’s sons and his wife, Mr Fielding is likely to have experienced some difficulty in complying with the first of these requirements; whilst, in the absence of direct evidence from Mr Fielding, it is pure speculation as to how he would have viewed the second of these requirements.

On 22nd June 2000, RBS wrote to Mr Caplan, referring to their telephone conversations of that day with Peter Ballard, the head of the corporate recovery unit within the bank’s SLS division, and enclosing the bank's standard instruction letter in connection with the redemption of its mortgage on the sale of Hanover Terrace, together with an undertaking relating to the sale proceeds. The letter continued: “When completing the undertaking, can you ensure that the details are completed to reflect the agreed financial arrangements, i.e. the sale price is £3 million gross, with disbursements totalling £490,000 leaving net sale proceeds of £2,510,000 to be remitted to the Bank. (Disbursements consist of £440,000 to Coutts for the account of Mr and Mrs Fielding and £50,000 Agents fees.)” For the latter two figures, there have been substituted in manuscript, apparently in Mr Caplan's hand, the true sums of £372,000 and £118,000 respectively. From a string of e-mails on the bank’s files on the morning of 22^nd June 2000, it would appear that the initial agreement between Mr Fielding and RBS had been that only £300,000 should go to Coutts & Co, but that Mr Ballard had then agreed to increase this sum to £440,000, commenting: “Chipped again (wot a sucker I am)…” In re-examination (Day 4, pp 163-5), Mr Ballard explained that he had “made this comment because he believed it was typical of Fielding to change the deal as it went along”; and that he had been happier to take £2.51 million in reduction of RBS's indebtedness than to receive £1.7 million and take a charge for the balance over Cumberland Terrace. In cross-examination (Day 4, p 113), Mr Ballard accepted the proposition that, if there had not been any refurbishment works going on to Cumberland Terrace, he would not have agreed to any money being paid over to Coutts & Co; rather, he would have wanted the whole of the net sale proceeds of Hanover Terrace (after agents’ fees) to be paid over to RBS.

With the withdrawal of RBS as a potential mortgagee of Cumberland Terrace, it was necessary for Mr Fielding to find an alternative source for the repayment of Coutts & Co’s bridging loan. On 22^nd June 2000, a firm of solicitors, Kanter Jules, wrote to Mr Fielding, at Lawrence Graham's offices, stating that their client would agree to assist by providing a maximum amount of £677,500 in return for various undertakings and documents, including a transfer of Cumberland Terrace from Mrs Fielding to an unnamed transferee at a recited consideration of £677,500, and a letter from Lawrence Graham containing confirmation that it had the authority of Mrs Fielding, as their client, to write such a letter, and giving an unconditional and irrevocable authority to Kanter Jules to complete the name of the transferee in accordance with their client's instructions, and to date and complete the transfer at any time. Appropriate letters, dated 22^nd June 2000, were drafted by Lawrence Graham and signed by Nicholas Turner, as a partner in Lawrence Graham, and then sent to Kanter Jules. Two letters dated 22^nd June 2000, written on Hanover Terrace notepaper and addressed to Lawrence Graham, for the attention of Mr Caplan, were drafted, apparently at Lawrence Graham's offices by Mr Fielding, and were signed by his wife. One referred to Kanter Jules’s letter of 22^nd June, and authorised Lawrence Graham to give all the undertakings, and the unconditional and irrevocable authority, referred to therein. The other letter authorised Lawrence Graham to issue their letter dated 22^nd June to Kanter Jules. Mrs Fielding executed a transfer of Cumberland Terrace to an unnamed transferee in the presence of one of Mr Fielding's two part-time secretaries. The consideration recited therein was £927,500. This no doubt reflected the additional £250,000 that (as will appear) was to be received from J. Hassan and Partners; but there is nothing in the documentation to suggest that this increased consideration was drawn to Mrs Fielding's attention.

An attendance note, dated 22^nd June 2000, and prepared by Mr Caplan, records that Mr Fielding had explained to him that the following moneys were being provided: “The Royal Bank indebtedness is £2,510,000. This leaves a surplus of £490,000 from the sale price. Kanter Jules’ client is providing £677,500. A trust company in Gibraltar is providing £250,000. This totals £1,417,500. From this the agents must be paid £118,125 (being Aston Chase’s invoice of £88,125 and J. J. Agencies’ fees of £30,000). The undertaking to Coutts & Co is for £1,255,000. Michael Fielding instructed me that the balance should also be paid to Coutts & Co.” Mr Caplan then went through the terms of the letter from Kanter Jules and their requirements for undertakings. He then recorded that he had attended upon Michael Fielding and Nick Turner, who had then signed the undertaking to Kanter Jules.

The sale of Hanover Terrace completed on 23^rd June 2000. In addition to the balance of the purchase price, Lawrence Graham received £250,000 from J. Hassan and Partners, and £677,500 from Kanter Jules. From these moneys, RBS was paid £2,510,000, and Coutts & Co were paid £1,255,000, thereby discharging Lawrence Graham from their undertaking. In a letter written to Mr Grover of Coutts & Co, in anticipation of completion, on 22^nd June 2000 (and copied to Mr Caplan), Mr Fielding instructed Coutts & Co to apply this sum, as to £1.135 million, in elimination of the bridging loan; as to £25,000, to his deposit account; and as to the remainder, to the credit of his current account. The agents received £118,125. The balance of £46,386.58 was later transferred to Mr Fielding's account at Coutts & Co. In a memorandum of a meeting with Mr Fielding on 25^th July 2000 (in the bank’s files), Mr Hunter recorded that it remained Mr Fielding’s wish that RBS should “refinance the Bridging Loan provided by the Trust”. Mr Hunter indicated that, whilst this remained feasible, in addition to a valuation of Cumberland Terrace from Savills at a satisfactory level, the Bank would also require receipt of certain commissions that were said to be due to Mr Fielding from two property transactions, together with satisfactory information with regard to certain ongoing litigation involving Mr Fielding, and relating to companies within the Minerva group.

Since I have not had the benefit of hearing from Mrs Fielding herself, it is appropriate at this point that I should refer to what was said on her behalf during the course of the RBS action. In the course of his closing speech, on Day 9 of the RBS action, Mr Kaye QC, appearing for Mrs Fielding, submitted that the evidence showed “that on the sale of Hanover Terrace the mechanism of the sale was entrusted to Michael Fielding by [Mrs Fielding] who instructed Lawrence Graham. Lawrence Graham were instructed to deal with the conveyancing, nothing more and nothing less. They did not settle the account with the bank, Michael Fielding did and he alone handled the negotiations with the bank and instructed Lawrence Graham accordingly”: transcript, p 78. Mr Kaye returned to this theme at p 82 of the transcript: “What Lawrence Graham is concerned with is solely the conveyancing, not the amount owed to the bank. They clearly left that to Mr Fielding. He dealt with that alone.” For the claimant, Mr Livesey urged me not take these observations out of their true context, which was a re-amendment made to RBS’s claim during the course of the trial to plead a settled account as between Mrs Fielding and RBS. All that Mr Kaye was submitting, on behalf of Mrs Fielding, was that Lawrence Graham had no authority from her to settle a disputed account. He was not addressing the nature and extent of any duties owed by Lawrence Graham to Mrs Fielding, in pursuance of their obligations as her conveyancing solicitors.

Before the trial began on Tuesday 15^th July 2008, I had received a written skeleton argument dated 9^th July 2008 (with a chronology, dramatis personae and definitions) from the claimant, and a written skeleton argument dated 10^th July 2008 (with a chronology, dramatis personae, and schedules outlining Hart J’s findings on authority and on causation-related issues) from the defendants. I had also undertaken one day’s pre-reading. The trial bundles extended to some 33 lever-arch files. Each evening, a transcript was provided of that day’s proceedings.

The morning of the first day of the trial was taken up with an application by RBS, represented by Mr Gerard van Tonder of counsel, to set aside or vary a witness summons that had been served by Lawrence Graham upon Mr Peter Ballard, the head of the corporate recovery unit within RBS’s SLS division and one of the claimant’s witnesses, on Friday 11^th July 2008, requiring him to produce various classes of documents from RBS’s files at the trial of this claim. For the reasons given in my first (and only) interim ruling, delivered late on the morning of Tuesday 15^th July, I adjourned the application until 10.30am on the morning of Thursday 17^th July, on the basis that RBS would continue its search for documents within the categories set out in the witness summons, but restricted to a narrower time-frame than that stipulated therein, namely the period between January 2000 and June 2001. This search produced very few additional documents. By the time that Mr van Tonder returned on the Thursday morning, Lawrence Graham had declared themselves to be content that no further searches should be undertaken by RBS; and, by agreement, Mr Ballard (and RBS) were released from the production of further documentation pursuant to the witness summons.

As a result of this brief diversion, the trial effectively began after lunch on Tuesday 15^th July. Mr Livesey opened the claimant’s case for the whole of that afternoon and for half the following morning; and the remainder of the Wednesday morning was taken up with Miss Carr’s opening. The claimant’s oral evidence began on the afternoon of Day 2. Over the following four court days, I heard from a succession of witnesses from RBS, as follows: (1) William Radcliffe, who, as a relationship manager within the bank’s SLS division, was responsible for the day-to-day management of what was known within RBS as “the Grangewoods’ connection” (and thus for Mr and Mrs Fielding's accounts with RBS) from early 1994 to about 21^st January 2000 (the afternoon of Day 2, and an hour on the morning of Day 3); (2) Sean Herbert, who succeeded to the role of Mr Radcliffe, and was responsible for the Grangewoods’ connection from 22^nd January to about 8^th June 2000 (about an hour before, and a couple of hours after, lunch on Day 3); (3) Graeme Hunter, who succeeded to the role of Mr Herbert, and was responsible for the Grangewoods’ connection from about 13^th June to October 2000 (about 20 minutes on the afternoon of Day 3, and a little over 1 ½ hours on the morning of Day 4); (4) Peter Ballard, who took over from Phil Louden as the head of the corporate recovery unit within the bank's SLS division in May 1999 and who thereafter was the person to whom Messrs Radcliffe, Herbert and Hunter reported until October 2000, when the responsibility for the Grangewoods’ connection was transferred to Sally-Anne Fisher and Sandy Wilson within the SLS’s recoveries & litigation unit (about an hour before lunch on, and the afternoon of, Day 4); (5) Derek Sach, the managing director of the bank's SLS division, and the person to whom Mr Ballard reported (the morning of, and about half an hour after lunch on, Day 5); and (6) Sandy Wilson, formerly the head of SLS’s recoveries and litigation unit (the remainder of the afternoon of Day 5, and about an hour on the morning of Day 6). Whereas the statements of the other witnesses had been prepared for the purposes of this trial, the witness statements of Mr Wilson and Mr Sach, dated 27^th March and 2^nd April 2008 respectively, had been prepared, not for the purposes of the trial itself, but rather for the purposes of the interim hearing before Mr Sher QC.

I did not hear any evidence from Mr Peter Garry, formerly of Ralph Hume Garry, and now a member of Cripps Harries Hall LLP, the claimant’s solicitors, who had been advising RBS in relation to the Grangewoods’ connection, and the liabilities of Mr and Mrs Fielding, since at least 1997, and who, as RBS accepts, would have been the solicitor to whom it would have turned for legal advice in that regard in 2000. I did not hear any evidence from Mr Fielding; nor did I hear any live evidence from Mrs Fielding, or see any written evidence from her directed specifically to the present litigation.

For a little over three hours on the remainder of Day 6 I heard from Mr Caplan, who was the only witness called by Lawrence Graham. Although a short witness statement had been served from Bill Richards, who was Lawrence Graham's managing partner from September 1995 to April 2002, and thereafter its senior partner until January 2008, and who is currently Lawrence Graham's Head of Risk and Compliance, this was not tendered in evidence before me. I did not hear from any of the partners in Lawrence Graham - Richard Elphick, Robert Field, Martyn Gowar, or Nick Turner - who had given, or had authorised the giving of, undertakings in relation to Hanover Terrace and Cumberland Terrace on behalf of Lawrence Graham. Nor did I hear from Deborah Simmons, who had witnessed Mrs Fielding execute the documentation required to complete the purchase of Cumberland Terrace in April 2000; or from the witness to Mrs Fielding's execution of the onward transfer of Cumberland Terrace to an unnamed transferee.

The court did not sit on the morning of Day 7 in order to enable counsel to prepare their closing submissions. I duly received written closing submissions from the claimant; and Mr Livesey addressed me orally on the afternoon of Day 7 and until about 3.15pm on the afternoon of Day 8. I duly received written closing submissions, with various schedules and annexures, from the defendants; and Miss Carr addressed me for the remainder of Day 8 and on Day 9, assisted by Mr Hubble, who addressed me on the correct approach in law to the issue of what Mrs Fielding would have done had she become aware of the full extent of her indebtedness to RBS and/or the nature of the security that had been created over Cumberland Terrace upon the completion of the sale of Hanover Terrace in June 2000. The court then adjourned at 4 p.m. on Day 9 (Friday 25^th July) - the last scheduled day of my London sittings - and resumed on the morning of Tuesday 29^th July (Day 10), when Mr Livesey produced the claimant’s written submissions in reply and proceeded to address me for the whole of that morning. The trial concluded at lunchtime on that day, when I reserved judgment. I subsequently received further submissions in reply by e-mail on 31^st July (from Mr Eaton Turner, for the claimant) and on 1^st August 2008 (from Mr Hubble, for Lawrence Graham) directed to Lawrence Graham's submission that Mrs Fielding's loss had been caused by her own contributory negligence.

Without intending any disrespect to the parties’ advocates, I do not propose, in this judgment, to reproduce their submissions in full. This is a consequence of the need to keep this judgment to manageable proportions in the time available to me; and, in any event, the parties’ full submissions are recorded in the documents that were presented to the court, and in the daily transcripts. This is in no way an indication that those written and oral submissions were unhelpful, or that I have failed to bear them in mind. On the contrary, the advocates’ submissions, both written and oral, could not have been more comprehensive, or of greater assistance to me. Should this matter go further, the parties’ arguments will appear with admirable clarity in the advocates’ respective written submissions, and in the written transcripts, which are available to the parties and to any appeal court. It is necessary, however, that I should briefly outline the parties’ opposing cases.

For the claimant, Mr Livesey submits that, cleared of distractions, and underlying the unusual facts of the instant case, this is a thoroughly orthodox professional negligence claim in which the ordinary issues of the scope of duty, breach of duty, causation and loss - in this case, the loss of the chance of avoiding a pre-existing liability - appear in their traditional form. The claimant puts her case on liability in two ways: first, that Mr Fielding was at all material times acting as a solicitor, conducting with Mr Caplan the conveyancing transactions within the scope of his authority as a partner of Lawrence Graham, which is therefore vicariously liable for his breaches of duty; and, secondly, that Mr Caplan also owed duties to Mrs Fielding as his client. It is said that Mr Fielding's financial interests were peculiarly in conflict with those of his wife, and that he took advantage of his position to advance his own personal interests at the expense of hers. It is said that Mr Caplan failed to establish the nature and extent of the potential conflict between the interests of Mr and Mrs Fielding, and failed to guard her against the conflicting interests of her husband. In particular, it is said that Mr Caplan failed to ensure that the financial consequences and implications of the various steps in the conveyancing procedures were properly explained to Mrs Fielding. As a result, Mrs Fielding failed to appreciate that her husband was “juggling” the sale proceeds of Hanover Terrace; that £2.51 million from the sale proceeds was being paid to RBS; that, even after such payment, she would remain indebted to RBS in the sum of approximately £3 million; that, of the balance of £490,000, some £371,875 was being paid to Coutts & Co, with part being applied to Mr Fielding's personal accounts; and that, even after the completion of the sale of Hanover Terrace, she would have no equity in Cumberland Terrace, the purchase and refurbishment whereof would remain the subject of short-term bridging finance, secured by a charge in favour of offshore lenders, making her continued occupation thereof entirely precarious.

The claimant’s case on loss and damage is advanced in each of two ways: First, and primarily, it is contended that, had Lawrence Graham brought the true position home to Mrs Fielding, on or around 22^nd June 2000, she would have entered into negotiations with RBS, disputing her liability to pay any sum in excess of £510,000; and that this would have resulted in RBS releasing Mrs Fielding from up to £3 million of her remaining indebtedness. Secondly, and alternatively, it is contended that, had Lawrence Graham brought the true position home to Mrs Fielding before exchange of contracts on the purchase of Cumberland Terrace on 17^th March 2000, she would not have proceeded with the purchase of that, or any alternative, property, and in consequence, on the completion of the sale of Hanover Terrace, she would have received the sum of £371,875 which was paid over to Coutts & Co from the balance of the sale proceeds not retained by RBS; and that she has therefore suffered loss and damage in that amount. In closing, Mr Livesey acknowledged, correctly, that his case was at its strongest on liability as at 22^nd June 2000. Other formulations of the damages claim were abandoned.

Lawrence Graham denies that it owed, or breached, the duties upon which the claim is premised. It is said that Mr Fielding was not acting as his wife's solicitor, but rather as her husband and agent for the purpose of providing Lawrence Graham with instructions; that Lawrence Graham was retained for the limited purposes of effecting the formal conveyancing steps required in relation to the sale of Hanover Terrace, and dealing with the sale proceeds in accordance with Mrs Fielding’s instructions, and, as regards the purchase of Cumberland Terrace, solely in relation to the provision of the undertaking in favour of Kanter Jules, and not on any more general basis, and so owed Mrs Fielding no duty to advise her as to the financial consequences and implications of the various steps in the conveyancing procedures; and that, in any event, no reasonably competent conveyancing practitioner retained on the more general basis contended for by the claimant, and acting with reasonable skill and care, would have acted or behaved in the manner now contended for by the claimant.

Lawrence Graham also denies the loss and damage allegedly sustained by Mrs Fielding, and their responsibility for the same. In particular, Lawrence Graham deny (1) as a matter of factual causation, that had they acted in the manner in which it is alleged they should, that Mrs Fielding would have acted in the manner for which the claimant contends; (2) as a matter of legal causation, that the loss and damage for which it is sought to make Lawrence Graham liable is to be regarded in law as having been caused by any breach by them of their duties to Mrs Fielding; (3) that they owed any duty to guard against the loss and damage said to have been sustained by Mrs Fielding, which is outside the scope of any duties owed to her; and (4) that the loss and damage for which it is sought to make Lawrence Graham liable were the reasonably foreseeable consequence of any breach of duty, which are too remote in any event.

For Lawrence Graham, it was submitted, in closing, that this claim is devoid of any proper factual foundation. The claimant’s case on causation fails for lack of proof. It is a construct of lawyers, which proceeds without the very evidence that it most requires, namely that of Mrs Fielding. The court should not embark upon a process of speculation, based upon background facts and evidence given in other litigation. Even if the court were so to embark, the claimant cannot hope to establish what Mrs Fielding would have done, at the various stages of the causation analysis, on the balance of probabilities. Instead of evidence from Mrs Fielding, the claimant has presented the court with a succession of RBS witnesses, who can only speak to the final link in the chain, namely, what RBS might allegedly have done had Mrs Fielding both challenged RBS and then initiated settlement proposals. That evidence was both self-serving and infected by hindsight. The reality, on exploration in evidence, is that RBS would not have contemplated a settlement on the facts as they would have emerged. The court ought not to place any weight on RBS's assertions that it might have agreed a settlement if proposed by Mrs Fielding. RBS's actions (in pursuing Mrs Fielding to bankruptcy and thereafter) tell a different story. On a proper analysis, there is no claim here for a lost opportunity because the very challenge, which the claimant contends Mrs Fielding would have brought, was in fact brought unsuccessfully in the RBS action. If it is said that a window of opportunity for settlement was lost, any loss arising from that cannot be said to fall within the scope of any duty owed by Lawrence Graham when it is said to flow, not from any act or omission of Lawrence Graham, but from the change in RBS's attitude to Mr Fielding, following on from the discovery that he was a thief. In any event, the claimant’s case on the scope of Lawrence Graham's retainer is flatly at odds with that advanced by Mrs Fielding herself in the RBS action. Lawrence Graham were entitled to act in the manner in which they did, consequent upon the written instructions received from Mrs Fielding, and in the light of her husband's status as her agent.

At this point, it is appropriate for me to comment upon the various witnesses who did give evidence before me, and the evidence that they gave. For the claimant, Mr Livesey reminds me that Mr Fielding was a larger-than-life character, who had succeeded in stringing those from RBS who had had dealings with him along, and pulling the wool over their eyes, for over 7 years. It was only the discovery, in June 2001, that Mr Fielding had stolen substantial sums from Lawrence Graham’s client accounts, and had fled to Florida, that led RBS fundamentally to reassess its perceptions of, and dealings with, Mr Fielding. The belated, and unwelcome, discovery that they had been duped consistently by Mr Fielding over very many years has inevitably led those at RBS who had had dealings with him to seek to downplay the extent to which they had been taken in by him, and, to varying degrees, to accede to Miss Carr’s invitations to acknowledge that they had had doubts, and reservations, about Mr Fielding at the time. For her part, Miss Carr submits that all of the RBS witnesses suffered from the handicap that their evidence was given with hindsight, and many years after the event; it was self-serving; and it had been prepared with heavy input from the solicitors acting for RBS and for the claimant. I bear all of these factors in mind; and I acknowledge the weight that should be attached to the contemporaneous documentation as a guide to the contemporaneous perceptions of the RBS witnesses.

I derive little, if any, assistance from the evidence of Mr Radcliffe. I consider that he was consistently strung along by Mr Fielding; but he had no involvement with the Grangewoods’ connection after 21^st January 2000 and thus would have had no part to play in the hypothetical scenario which I must consider. In paragraph 6 of his witness statement, dated 4^th July 2008, Mr Radcliffe records that, after discovering that Hanover Terrace was in fact registered in Mrs Fielding’s sole name, and after consultation with the bank’s solicitors, in January 1996 he became concerned about whether or not the charge over Hanover Terrace would be enforceable, since there was nothing to suggest that Mrs Fielding had received independent advice in relation to it, and it had been witnessed by Mr Begner, one of Mr Fielding's then partners. RBS has not waived privilege in relation to the legal advice which it received; and the first documented reference to any concern about the potential validity of the bank’s charge over Hanover Terrace does not appear until 31^st August 1999 when, in an update to a report for the bank's problem exposures committee, it was reported that a sale of Hanover Terrace for £3 million, with £2 million being used as debt reduction and £1 million being released to enable the Fieldings to purchase a new property, over which the bank would take a charge, would be “advantageous to the bank as our current Charge is in Fielding's wife's name and could prove difficult to enforce”. In none of his lengthy discussions with RBS does Mr Fielding ever appear to have sought to suggest that his wife might have some leverage over the bank in terms of the enforceability of its legal charge over Hanover Terrace. Whilst it is clear that, by the end of August 1999, RBS appreciated that it might prove difficult to enforce its charge over Hanover Terrace, it has not been proved to my satisfaction that this was, or would have been, a significant factor in the bank’s thinking, either then or later. Indeed, it was Mr Sach’s evidence (Day 5, p 42) that he was not even aware that RBS had at any time had any concern about the validity of the charge before June 2001; and he later accepted (Day 5, pp 75-6) that, had the risk of the charge’s unenforceability been the only impediment, that, by itself, would probably not have given Mrs Fielding much of a negotiating hand.

Mr Herbert was a much more impressive banker and witness than Mr Radcliffe: Mr Ballard described him as “being quite tenacious” (Day 4, p 105). Brought in to exert pressure on Mr Fielding, Mr Herbert clearly developed a healthy scepticism, and suspicion, of Mr Fielding and his persistent, but unfulfilled, promises of progress in reducing the extent of his indebtedness to RBS. The contemporaneous documentation tells its own story: (1) In a note of a telephone conversation with Mr Fielding on 18^th February 2000, Mr Herbert records that he had spoken to a Jewish colleague to question whether (as he had been told by Mr Fielding) Tuesday was indeed perceived by those of the Jewish faith as a propitious day for signing contracts (for the sale of Hanover Terrace) only to receive the response that “this was not the case and indeed the lucky days were generally regarded to be Monday and Thursday”. (2) In a note of a meeting with Mr Fielding on 10^th March 2000, Mr Herbert recorded that Mr Fielding had denied having any other creditors,; and Mr Herbert commented: “I know that this is a lie as there is a Guarantee liability in respect of the Woolwich Building Society which amounts to £150K.” (In passing, I note that Mr Herbert also recorded that “MF has been advised that he could declare himself bankrupt and allow the Fielding Trust to pursue the Garrard claim; however, that is not the way he would like to do things. In such a circumstance the Bank would be left high and dry unless we could prove that the Fielding's Trust interest in the Minerva claim was a preference from Fielding.”) (3) In a note of a telephone conversation with Mr Fielding on 18^th April 2000, Mr Herbert referred to Mr Fielding's explanations for his delay in fully responding to the bank’s requests for documentation and information contained in a letter of 22^nd March as the “usual excuses”. I am satisfied that the contemporaneous documentation emanating from Mr Herbert amply supports his oral evidence that it was his perception at the time that Mr Fielding was not delivering, and that he did not always tell RBS the truth.

In paragraph 19 of his witness statement, dated 3^rd July 2008, Mr Herbert had referred to a letter from Mr Fielding to himself of 10^th May 2000 in which Mr Fielding had purported to report on the progress of legal proceedings that had been issued in September 1998 against a wealthy individual, David Garrard, alleging Mr Fielding's beneficial entitlement to a valuable tranche of shares in the holding company for the Minerva Group. (I put out of my mind the fact, only discovered later, that Mr Fielding had formally abandoned this claim shortly after the issue of the Writ; and that, since October 1998, he had been persistently, and deliberately, deceiving RBS into thinking that this litigation was still ongoing - even to the extent of producing a forged acknowledgment of service form - and would provide a source for the repayment of his indebtedness to RBS.) In his witness statement, Mr Herbert, had then gone on to state that: “At the time, I had no reason to believe that the information being provided to me by Mr Fielding was false.” In the course of cross-examination by Miss Carr (on the afternoon of Day 3, at pp 86-90) Mr Herbert accepted that this statement was not correct; and that the true position had been that he had had “grave reservations” as to the truth of the information being provided to him by Mr Fielding. However, I must also bear in mind that Mr Herbert left the bank's SLS division in the second week of June 2000 (his last documented involvement is on 9^th June); and that Mr Herbert had therefore passed out of the picture, and Mr Hunter had entered upon the scene, by 13^th June 2000.

Mr Hunter only had a fleeting involvement with Mr Fielding. His file note of a telephone conversation with Mr Fielding on 13^th June 2000 includes the comment that it “remains unclear” how Lawrence Graham could have given an undertaking to repay the Coutts & Co bridging loan of £1.3 million from the sale proceeds of Hanover Terrace when that property was currently (and more than fully) charged to RBS. In cross-examination (on the morning of Day 4 at pp 19-25), Mr Herbert accepted that, at the time of his meeting with Mr Fielding on 25^th July 2000, he had not then had that many dealings with Mr Fielding, and that it was still difficult for him to have any confidence in expressing an opinion about him. The documentation generated by Mr Hunter, immediately before the completion of the sale of Hanover Terrace, indicates a cautious, and careful, approach on his part, requiring, for example, Mrs Fielding to obtain independent legal advice from separate solicitors, and evidence by way of receipts that all, or substantially all, of the funds drawn from Coutts & Co had been spent on Cumberland Terrace. In cross-examination (on Day 4, p 39) Mr Hunter indicated that there would have been “a degree of scepticism” had Mrs Fielding challenged her liability to the bank. However, it is apparent from Mr Hunter’s e-mail of 21^st June to John Churchouse of Savills that Mr Hunter was not in the office on 22^nd June (although an e-mail timed at 3.26pm on 23^rd June 2000 indicates that he was back in the office by that time). Thus, it is clear that any issues arising on 22^nd June would have been raised first of all with Mr Ballard.

Even before June 2000, Mr Ballard had been highly sceptical about the value of Mr Fielding’s claim to shares in Minerva (although he indicated that he could not exclude it from his mind, and he would not have done anything that would have prejudiced it); and he was also distrustful of Mr Fielding's word. I accept Mr Ballard's evidence that, had Mrs Fielding (or Mr Fielding on her behalf) approached him after she had ascertained the true level of her indebtedness to the bank, his approach (acting in conjunction with Mr Hunter if, and when, he was available) would have been to achieve a significant reduction in the Fieldings’ indebtedness to the bank on their joint account; and that, at least initially, he would have resisted any attempt by Mrs Fielding to negotiate a release from her liability. In cross-examination (at Day 4, p 116) Mr Ballard accepted that his immediate reaction would have been “to simply disbelieve what she was saying and to resist it with full force”. It was clear from Mr Ballard's evidence that his ultimate response to any assertion by Mrs Fielding that she was not liable for the Fieldings’ joint debts would have been heavily dependent upon factors such as: (1) the advice that he would have received at the time from Mr Garry and (2) the precise terms of his discussions with Mr Fielding. In particular, he would have questioned Mr Fielding as to why his wife was claiming that she was not liable on the joint account: see Day 4, pp 171-5 and 180-1, and particularly the evidence at 172-3 that it was “difficult to hypothesise as to what [Mr Fielding’s] response would have been” and “I didn't have to have a discussion so it's very difficult for me… to say what I would have done”. In answer to questions from the bench at the end of his evidence, Mr Ballard indicated that, if Mrs Fielding had come along to the bank in June 2000 and said that its claim to hold her liable on the joint account was “fundamentally dishonest” - words taken from her July 2001 witness statement in the RBS action - and that the bank’s recovery from Hanover Terrace should be limited to the £510,000 that was owing on the loan account, he would have “resisted that approach from her”: Day 4, p 182. Earlier, in cross-examination (at Day 4, p 113), Mr Ballard had accepted that, had Cumberland Terrace not been undergoing refurbishment, he would not have agreed to the release of £440,000 to Coutts & Co, but he would have wanted the whole of the sale proceeds of Hanover Terrace (less presumably the agents’ fees) to be paid to RBS. In paragraph 25 of his witness statement, Mr Ballard indicated that he “would have sought to reach an ‘in principle’ agreement with Mrs Fielding in the first instance, before obtaining final approval of any proposal from Derek Sach”. Mr Ballard did not suggest that he would have consulted Sandy Wilson, who was not involved with the Grangewoods’ connection at this stage (and who was junior to Mr Ballard), about the terms of any proposed settlement.

Mr Sach was the person at RBS with the authority to approve any settlement with Mrs Fielding. Both in his witness statement, and in cross-examination (at Day 5, p 36), Mr Sach indicated that nothing would have happened, so far as he was concerned, unless Mr Ballard had come to him in the first place; and everything would have turned on what Mr Ballard had told him. Whilst Mr Sach would have been relying on the advice of the bank’s lawyers so far as matters of law were concerned, it was Mr Ballard who would have dealt with the lawyers, and summarised the legal position; and Mr Sach indicated that he would have been relying to a greater extent upon Mr Ballard's judgment than that of the lawyers (Day 5, p 47). There was no indication in Mr Sach’s witness statement that he would have consulted Sandy Wilson, who was not involved with the Grangewoods’ connection until October 2000, about the terms of any proposed settlement. However, it was Mr Wilson who had asked Mr Sach, a long time ago, to consider whether he (Mr Sach) would have agreed to RBS releasing Mrs Fielding (but not Mr Fielding) from any further liability to the bank in exchange for the payment to RBS of the net sale proceeds of Hanover Terrace, after deduction of estate agency charges, or a settlement in similar terms, in circumstances in which Mrs Fielding had challenged her liability to RBS generally, and, in particular, the entitlement to the bank to be paid those net proceeds of sale: see the answers to the court’s questions at Day 5, pp 33-4.

I accept the criticism levelled by Miss Carr at Mr Sach’s witness statement (not drafted for the purposes of the trial itself) that it was prepared, not as full and fair evidence on the issues in the claim, but in order to argue the bank's case on certain issues only; and that Mr Sach's credibility was substantially undermined by the fact that his witness statement was all one-way, dealing with all of the factors that tended to support the fact that a settlement might have been entered into, yet ignoring any factors that suggested the contrary. In cross-examination (at Day 5, p 62), Mr Sach sought to excuse this on the basis that “I think it is impossible in a hypothetical situation to put all the factors in”.

Despite the partiality of his evidence, Mr Sach made a number of interesting observations. He was adamant (at Day 5, pp 29-80) that “Albeit we established that [Mrs Fielding] did not have any significant assets, she did have some, and if she really wanted to settle on a once and for all basis we would want to have some share of her other assets as well…the settlement did actually require that we had a share of the rest of her assets which we believed, or on the information I was given, I believed to be about £300,000 and we would have wanted a share of that.” Despite the terms of paragraph 26 of his witness statement, Mr Sach later indicated (at Day 5, p 85) that he “might have pushed my 50% of her cash upwards”. In re-examination, Mr Sach stated that it “could have been a month before we reached an agreement” with Mrs Fielding (Day 5, p94); that “we would need quite a lot of persuasion” that trusts assets in any settlement created, but not controlled, by Mr Fielding were beyond his wife’s reach (Day 5, pp 97-8); and that £3 million was “an absolutely top price” for Hanover Terrace, “so to put that sale beyond peradventure as soon as possible would have been a very high priority” (Day 5, p 99). In answer to questions from the bench at the end of his evidence, Mr Sach indicated that he would have been prepared to concede the payment of £440,000 from the sale proceeds of Hanover Terrace to Coutts and & Co (because it was part of the RBS group), but that it would have been “too much” to have allowed Lawrence Graham to honour their undertaking to pay £1,255,000 to Coutts & Co (Day 5, pp 99-102). The court also referred Mr Sach to a letter before action written, in the context of the present litigation, by Cripps Harries Hall LLP, in their capacity as the claimant’s solicitors, to Lawrence Graham on 27^th April 2006. It included the statement: “Whilst the £2.51 million paid to RBS was paid without Mrs Fielding's authority (save to the extent of £510,000), our client is satisfied that RBS could not have been persuaded to accept less out of the proceeds of sale of Hanover Terrace.” Mr Sach accepted that “I think that is about the level at which we would have stuck”. Despite Mr Livesey's efforts in further re-examination of Mr Sach, I do not consider that he made any real inroads into that answer.

By the time he came to give evidence before me, Mr Wilson had retired from his position at RBS. It was he who had instructed Mr Garry, on behalf of the bank, to commence the proceedings for a freezing order, and the substantive proceedings, against Mrs Fielding; to pursue the claim against her, and to defend her counterclaim, through to trial; to resist Mrs Fielding’s appeal; to bankrupt Mrs Fielding; and to require her to answer questions, on deposition, in the United States. Mr Wilson acknowledged that RBS was funding Mrs Fielding's trustee in bankruptcy to bring this claim; and that RBS had spent several hundred thousand pounds in attempting to find Mrs Fielding's assets, yet little had been recovered to date; but he maintained that “it's still quite conceivable that assets will be identified which would be caught by [Mrs Fielding's] former bankruptcy”. (Day 5, pp 112-8). Later (at Day 6 p 12), Mr Wilson acknowledged that, so far as the bank was concerned, it was “a possibility” that Mrs Fielding might still be sheltering assets stolen by her husband.

I found Mr Wilson’s witness statement (expressly prepared in the context of the summary judgment application) and his oral evidence to be highly unsatisfactory for a number of reasons. First, Mr Wilson accepted that he would not have been any part of the hypothetical decision-making process in June 2000, and that he had no direct, or personal, knowledge of, or involvement in, matters concerning the Grangewoods’ connection until October 2000. Yet it was Mr Wilson who, according to Mr Sach, had first suggested the terms of the hypothetical “settlement” to him. Secondly, Mr Wilson had spoken to none of the relevant individuals - Mr Herbert, Mr Hunter, or Mr Ballard - before making his witness statement. Thirdly, Mr Wilson’s evidence was one-sided, partisan and often, because he was addressing matters of which he had no direct knowledge, inaccurate - for example, the assertion in paragraph 20 of his witness statement that “The Bank believed that it was receiving as much cooperation from Mr Fielding as he could give” was contrary to the evidence, and contemporaneous views, of both Mr Herbert and Mr Ballard; and, when challenged (as at Day 5, pp 130-137), Mr Wilson’s answers to questions justified Miss Carr’s accusation that he was “wriggling”. Mr Wilson consistently sought to put the best possible gloss on matters from the perspective of the claimant (and thus of RBS), as in his answers to questions (at Day 5, pp 139- 147) about the bank’s perceptions of Mrs Fielding as a potential source of repayment, and as a way of controlling her husband. Fourthly, it was only as a result of a passing remark from Mr Wilson (at Day 5, p 152), to the effect that the bank had made an approach to Mrs Fielding that had fallen “on stony ground”, which was taken up by the court on the same afternoon at p 156, that it came to light (after an overnight adjournment) that the bank, acting by Mr Wilson, had initiated a counsel-to-counsel offer of settlement, on the evening before the first day of evidence in the RBS action, under which the Fieldings would have been required to pay the bank £2.5 million in cash. The solicitors’ (Cripps Harries Hall’s) redacted attendance note records that the bank’s “worst settlement” figure had been £1.6 million, to include costs (placed by Mr Wilson, at that time, at some £2-300,000); but, when the bank’s opening offer of £2.5m had been put by leading counsel for RBS (Mr Purle QC), there had been no negotiation over it because Mrs Fielding’s legal representatives had said that they had not got £2.5 million, to which Mr Purle had responded “we think they have got it”. In cross-examination (on Day 6 pp 3-8) Mr Wilson accepted that the bank might have gone down to a settlement figure of £1.5m; and that, excluding costs, Mr Wilson’s bottom-line figure had been for RBS to receive in the order of £1.3 million (in addition to the £2.51m that RBS had previously received on the sale of Hanover Terrace). Despite Mr Livesey’s delicate probing in re-examination, Mr Wilson was unable to say whether RBS might have accepted any less than a further £1.3m net, although he did make it clear that any settlement at that stage would have been on a full and final basis.

In my judgment, Miss Carr is justified in submitting that Mr Wilson, like Mr Sach, suffered from the fact that his evidence was given with the benefit of hindsight; that it served RBS's interests; and that it was out of step with the reality of the position in 2000 as it emerged from the cross-examination of the relevant individuals within RBS. I formed the clear view that the present claim was the construct of Mr Wilson, in combination with Cripps Harries Hall LLP.

Mr Caplan (who originally qualified as a lawyer in Scotland) gave his evidence candidly and in a straightforward manner. I formed the view that he was a careful and conscientious solicitor; but his expertise clearly lay in the field of commercial property, acting (under the supervision of a partner in the property department, which Mr Fielding was not) for corporate clients; and Mr Caplan was wholly lacking in experience in the field of English residential conveyancing. Thus, he said in evidence that he did not appreciate that the undertaking that Lawrence Graham had given to Coutts & Co had related to a bridging loan for the purchase of Cumberland Terrace. However, Mr Caplan did accept (at Day 6, p 89) that it was within the usual activities of a domestic conveyancing solicitor to ascertain any redemption figure; (at Day 6, pp 105-6) that, in the normal course of events, a solicitor would be under a duty to make personal contact with the client; that, if a property was jointly owned, and instructions were being given by one of the co-owners as to what was to be done with it, in the normal course of events a solicitor would be under an obligation to make contact with the other co-owner in order to confirm those instructions, and, where the transaction involved documents which needed explanation, or were unusual, the solicitor would also be under an obligation to explain the contents, meaning, and effect of those documents to that client; (at Day 6, p 107) that a domestic conveyancing solicitor owed a duty to the client to ensure that his or her money was placed where he or she wanted it; and (at Day 6, p 108) that such a solicitor owed a duty to make the client aware of the amount required to redeem any outstanding charge, in order to discover whether he or she agreed with it or claimed that the figure was wrong.

Mr Caplan had clearly been somewhat in awe, and possibly even a little afraid, of Mr Fielding, who he described as “a larger than life character” and “a very demanding individual” who could take up a lot of one’s time. Mr Caplan did not think that it was his place to ask Mr Fielding, as a senior partner in the firm, about his family's financial affairs. He viewed the transaction as one where he had Mrs Fielding's “authority effectively being given to me by her husband, a partner in the firm I worked with, who I viewed giving me instructions throughout… I was comfortable in the fact that I felt I was getting appropriate instructions on her behalf from Michael Fielding.” (Day 6, pp 104-5). Mr Caplan did not conceive that it was any part of his duty to try to ensure that Mrs Fielding had independent advice for her own protection because he was “comfortable with the instructions I was getting, and I never felt at any stage in the transaction that I had a client who had any concerns as to the instructions I was receiving”, although he accepted that he did not ask Mrs Fielding about them (Day 6, pp 109-110). As Mr Caplan observed (at Day 6, p 123): “Because the husband is Michael Fielding, who is a partner who dealt with banking and corporate transactions in the firm,…that made it a different situation from the normal transaction to be undertaken.”

Since there is little real dispute as to the course of the conveyancing transactions, which are fully and accurately documented in Lawrence Graham’s files, ultimately, Mr Caplan's evidence added little to my understanding of the case. I accept his evidence that the communications he had with Mr Fielding on the Hanover Terrace file were not directed to receiving guidance on legal issues, in the role of a supervising partner, but rather were concerned with receiving instructions from Mr Fielding in his capacity as the agent of the firm's client. A good example of this is the e-mail that Mr Caplan caused to be sent to Mr Fielding at 10.14am on 3^rd March 2000 (the day of exchange of contracts on the sale of Hanover Terrace), and relating to the transfer to the purchasers of the benefit of the pending application for a new long lease of the property. However, whilst I find Mr Caplan generally to have been a reliable witness, I do have some difficulty (in view of the terms of paragraph 19 of his witness statement) in accepting Mr Caplan's evidence (at Day 6, pp 126-133) that he had actually been told by Mr Fielding that Miss Simmons was going to see his wife to give her independent legal advice; but I do acquit Mr Caplan of any deliberate deception or embellishment in this regard.

A number of authorities were cited to me, as follows:

Mr Livesey correctly submitted that the central dispute on the issue of liability turns upon the question whether any relevant duty was owed by Lawrence Graham to Mrs Fielding: since there is no relevant dispute of fact, the identification of the precise scope and nature of the duties that Lawrence Graham owed to Mrs Fielding will itself determine the issue of breach of duty. It is trite law that, as stated by Oliver J in Midland Bank Ltd v Hett, Stubbs & Kemp [1979] Ch 384 at 402H, the extent of a solicitor's duties depends upon the terms and limits of his retainer, and any duty of care to be implied must be related to what he is instructed to do. In the present case, there was no formal letter of retainer, so its terms must be inferred from the work which Lawrence Graham were required to perform. That work comprised, initially, the conveyancing work associated with the sale of Hanover Terrace and, shortly thereafter, the conveyancing work associated with the purchase of Cumberland Terrace. I reject, as contrary to the contemporaneous documentation, the submission for Lawrence Graham that its retainer in relation to Cumberland Terrace was limited to the giving of undertakings in favour of Kanter Jules and their clients; but, in my judgment, nothing turns on this point, since the relevant breaches of duty asserted by the claimant would seem to me to fall squarely within the performance of Lawrence Graham’s developing retainer in relation to the sale of Hanover Terrace.

In my judgment, it is crucial to any analysis of the facts of the present case to appreciate that, as I find, Mr Fielding was acting throughout in a dual capacity: First, and foremost, he was acting as his wife's agent, both in instructing Lawrence Graham to act as her solicitors in the sale of Hanover Terrace and the purchase of Cumberland Terrace, and also in undertaking many of the ordinary tasks that would be undertaken by any seller, or purchaser, of a family home. Unsurprisingly, and in common with many other busy professional persons not engaged in third party employment, many of these latter tasks were undertaken from Mr Fielding’s office at Lawrence Graham's premises, and using Lawrence Graham's computer, e-mail and other facilities. But, in addition, Mr Fielding was also performing certain of the tasks that would ordinarily be undertaken by a conveyancing solicitor, particularly in relation to Cumberland Terrace. However, it was not in his capacity as her solicitor, but rather in his capacity as her husband, that Mrs Fielding left it to Mr Fielding to secure the bridging finance required in order to purchase, and then to finance the substantial works of refurbishment to, Cumberland Terrace, and thereafter to settle the amount required to repay that bridging finance, as well as the sum owing to RBS on the security of Hanover Terrace. As she had done throughout their marriage, Mrs Fielding left it to her husband to settle their financial affairs; and she did so because he was her husband, and not because he was a partner in Lawrence Graham, or because that firm was acting for her on the conveyancing work required in connection with the purchase of Cumberland Terrace and the sale of Hanover Terrace. Mr Fielding already knew the full extent of the joint indebtedness that was secured on Hanover Terrace; but he did so because he was one of the joint debtors, and not because he was his wife’s solicitor; and such knowledge was not acquired by Mr Fielding in the course of acting as his wife's solicitor. On the evidence before me, Mr Fielding did not impart such knowledge to anyone else at Lawrence Graham.

In my judgment, it is also important to bear in mind that, until June 2001, there was no reason for anyone to think that Mr Fielding was a dishonest individual. In paragraph 16 of his witness statement, dated 21^st October 2002 and made for the purposes of the RBS action, Mr Louden, who was Mr Ballard's predecessor until May 1999, stated that the bank had no reason to suppose that Mr Fielding had been acting fraudulently as against his wife. Mr Wilson, who came on to the scene in October 2000, said (at Day 6, p 18) that he believed that Mr Fielding was “a well-respected and eminent lawyer in a substantial legal firm in London”. Whilst Mr Ballard and Mr Herbert had come to mistrust Mr Fielding, and to believe that he had been stringing the bank along by a series of false promises, that is very different from entertaining the view that he might be financially dishonest, or that he might have been engaged in a sustained deception of his own wife to her serious financial detriment. Throughout 2000, and before then, Mr Fielding was a senior partner in a highly respected City solicitors’ firm; and no-one exercising the degree of skill and care reasonably to be expected of a competent solicitor could reasonably have been expected to be on the lookout for any indication that Mr Fielding was deceiving his own wife as to the true state of their financial affairs. It is trite law that partnership is a fiduciary relationship, importing duties of loyalty and good faith; and there is no evidence before me that, before 2001, anyone at Lawrence Graham had any reason to perceive Mr Fielding as dishonest, or to view him with any degree of suspicion or reserve.

Mr Livesey does not contend for any breach of duty prior to the exchange of contracts on the sale of Hanover Terrace on 3^rd March 2000. In my judgment, he was right not to do so. Lawrence Graham received a signed authority from Mrs Fielding to sign the sale contract on her behalf. From her evidence in the RBS action, it is clear that Mrs Fielding knew, and approved, of the sale of Hanover Terrace at what, it is common ground, was the advantageous price of £3 million, and with a completion date of 23^rd June 2000. Mr Livesey himself acknowledged, in a question that he put to Mr Caplan (at Day 6, p 114), that, with such a long completion date, it was unnecessary for Lawrence Graham to have obtained a redemption figure at the time of exchange of contracts on the sale of Hanover Terrace. It is important to bear in mind that, after 3^rd March 2000, Mrs Fielding was contractually committed to a sale of Hanover Terrace, with a contractual completion date of 23^rd June 2000.

In his closing speech, Mr Livesey identified three separate points of “impact” at which he contended that his case on breach of duty arose for consideration. The first was the interval between exchange of contracts on the sale of Hanover Terrace (3^rd March 2000) and exchange of contracts on the purchase of Cumberland Terrace (17^th March 2000). Mr Livesey submitted that, during that period, Mr Caplan failed to make contact with Mrs Fielding and secure her instructions; that he failed to approach RBS to establish a redemption figure for Hanover Terrace; and that he failed to communicate the resulting redemption figure to Mrs Fielding. In my judgment, Lawrence Graham were not in breach of duty in any of these respects. On 13^th March 2000, Mrs Fielding signed a letter authorising Lawrence Graham to give an undertaking or undertakings in respect of the sale proceeds of Hanover Terrace to Coutts & Co for up to £1.25 million. The undertaking actually given at that stage was for only £300,000; and Mr Fielding had assured Mr Caplan (by e-mail on 13^th March 2000) that, whilst the redemption amount for RBS would not be known until nearer completion, that figure was much below £300,000. In my judgment, no residential conveyancing solicitor, exercising reasonable skill and care, would have approached Mrs Fielding at this time in order to seek her further instructions, or express confirmation of the instructions that were being given on her behalf by her husband; nor, in the face of such confirmation from Mr Fielding, and without express instructions from Mrs Fielding to do so, would such a solicitor have approached RBS for a redemption figure. In any event, I have no doubt whatsoever that, had Mr Caplan approached Mrs Fielding during this period, she would have firmly told Mr Caplan that her husband was dealing with these matters and that he (Mr Caplan) should not be troubling her in that regard.

Mr Livesey’s second point of impact was between exchange of contracts on the purchase of Cumberland Terrace (17^th March 2000) and completion of that purchase (6^th April 2000). During this period, Lawrence Graham’s undertaking to Coutts & Co was increased to £1,255,000, without any independent verification that this sum would be available from the sale proceeds of Hanover Terrace; and Mrs Fielding executed an “all monies” legal charge over Hanover Terrace in favour of Coutts & Co. Again, I reject the submission that Lawrence Graham were in breach of any duty owed to Mrs Fielding during this period. Mrs Fielding had already authorised Lawrence Graham in writing to give an undertaking or undertakings in respect of the sale proceeds of Hanover Terrace for up to £1.25 million. In view of the instructions they were receiving from Mr Fielding on behalf of his wife, I do not consider that Lawrence Graham were negligent in failing to secure Mrs Fielding’s written confirmation of their authority to give an undertaking for an additional £50,00. In any event, had they sought to do so, I have no doubt that such further written authority would have been forthcoming from Mrs Fielding. Although the legal mortgage over Hanover Terrace, executed in favour of Coutts & Co, was an “all monies” legal charge, it related only to the borrowings of Mrs Fielding alone, and not to joint borrowings of Mrs Fielding and her husband. There was no evidence before the court that Mrs Fielding had ever borrowed any other sums from Coutts & Co, or that she was under any liability to Coutts & Co in respect of any sums for which Mr Fielding was indebted, or otherwise liable, to them. In my judgment, in all the circumstances of the case, no further oral explanation of the legal charge was called for. In any event, Mrs Fielding's execution of the legal charge was witnessed by a solicitor other than Mr Fielding; and, if there was anything that she did not understand, Mrs Fielding (who was found by Hart J to be “a not unintelligent…lady”) was quite capable of asking Miss Simmons for an explanation. Mr Livesey pointed out that there was no evidence from Miss Simmons; but then there was no evidence from the claimant of any complaint from Mrs Fielding about the circumstances attending the execution of the legal charge which called for any response from Lawrence Graham in the form of evidence from Miss Simmons.

My foregoing findings on the issue of breach of duty are sufficient to dispose of Mr Livesey’s alternative, and secondary, claim to recover the sum of £371,875 paid to Coutts and Co out of the £490,000 that was left after RBS had received its share of the sale proceeds of Hanover Terrace. Since there was no relevant breach of duty, there can be no consequential claim to damages. (Indeed, Mr Livesey recognised that one of the weaknesses of this alternative claim was that it depended upon establishing a breach of duty prior to any exchange of contracts on the purchase of Cumberland Terrace.) But this head of claim would have failed in any event for want of causation. It was clear from the evidence of Mr Ballard in cross-examination (at Day 4, p 113) that, but for the purchase of Cumberland Terrace and the bridging loan from Coutts & Co, he would never have agreed to the release of this sum to Coutts & Co. Thus, this sum would never have been available to Mrs Fielding in any event, but would have been retained by RBS from the sale proceeds of Hanover Terrace. It was with these considerations in mind that, without abandoning his alternative claim, Mr Livesey concentrated his efforts upon his primary claim.

There was no direct evidence before the court to explain how Mr Fielding had persuaded Mr Gowar, then the senior partner, to sanction the giving of an undertaking from Lawrence Graham to pay £1,255,000 to Coutts and Co on completion of the sale of Hanover Terrace when the relevant fee earner, Mr Caplan, had received no independent confirmation that that sum would be available on completion. From documents within RBS’s files (Mr Herbert's memorandum of his meeting with Mr Fielding on 10^th March, and Mr Herbert's letter to Mr Fielding of 22^nd March 2000), it is clear that Mr Fielding's understanding at that time was that the bank would require only £1.7 million from the sale proceeds of Hanover Terrace to be used in reduction of the Fieldings’ borrowings with RBS, with up to £1.3 million being allowed to the Fieldings for the purchase of their new property and the carrying out of improvements to it. The clear inference (which I draw in the absence of any contrary evidence) is that Mr Fielding felt able to assure his relevant fellow partners that the free sale proceeds of Hanover Terrace would be sufficient to enable the undertaking to be discharged. Had anyone at Lawrence Graham subsequently sought to challenge Mr Fielding's good faith in this regard, he would have been able to point to Mr Herbert's letter of 22^nd March 2000 by way of justification of his position.

After 6^th April 2000, nothing of any moment happened until shortly before completion was due to take place on the sale of Hanover Terrace. Mr Livesey's third, and final, point of impact was 22^nd June 2000, when it is said that it was, or should have been, apparent to any reasonably competent conveyancing solicitor that RBS was claiming that there was no equity for Mrs Fielding in Hanover Terrace, and, in consequence, that an alternative source of funding was required in order to repay Coutts & Co's short-term bridging finance, involving the creation of security over Cumberland Terrace, in favour of off-shore funders, of an unusual, and extraordinary, nature, thereby rendering Mrs Fielding's continued occupation of her new home precarious. As Mr Livesey recognised, his case on liability is at its strongest on 22^nd June 2000.

In order to overcome difficulties that might arise on issues of causation, it was implicit in Mr Livesey's formulation of his case on breach of duty that Lawrence Graham, acting by Mr Caplan or someone else within the property department (but excluding Mr Fielding), were under a duty to attend upon Mrs Fielding personally (either at her home, or by requiring her to call in to Lawrence Graham's offices) in order to explain to her, and to ensure that she fully understood and appreciated, that, because £2.51 million from the sale proceeds of Hanover Terrace was being paid over to RBS, there were insufficient funds available to enable Lawrence Graham to honour their undertaking to Coutts & Co without recourse to the alternative funding which, in the event, Mr Fielding had secured for her, albeit on a short-term basis, from overseas lenders, in the total sum of £927,500, and on terms which would enable them to require a transfer of Cumberland Terrace from Mrs Fielding to a nominee of their choice. Mr Livesey is prepared to acknowledge that it would not have been feasible for such an explanation to have been conveyed in writing because of (1) the limited timescale within which the sale of Hanover Terrace had to be completed and (2) Mr Fielding's proved propensity to intercept written communications to Mrs Fielding, and to procure her signature to any document that he chose to place before her. It is clear on the evidence, Mr Livesey submits, that it never occurred to anyone at Lawrence Graham that it was necessary to give such an explanation to Mrs Fielding because they proceeded on the footing that she had already received any necessary explanation from her husband; but, so Mr Livesey contends, it was not open to Lawrence Graham to delegate their duty as solicitors in this way. It is clear from the findings of Hart J in the RBS action that Mr Fielding in fact provided no full, or fair, explanation of the financial arrangements that attended the sale of Hanover Terrace. Mr Livesey submits that either that omission was something for which Mr Fielding was responsible in his capacity as his wife's solicitor (in which case, it is an omission for which Lawrence Graham are vicariously liable) or it is one for which Mr Fielding was responsible in his capacity as his wife's agent (in which case it is an omission which Lawrence Graham should have corrected in the proper discharge of their duties as Mrs Fielding’s solicitors).

I have every sympathy with Lawrence Graham’s position, and particularly with the situation in which Mr Caplan found himself in relation to this transaction. I also acknowledge that the case now sought to be advanced on Mrs Fielding's behalf by the claimant, as the trustee in her former bankruptcy, is one that merits the most intensive scrutiny, requiring both rigorous analysis and a principled approach. Nevertheless, I have to recognise the force of at least part of Mr Livesey's submissions. Whatever the position might have been in the absence of Lawrence Graham's undertaking to pay £1,255,000 to Coutts & Co on the completion of the sale of Hanover Terrace, once Lawrence Graham had given that undertaking, the sale of Hanover Terrace could not proceed to completion unless either (1) out of the sale proceeds, RBS were prepared to accept less than the sum that was required to be paid to Coutts & Co or (2) an alternative source of funding, and thus of payment, could be found. In the event, Mr Fielding found an alternative source of funding. Once he had done so, in my judgment Lawrence Graham's retainer properly extended to the provision of appropriate legal (as distinct from commercial) explanation and advice as to the terms of, and the security for, (but not the commercial wisdom of) such alternative funding. No such explanation or advice was ever given to Mrs Fielding. This was because Lawrence Graham proceeded on the footing that any appropriate explanation and advice would have come from Mr Fielding. But, to the extent that they looked to Mr Fielding to discharge their duty in this regard, Lawrence Graham must have been looking to him to do so in his capacity as a solicitor and partner in the firm of Lawrence Graham, rather than as the husband of the firm’s client; and they are therefore vicariously liable for his omission to give such explanation and advice. In my judgment, a firm of solicitors who, when acting for the spouse (or any other relative) of a partner looks to that partner to discharge a legal duty falling within the scope of that firm’s retainer is liable for any failure in that regard.

However, whilst I consider that Lawrence Graham should have provided Mrs Fielding with appropriate legal explanation and advice as to the terms of, and the security for, the short-term offshore funding that was being obtained for her consequent upon the failure of Mr Fielding to negotiate permanent secured funding from RBS in an amount sufficient to repay Coutts & Co’s bridging loan, I am satisfied that Lawrence Graham would have sufficiently discharged their duty in that regard by providing such advice in the form of a letter to Mrs Fielding, rather than by attending upon her personally, either at her home or by summoning her to Lawrence Graham’s offices. Lawrence Graham had no reason to think that any letter directed to Mrs Fielding would be intercepted by her husband; and there is no evidence that there would have been any difficulty in delivering a letter to Mrs Fielding (either by courier or by e-mail) during the course of 22^nd June. (Mrs Fielding’s two signed letters of authority to Lawrence Graham were both dated 22^nd June; and the e-mail address in the heading indicates that Mrs Fielding was able to receive documents by e-mail.)

I do not consider that Lawrence Graham owed Mrs Fielding any more extensive duties of the nature contended for by Mr Livesey. In my judgment, Lawrence Graham owed no duty, in particular, to guard Mrs Fielding against the risk that she was being deceived, still less defrauded, by her husband. Mrs Fielding had appointed Mr Fielding to act on her behalf in matters concerning the sale of Hanover Terrace and the purchase of Cumberland Terrace because she trusted her husband; and Lawrence Graham were not on notice of anything that might have indicated to a firm of reasonably competent solicitors that that trust was misplaced, or that it was being betrayed. If, during the course of the execution of their retainer, any such matter had come to their notice, on the authority of the Credit Lyonnais case Lawrence Graham would have been under a duty to bring it to Mrs Fielding’s attention as part of the solicitors’ duty (paraphrasing the words of Laddie J) to report back to their client on issues of concern which they learn of as a result, and in the course, of carrying out their express instructions. However, I am not persuaded that any such actual, or potential, risk of deception or fraud on the part of Mr Fielding ever came to Lawrence Graham’s notice. Nor am I satisfied that Lawrence Graham were on notice of the fact, or extent, of the joint borrowings for which Mrs Fielding would remain liable even after the sale of Hanover Terrace, still less that, in accordance with the terms of their retainer, they owed any duties to her in that regard.

I now turn to consider what would, or might, have happened had Lawrence Graham provided Mrs Fielding with an appropriate letter of legal explanation and advice as to the terms of, and the security for, the short-term offshore funding that was being obtained for her consequent upon her husband's failure to negotiate permanent secured funding from RBS in an amount sufficient to repay Coutts & Co's bridging loan.

In the leading case of Allied Maples the Court of Appeal had to consider what had to be proved in order to establish causation in a case where the claimant’s loss depended upon the actions of an independent third party. It was held that, if the defendant's negligence consisted of an omission, such as an omission to provide appropriate information or advice, causation depended, not upon a question of historical fact, but on the answer to the hypothetical question: what would the claimant have done if the information or advice had been given? This could only be a matter of inference, to be determined from all the circumstances. Although the question was a hypothetical one, it was held to be well established that, where the relevant acts or omissions were those of the claimant, he must prove, on a balance of probabilities, that he would have taken action to obtain the benefit or avoid the liability; but that where the claimant’s loss depended on the hypothetical actions of a third party, either in addition to action by the claimant or independently of it, the claimant could succeed provided that he could show that he had a real or substantial chance, as opposed to a speculative one, of obtaining the benefit or avoiding the liability. Such a situation should be contrasted with the position (considered by Lord Hoffmann in the recent case of In re B (Children) [2008] UKHL 35, [2008] 3 WLR 1 at para 2) where a legal rule requires a fact to be proved; there the law operates a binary system in which the only values are zero and one, and there is no room for a finding that the fact in issue might have happened: it either happened or it did not, and if the tribunal is left in doubt, such doubt falls to be resolved by the rules governing the burden of proof.

I am satisfied, on the authority of dicta of Stuart-Smith LJ in Allied Maples at 1611G and the decision in the Talisman Property case, that the principles governing the assessment of damages for the loss of a chance apply just as much to the chance of avoiding a pre-existing liability as they do to the chance of securing a benefit. I accept Mr Livesey's submission that the loss of an opportunity to negotiate the reduction, or avoidance, of a valid and binding existing debt or liability is a permissible loss of chance claim.

Initially, it appeared that there was an issue between the parties as to the proper approach to the assessment of the chance of Mrs Fielding concluding a negotiated settlement with RBS. In his written closing (at paragraph 83), Mr Livesey accepted that the burden lay upon the claimant to prove, on a balance of probabilities, that Mrs Fielding would have sought to negotiate with RBS had Lawrence Graham discharged their duty to her. Having done that, the claimant then had to show that there was a real and substantial prospect that RBS would have been prepared to reach an agreement with Mrs Fielding; but the percentage chance of settlement at any particular figure was a matter for evaluation by the court. Relying on a passage from the judgment of Stuart-Smith LJ in Allied Maples at 1610H (“In the present case, the plaintiffs had to prove that if they had been given the right advice, they would have sought to negotiate with Gillow to obtain protection”), Mr Livesey submitted that, if there was a real or substantial chance that RBS would have negotiated with Mrs Fielding, then it was for the court to evaluate the chance that they would have reached agreement (Day 8, pp 61-2). At the court’s invitation, Mr Livesey returned to this theme (at Day 8, pp 100-5), submitting that, once he had shown, on the balance of probabilities, that Mrs Fielding would have negotiated with RBS, the court simply had to evaluate the chance of a deal being reached; it did not have to go on to consider, on a balance of probabilities, how Mrs Fielding would have responded to any offer from RBS: “I have to show you that [Mrs Fielding] would have been prepared to negotiate; all you then need to do is evaluate and apply a percentage chance to the contention that it would reach an appropriate negotiation and resolution…”

By contrast, Miss Carr submitted that, even if it was demonstrated that there was a real or substantial chance that RBS would have negotiated with Mrs Fielding, it remained for the claimant to establish, on the balance of probabilities, that Mrs Fielding would have agreed to terms acceptable to RBS. The claimant was required to prove each act that Mrs Fielding would allegedly have taken, in the hypothetical course of events proposed, on the balance of probabilities. It was not a question of the claimant merely satisfying the court at the outset that Mrs Fielding would, on the balance of probabilities, have challenged RBS, and thereafter it all merging into one loss of a chance: rather, each link in the chain that involved an alleged act by Mrs Fielding had to be proved on the balance of probabilities. On Day 9, at pp 13-22, Miss Carr submitted “that when it comes to causation in fact, where it is the claimant’s act that is in issue, it must be proven on the balance of probabilities…The percentage exercise only comes in where the acts of the third party are concerned”. The observations of Stuart-Smith LJ, cited in aid by Mr Livesey, were said to be explicable on the footing that Allied Maples was a “single issue” case: had the claimant asked for protection against original tenant liability, was there a real or substantial chance that Gillow would have conceded it; there was never any doubt that the claimant would have accepted such protection had it been available. Miss Carr cited, in support of her submission, extra-judicial observations of Neuberger LJ (as he then was) at paragraph 35 of his lecture, “Loss of a Chance” (Footnote: ¹), and, more pertinently, the authority of his approach at paragraphs 48-9 of Maden v Clifford Coppock & Carter. Faced with that authority, in his reply (at Day 10, pp 46-7), Mr Livesey accepted the correctness of Miss Carr’s approach and (adopting the court’s formulation of the test to be applied) he acknowledged that the claimant had to show, on the balance of probabilities, that Mrs Fielding would have agreed to any deal that there was a real or substantial chance that RBS would have proposed to her. I am satisfied that Mr Livesey was right to do so.

I hold that the correct approach in law is as follows: (1) The claimant must prove, on the balance of probabilities, that Mrs Fielding would have approached RBS. If she succeeds in doing so, then (2) the court must determine whether there was a real or substantial chance that RBS would have responded to such an approach by proposing a deal to Mrs Fielding. If it does so, then (3) the claimant must prove, on the balance of probabilities, that Mrs Fielding would have accepted that deal. In any negotiation, each party will, from time to time, inevitably adopt negotiating positions which do not reflect their ultimate settlement positions. The court needs to accommodate such posturing. It should do so by (a) identifying the deal least favourable to the third party that there is a real or substantial chance that it would have put forward (the “bottom line”) and (b) asking whether that deal would probably have been accepted by the claimant (or, in this case, Mrs Fielding). If, on the balance of probabilities, the bottom line would not have been accepted, then the process can stop there: causation has not been established, and the claim fails. If, however, the bottom line would probably have been accepted, then the court should repeat the exercise in relation to the deal that there is a real or substantial chance that the third party would have put forward just before it would have proposed its bottom line. If, on the balance of probabilities, that deal would have been rejected, then the court should proceed to evaluate the chance that the third party would have proposed its bottom line. If, however, the claimant (or, in this case, Mrs Fielding) would probably have accepted that deal, the process should be repeated until the court has identified the deal that is both closest to the third party’s bottom line and one that would probably have been accepted by the claimant (or, in this case, Mrs Fielding). The court should then proceed to evaluate the chance that the third party would have proposed that deal. In my judgment, such a disciplined, and principled, approach affords the only acceptable way out of the “almost impossible situation” in which a judge would otherwise find himself in a case where causation turns on what both the claimant and a third party would have done.

In my judgment in the case of Stone Heritage (cited above) I ventured to suggest (for the reasons that I then gave) that in a case where all the material potentially relevant to the third party’s actions had been placed before it, the court should be allowed to proceed to determine what the relevant third party might have done in the relevant hypothetical fact situation by applying the usual standard of proof on the balance of probabilities. In the present case, Miss Carr points out that, far from all potentially relevant third party material being before the court, it is materially incomplete, not least by reference to the legal advice that might have been given to RBS by Mr Garry (who, without intending any disrespect, I cast in the role of Polonius). As I pointed out during the course of the trial, the claimant could have sought to adduce such evidence without the need for any waiver of privilege since no legal professional privilege can attach to hypothetical legal advice that was never actually sought or given. In principle, I can see much to be said for the application of the usual civil standard of proof, on the balance of probabilities, to the hypothetical actions of a third party in any case (such as the present) where the claimant has been in a position to place before the court all of the evidence that may potentially be relevant to the third party’s hypothetical actions. However, Miss Carr, no doubt apprehensive of the costs (if not the outcome) of an appearance before an appeal court or courts, did not press the court to assess RBS's actions by reference to the balance of probabilities, but rather by reference to the lower test of whether or not there was a real and substantial prospect that it would have negotiated with Mrs Fielding. However, she did (at Day 10, pp 1-4) pray the case of Stone Heritage in aid of her submission that in a case, such as the present, where the third party has had every opportunity to place all potentially relevant material before the court, the court should be looking for “a really meaningful lower threshold” before it is prepared to find that there was a real and substantial prospect of the third party making any offer along the lines now suggested by the claimant. I accept Miss Carr's submission to this extent: that the more potentially relevant material there is before it, the easier it is for the court, and the more ready it should be, to make a realistic assessment of the prospects of any proposed hypothetical course of action having eventuated; and where relevant third party material, although available, has, without proper explanation and justification, been withheld from the court, the court should not be astute to make allowances for its absence in its assessment of those prospects.

Miss Carr submitted, in reliance on observations of Auld LJ at paragraphs 24-6 of the case of Veitch v Avery, that Mr and Mrs Fielding should be regarded as one composite unit for the purpose of assessing the loss of chance, and that the higher threshold of the balance of probabilities should be applied to any evaluation of Mr Fielding’s hypothetical actions. Mr Livesey rejected this approach, submitting that Mr Fielding should not be identified with his wife, but should be treated in the same way as any other third party. He submitted that the factual situation in Veitch was very different from that in the present case; and that the observations of Auld LJ were directed to the particular facts of that case, where there was an identity of approach between the claimant and his father, the attitude of the latter being entirely dependent upon the views of the former. I accept Mr Livesey's analysis of Veitch: and I hold, on the particular facts of the instant case, where the financial interests of Mr and Mrs Fielding were divergent, that the true test to be applied to Mr Fielding's hypothetical actions is the “real and substantial chance” test applicable to any third party.

Both Miss Carr and Mr Hubble drew my attention to the observation at paragraph 9.225 of Simpson: Professional Negligence & Liability that: “It will not always be the case that the claimant must give evidence as to what he would have done if properly advised, but normally the claimant’s inability to give clear evidence on the point will be fatal.” Mr Livesey rightly counselled me against approaching this case on the footing that the evidential playing field is not level; and that the absence of evidence from Mrs Fielding gives rise, as a matter of law, to some sort of presumption against the claimant’s case. I also bear in mind the point made by Mr Livesey in opening, and by reference to a letter to Cripps Harries Hall from Lawrence Graham's own solicitors, Barlow Lyde & Gilbert, dated 3^rd August 2006, that the latter firm of solicitors had made some preliminary contact with Mr Fielding (who was in prison) and with Mrs Fielding (through her solicitors) who had “agreed in principle to assist” Lawrence Graham with this claim; yet, despite this, Lawrence Graham had not sought to rely on any evidence from either Mr or Mrs Fielding by way of defence to this claim. In the light of this letter, I draw no inference either in favour of, or against, either party from their omission to call either Mr or Mrs Fielding to give evidence before me.

However, whilst there is no rule of law requiring evidence from the effective claimant to be adduced in support of a loss of chance claim, there is, at an evidential level, a considerable element of truth in Mr Simpson's commonsense observation: The claimant’s – in this case, Mrs Fielding’s - hypothetical actions must be proved on a balance of probabilities; and in the absence of any evidence from the claimant - in this case, Mrs Fielding – the court may well find such proof to be wanting. This is a case which, to adapt the well-known observation of Danckwerts LJ in Pimms Ltd v Tallow Chandlers Co [1964] 2 QB 547 at 572, is pregnant with lost possibilities. Time after time in the course of the evidence in this case, I was left wondering what Mrs Fielding would have done, or said, in any particular hypothetical factual scenario. Often, it seemed to me that the answer might well depend on what her husband might have said to her in that hypothetical factual scenario. When I turned to consider what RBS might have done in any particular hypothetical factual scenario, I have found myself wondering what hypothetical legal advice Mr Garry might have been tendering to RBS in response to that developing scenario. Again and again, I have found myself wishing that I had been able to put possible hypothetical factual scenarios to Mr and Mrs Fielding, and to Mr Garry; and then to weigh, and assess, their answers as to how they would, or might, have responded to them. I must bear in mind also the point effectively made in cross-examination by Mr Sach that, in a hypothetical situation, it is impossible to cover all of the relevant factors.

In the recent case of In re B (Children), cited above, Baroness Hale of Richmond (at paragraphs 30-32) criticised a trial judge, in a case concerning the alleged sexual abuse of a child, for his expressed inability to make necessary findings of fact, pointing out that this is the task which judges are paid to perform to the best of their ability: The trial judge “is not allowed to sit on the fence. He has to find for one side or the other. Sometimes the burden of proof will come to his rescue. The party with the burden of showing that something took place will not have satisfied him that it did. But generally speaking a judge is able to make up his mind where the truth lies without the need to rely upon the burden of proof.” Those remarks were not addressed to a case, such as the present, where the court is concerned, not to find whether something did take place, but rather whether, in circumstances that never came to pass, something might have happened.

Relying, amongst other things, upon observations of Aldous LJ in the Cavendish Funding case to the effect that “The court could not speculate as to what a person would or would not have said if he had been called as a witness…”, Miss Carr invites me not to engage with RBS in the task of seeking, on the controversial issue of what Mrs Fielding would have done, to draw inferences on the basis of surrounding circumstances, and of evidence given in different proceedings, particularly since, as Mrs Fielding herself put it, when being cross-examined in the RBS action, “nobody knows what goes on behind closed doors”. I have been tempted to accede to this invitation; but I do not consider that it would be right for me to do so. Having immersed myself in the voluminous documents from the trial of the RBS action; having spent 4 ½ court days hearing oral evidence, and a total of 4 court days hearing oral submissions, in the present case; and having subsequently re-read the daily transcripts and the parties’ written submissions, I consider that it would be wrong for me simply to conclude that I cannot make a properly founded, and reasoned, conclusion as to what, on the balance of probabilities, Mrs Fielding is likely to have done had Lawrence Graham provided to her an appropriate letter of legal explanation and advice as to the terms of, and the security for, the short-term offshore funding that Mr Fielding had succeeded in negotiating on her behalf following his failure to secure permanent secured funding from RBS in an amount that was sufficient to repay Coutts & Co’s bridging loan. I therefore embark upon this task.

Had Mr Caplan, or a partner in the property department of Lawrence Graham, considered it appropriate to draft and despatch such a letter of explanation and advice to Mrs Fielding, I have no doubt that, if only as a matter of courtesy, and without any breach of duty to Mrs Fielding as the firm’s client, he (or she) would have informed Mr Fielding that such a letter was being despatched to his wife. (Indeed, Mr Livesey was prepared to acknowledge as much at section 3 (a) of his written reply.) This information would have given Mr Fielding the opportunity to intercept the letter before it was read by his wife (as, e.g. by telling her that she was to receive a purely formal letter from her solicitors, and that she should not trouble herself about it until he was available to assist her with it). Had Mr Caplan informed Mr Fielding that he proposed to speak to his wife by telephone and invite her to come in to the office and see him, I am entirely satisfied that Mr Fielding would have told Mr Caplan that she was far too busy preparing to move house and that he should communicate with her by letter, either by courier or by email; and that Mr Caplan would have done so. I am entirely satisfied that Mrs Fielding would not have read any letter from Lawrence Graham, whether sent to her by courier or by email, if she had been told not to do so by her husband. I accept that such a letter should properly have required Mrs Fielding to confirm to Lawrence Graham, in writing or by telephone, that she had read and understood its contents; and that she was content with both the substance of the transaction, and the form of the documentation, that were being proposed. However, I am left in no doubt that Mr Fielding, who had secured his wife's agreement and signature to the two letters of authority to Lawrence Graham of 22^nd June 2000, would have succeeded in securing such written confirmation from Mrs Fielding. On this footing, I have no doubt that matters would have proceeded exactly as they in fact did; and I therefore find that Lawrence Graham's breach of duty was not causative of any loss to Mrs Fielding. Lest I be wrong in this, however, I proceed to consider the hypothetical course of events on the footing, improbable though I conceive it to have been, that Mrs Fielding would have proceeded to read, and appreciate, the terms of Lawrence Graham's hypothetical letter of explanation and advice.

In this unlikely event, I have no doubt that Mrs Fielding's first action would have been to raise the matter with her husband. She may well, as Mr Livesey submits, have reacted strongly, even with outrage, to the discovery that RBS was claiming to be entitled to the bulk – initially £2.65 million, and then £2.51 million - of the sale proceeds of Hanover Terrace, and that, in consequence, she was being required to borrow £927,500 from offshore funders in Gibraltar on the security of her new home; but I have no doubt that she would not have approached Lawrence Graham, still less any other firm of solicitors, without first tackling her husband about it. I am also left in no doubt that there is no real or substantial chance that Mr Fielding would have revealed the family's true, straitened financial situation to his wife, still less the fact that he had been stealing funds from clients’ accounts; rather he would have sought to placate his wife because he would not have wished to do anything that might jeopardise his relationship either with her or with Lawrence Graham. In the light of Mr Fielding's considerable abilities - demonstrated over many years in his dealings with RBS - to string others along with false promises, and - as found by Hart J - to deceive, manipulate and control his wife, in my judgment the overwhelming probability, amounting to virtual certainty, is that he would have been successful in allaying his wife's concerns: he would have told her that they were merely experiencing short-term liquidity problems which were soon to be resolved by the receipt of substantial sums of money from the realisation of his interest in Minerva and/or from the offshore family trusts; and I am satisfied that Mrs Fielding would have wanted to believe him, and would have been persuaded to do so. Indeed, I am satisfied that this would have been the case even if Mrs Fielding had been alerted to the fact that some £3 million would still have remained due and owing to RBS on the joint account even after the sale of Hanover Terrace.

My judgment on this issue is supported by (1) the finding of Hart J (at paragraph 43 of his judgment) that Mrs Fielding “had at all times believed that, whatever the vicissitudes of Mr Fielding's commercial fortunes over the period, the family's fortunes were in the final analysis firmly founded on the rock of a multi-million pound fortune held on behalf of her and her children by the 1982 Jersey Trust”; and (2) the fact that, according to paragraph 17 of her July 2001 witness statement, as late as 5^th July 2001, a month after her husband's shattering confession of his criminal dishonesty and their consequent flight to Florida early in June 2001, Mrs Fielding had still trusted her husband to tell her the truth, and had allowed him to provide instructions on her behalf to her own solicitors, Clifford Harris & Co, in response to the freezing injunction that had been obtained by RBS. In my judgment, Mr Fielding would also have pointed out to his wife that she was contractually committed to complete the sale of Hanover Terrace on 23^rd June 2000, that any delay in completion would have serious financial implications for both of them, and that she should trust him - just as she had always done - to sort matters out satisfactorily in the best interests of the family. In my judgment, there is no real or substantial chance that Mr Fielding would have adopted any other stance. In my judgment also, and on the balance of probabilities, Mrs Fielding would have gone along with what her husband was proposing; and she would have provided the confirmation for which Lawrence Graham were looking from her. I find that Mrs Fielding would not have considered that there was any other course of action that was realistically available to her.

Lest I be wrong in this, however, I proceed to consider how matters might have developed had Mrs Fielding adopted the unlikely option of rejecting the course which her husband would undoubtedly have urged upon her. In my judgment, this unlikely scenario would only have come about on the footing that her trust and confidence in her husband had completely evaporated. In this event, Mrs Fielding would be likely to have gone to independent solicitors, who would have advised her that she was contractually obliged to complete the sale of Hanover Terrace on 23^rd June 2000; and that whilst time was not then of the essence of completion, it could be made so by the purchasers serving a notice to complete, which would have the effect of placing her in fundamental breach of contract if she did not then complete within 10 working days. It would no doubt be pointed out to her that it would be in her own best interests to complete the sale of Hanover Terrace at the advantageous sale price of £3 million; but that this would require the co-operation of RBS, who undoubtedly had the benefit of a valid, and, on any view, at least a partly enforceable, legal charge over that property, and who would need to provide a completed form DS1 in order to enable any sale to complete; and that, even if Coutts & Co might not be able to intervene to prevent that sale from proceeding to completion, she would still remain liable to them for the bridging finance that they had provided in a sum in the order of £1.25 million. In view of the still uncompleted works of refurbishment, and the valuation that had then been placed upon Cumberland Terrace, Mrs Fielding would be told that it might be difficult to reach any agreement to secure that debt on Cumberland Terrace; but that, even if it should prove possible to reduce the bridging loan by recourse to Mrs Fielding's own £300,000 savings, and to secure the reduced liability on Cumberland Terrace, Mrs Fielding would then have the problem that she would have no income with which she, personally, could service the secured indebtedness; and that the ability of her husband to do so would be likely to become highly questionable if his position with RBS and/or with Lawrence Graham were to be jeopardised by Mrs Fielding either seeking to challenge the extent of RBS’s security over Hanover Terrace and/or taking any step which might expose Lawrence Graham to the claim that they were in breach of their undertaking to Coutts & Co. It is a matter of some speculation as to what action Mrs Fielding might have taken had she received such advice, particularly since I have not had the benefit of hearing any evidence from Mrs Fielding on the point; but, doing the best I can, in my judgment the probability is that she would have backed down and sought to patch matters up with her husband by completing the sale of Hanover Terrace, and the refinancing of Cumberland Terrace, on the terms that he had already negotiated. On the balance of probabilities, I do not consider that she would have approached RBS and sought to negotiate some other deal with that bank.

Lest I be wrong in this, however, I proceed to consider how matters might have developed in the unlikely event that Mrs Fielding had decided to approach RBS. In my judgment, this unlikely scenario would only have come about on the footing that both (1) her trust and confidence in her husband had been completely, and irredeemably, shattered by her discovery of the true state of the family’s financial affairs and (2) as stated in paragraph 22 of her July 2001 witness statement, she had formed the clear view that the RBS claim was not only bad but was also “fundamentally dishonest”. In this event, the probability is that any approach to RBS would have involved Mrs Fielding in challenging RBS's entitlement to anything more than the £510,000 that was admittedly due and owing to it on the Fieldings’ loan account; and, in addition, she might also have been seeking to set-off against this sum, and/or to recover from RBS, some or all of the £1.6 million that, in her counterclaim in the RBS action, she was to allege that RBS had misapplied towards the partial repayment of Mr Fielding's indebtedness from moneys that had really belonged to her. Had this been the stance adopted by Mrs Fielding, then, on the basis of Mr Ballard's evidence, he would have resisted it; and, in my judgment, he would have inevitably taken a firm line with her. On this footing, and consistently with the evidence of both Mr Ballard and Mr Sach, I am satisfied that there is no real or substantial chance that RBS might have formulated any settlement proposal at all to put to Mrs Fielding or her lawyers, at least in the short to medium term.

On this scenario, and with Mrs Fielding continuing to resist the payment of the additional £2 million which RBS had been looking to receive from the sale of Hanover Terrace, Mr Fielding's position with RBS would rapidly have become more and more untenable; and, in consequence, with the inevitable threat, and then the reality, of bankruptcy proceedings against him, combined with the likely discovery of the deceit that he had been practising upon RBS in relation to his discontinued legal proceedings in relation to the Minerva shares, so too would Mr Fielding’s position within Lawrence Graham. This, in its turn, would almost certainly have precipitated the discovery of Mr Fielding’s thefts from his firm’s clients’ accounts. At this point, I consider that it is inevitable that the positions of both Mrs Fielding and the bank would have become firmly, and irremediably, entrenched: without any perceived financial recourse to Mr Fielding, both parties would have been looking to retain, or to recover, as much as they possibly could from the collapse of the Fieldings’ family fortunes. In my judgment, the positions of the two would have been poles apart, just as they were on the eve of what was effectively the first day of the trial of the RBS action before Hart J. In the medium to longer term, as in the short to medium term, I am satisfied that there is no real or substantial chance that RBS might have formulated and put forward to Mrs Fielding, or her lawyers, any settlement proposal that would have been remotely acceptable to her.

Lest I be wrong in the foregoing analysis, however, I proceed to consider how matters might have developed in the inconceivable event that RBS might have been minded to put forward some offer of settlement to Mrs Fielding. The claimant’s solicitors’ letter before action of 27^th April 2006 expressed her clear view that RBS could not have been persuaded to accept less than £2.51 million out of the sale proceeds of Hanover Terrace. If I accept Mr Sach's evidence, this was indeed RBS’s bottom-line figure. I am entirely satisfied that, if such a figure had been proposed by RBS, it would never have been accepted by Mrs Fielding. I ask rhetorically: what would she have stood to gain from settling with RBS for £2.51 million if, as she asserted in the RBS action, it was her belief that RBS’s claim was not a good one, but was fundamentally dishonest. She would have been giving up £2 million of her own money, which she did not believe that she owed RBS, in return for it releasing her from an alleged indebtedness of £3 million, which she also did not believe that she owed. She would have received £490,000 from the sale of Hanover Terrace; but, after paying the agents’ fees, she would have been left with only some £370,000 towards Coutts & Co’s bridging loan of £1,250,000. On the basis of Savills’ valuation, this would have left her owing Coutts & Co more than Cumberland Terrace was worth, so that her only remaining free asset would have been her own savings of £300,000. She would have had no other source of income apart from her (ex hypothesi, now estranged) husband. In my judgment, and on the overwhelming balance of probabilities, I am satisfied that Mrs Fielding would have felt that she was gaining far too little, and losing far too much, by accepting RBS’s supposed bottom-line figure of £2.51 million; and that she would have rejected any settlement proposal at that level. None of the factors identified by Mr Livesey at, for example, paragraphs 99-100 of his written opening, persuades me to the conclusion that “it would not have been unrealistic for Mrs Fielding to accept a compromise with RBS on the basis that she would pay £2.51 million of the proceeds of Hanover Terrace to RBS, but would have been relieved of any further liability on the Joint Account”.

However, I am satisfied that there is no real or substantial chance that RBS might have been prepared either to accept, or to offer to accept, as little as £2.51 million from Mrs Fielding in return for the release of the balance of her indebtedness to the bank. In his witness statement, Mr Sach indicated that he doubted whether RBS would have been happy to settle for less than, say, 50% of Mrs Fielding’s personal savings of £300,000, in addition to the £2.51 million from the sale proceeds of Hanover Terrace; and, if anything, that position became clearer, and more entrenched, in the course of Mr Sach’s oral evidence. (During the course of the oral evidence, it also became apparent that any settlement with Mrs Fielding would also have been made conditional upon the full disclosure by her of all of her assets and liabilities; and any settlement agreement would have included provision for RBS to be entitled to have further recourse against Mrs Fielding if, and to the extent that, such disclosure might prove to have been incomplete.) Even apart from the indications from Mr Sach’s own evidence, however, an analysis of the other evidence in the case leads me to conclude that there is no real or substantial chance that the receipt of £2.51 million might indeed have represented RBS’s bottom line settlement figure.

From the emails within RBS’s files, it is apparent that, on the morning of 22^nd June 2000, Mr Ballard had been persuaded to succumb to Mr Fielding’s plea to increase the amount to be allowed to Coutts & Co out of the sale proceeds of Hanover Terrace from £300,000 to £440,000. (In fact, Mr Fielding had been lying to Mr Ballard about the amount that would be paid to Coutts & Co from the sale proceeds because, since the agents’ fees were almost £120,000, rather than the £50,000 that he had reported to Mr Ballard, only just over £370,000 would be available for Coutts & Co.) If, only shortly thereafter, Mrs Fielding had approached RBS, out of the blue, and on the eve of completion, asserting that it should forego another £2 million from the sale proceeds of the home which represented the Fieldings’ only immediately realisable asset - one which, for many months past, it had been pressing Mr Fielding, with every appearance of success, to sell in order to generate some free cash in order to repay part of the substantial, and long outstanding, debts which they owed to RBS - Mr Ballard’s reaction would have been one of utter astonishment and disbelief. He would have viewed such an approach with the utmost suspicion; and his suspicions would have increased as Mrs Fielding’s attitude and position became clearer.

Mr Ballard would have suspected that Mrs Fielding’s actions were being orchestrated by her husband. He would have wondered what game they were playing. It is most unlikely that it would ever have occurred to Mr Ballard to propose to Mrs Fielding, or to her solicitors, that RBS should accept £2.51 million in return for the release of her outstanding debts to the bank, particularly as this figure postulated a payment of £440,000 to Coutts & Co of which almost £70,000 was founded upon a lie. Why should Mr Ballard even begin to think that a settlement which would require Mrs Fielding to pay £2.51 million to RBS might be of any interest to her in circumstances where she was asserting that she only owed RBS £510,000, and where a settlement at that level would leave her with savings of only £300,000 and an outstanding indebtedness to Coutts & Co in excess of the valuation that Savills had placed upon Cumberland Terrace? On the basis of what was being presented to him, Mr Ballard could not conceivably imagine that such an offer would be of the remotest interest to Mrs Fielding. The only basis upon which it would occur to Mr Ballard that such an offer might conceivably be of any interest to her would be if she were indeed acting in collusion with her husband, so as to deny to RBS the recovery of moneys that might otherwise be available to the bank: it would only be of any real value to Mrs Fielding to secure the remission of some £3 million of debt if she in fact possessed some asset or assets of value against which RBS might be able to enforce her liability to itself; but those would be the very circumstances in which RBS would wish, not to release Mrs Fielding from any further liability, but rather to keep her on the bank’s hook. Just as Mr Ballard was not prepared to exclude entirely from his mind the potential value of the Minerva claim, so, too, would he have refused to dismiss Mrs Fielding as an actual, or potential, repository of Mr Fielding’s assets, and thus as a potential source of recovery. I reject Mr Livesey’s submission that RBS would, or might, have perceived there to be no real prejudice to itself in agreeing not to sue Mrs Fielding in return for £2.51 million from the sale proceeds of Hanover Terrace. I also reject his submission that RBS might have been prepared to reach such an accommodation with Mrs Fielding in order to avoid antagonising her husband: in the circumstances in which any such accommodation might have fallen to be considered by RBS, it would no longer have been concerned about any risk of antagonising Mr Fielding, or about retaining his goodwill.

For all of these reasons, I conclude that there is no real or substantial chance that RBS might ever have viewed the receipt of as little as £2.51 million as representing its bottom line figure. Since I am satisfied, on the balance of probabilities, that Mrs Fielding would not have agreed to pay as much as £2.51 million to RBS in settlement of its claims against her, it is unnecessary for me to speculate upon how much more than the sum of £2.51 million might have been viewed by RBS as constituting an acceptable bottom line figure. I am entirely satisfied, from Mr Sach’s evidence, that RBS would have been looking to receive at least half, and probably substantially more, of Mrs Fielding’s personal savings. I am also entirely satisfied that RBS would have wanted to know precisely how all of the finance raised from Coutts & Co had been spent; and, to the extent that it had not been expended upon Cumberland Terrace, it would have been looking for a satisfactory explanation for, and to recover, such expenditure. Since it would appear that in April 2000 some £220,000 from the moneys advanced by Coutts & Co had been paid to one of her sons and his wife, this may well have constituted a further obstacle to any settlement between Mrs Fielding and RBS.

Such a conclusion is entirely consistent with the attitude demonstrated by RBS throughout the course both of its litigation with Mrs Fielding, and of her subsequent bankruptcy. Having expended some hundreds of thousands of pounds in the pursuit both of Mrs Fielding and of any assets which she may have – a search which, from RBS’s perspective, is still continuing - I am now invited to accept that there is a real and substantial chance that, only 12 months before it embarked upon that course of action, RBS would effectively have foregone the claims that, for the past 7 years, it has been pressing so hard, and at such expense, against her. I am invited to accept that this is all explicable by reference to the substantial shift in the bank’s attitudes, and perceptions, that followed on from the disclosure of Mr Fielding’s gross, and persistent, criminally dishonest activities, and the suspicions which Mrs Fielding’s flight with him to Florida, and the subsequent marketing of her house by its offshore funders, aroused on the part of RBS. I am reminded of the need to avoid the unreasoned application of hindsight; and urged to accept that what RBS did, in dramatically different circumstances, a year later and beyond, is of only limited relevance to the hypothetical situation that would have pertained in 2000, and needs to be considered in that light. I bear all of these factors, so eloquently and forcefully pressed upon me by Mr Livesey, firmly in mind. Nevertheless, I cannot discount the point, so equally clearly and forcefully expressed by Briggs J in Lexi Holdings (cited above), that actions speak louder than words, particularly where the words are spoken about hypothetical actions, with the benefit of hindsight, and by persons with their present, or former, employer’s agenda to advance. For the reasons I have already given when reviewing their evidence, I consider that the evidence of both Mr Sach and Mr Wilson is particularly vulnerable to criticism and challenge upon this score.

For all of these reasons, I am satisfied that Lawrence Graham’s limited breach of duty was not causative of any loss to Mrs Fielding; and this claim is therefore dismissed. I arrive at this conclusion without any measure of regret. This was always a cheeky claim which, although maintainable in law, was never going to provoke much sympathy from the court. In the event, the claim fails on its facts.