Pritchard Joyce & Hinds v Batcup & Anor

Progress with the potential claim against LL remained painfully slow. This may have been at least partly because Wellers became concerned about whether they should continue to act in the light of Mr. Fox’s complaints about their handling of the Hanson action (see para. 58 above). However, at a meeting on 6^th February 1995 Mr. Simister and Mr. Fox discussed the LL claim, among other matters, and in particular a note prepared by Mr. Fox headed “Negligence Action against Lindars Leech Solicitors - Matters for the Statement of Claim”. This identified four heads of claim. Nos. 2 and 3 were the familiar claims for the loss of the amount secured by the Mareva and Mr. Fox’s liability for costs to the Hanson defendants; and no. 4 was a general claim for damages for distress. But head 1 was described as:

That Mr. Fox understood that there was a limitation difficulty about the lost settlement claim is confirmed by a letter which he wrote to Wellers the following day. He referred to the fact that at the end of the meeting he had specified £200,000 as the minimum amount that he expected to receive from LL. He then said:

The language of Mr. Simister’s note of the meeting of 6^th February is ambiguous as to whether Mr. Fox was already aware of the limitation problem about the lost settlement claim or whether Mr. Simister pointed it out to him. The latter seems to me more likely, since, as has appeared from the foregoing narrative, there is no record of Mr. Fox having previously been given any advice about the limitation period applicable to such a claim; and it might be thought that he would not have included the claim in his note if he had believed it to be statute-barred (though that is by no means certain). Even, however, if the note is to be read as meaning that Mr. Fox was already alive to the limitation difficulty, it does not follow that he must have previously received specific advice on the question. He had had a good deal of advice on the limitation issues affecting other claims, and he would have been perfectly capable of applying the relevant principles for himself.

On 30^th June 1995 Wellers sent instructions to Mr. Batcup to settle a general indorsement for a writ against LL or (in view of the dissolution of the partnership) the partners as individuals, together with a draft Statement of Claim and an “Opinion on the extent of the claims, if any, which can be made against Alan Leech/Lindars Leech”. It was believed – apparently preferring Mr. Batcup’s advice in conference to his advice in writing – that time might have started to run on 21^st July 1989. The instructions included the “Matters for Statement of Claim” document discussed at para. 62 above. They also included “an unsigned statement from Mr. Fox which confirms how the financial settlement of the claim against Rey/Hanson came to be refused, upon the advice of Mr. Leech in late 1985”. This was a two-page document, clearly drafted by Mr. Fox himself, giving a rather fuller account of the events of October 1985 than had previously been given in the ten-page note or the document supplied to Mr. Wadsworth, though along similar lines. Like those, it did not make any explicit allegation of negligence. There is however a clearly detectable undercurrent of criticism, partly to the effect that Mr. Leech had been over-emphatic and overbearing in his advice but partly again to the effect that he had made promises about how he would proceed if the settlement did not go ahead on which he then failed to deliver. Although the Instructions did not explicitly ask Mr. Batcup to consider including in the writ, or to advise on, a claim that Mr. Leech gave negligent advice which resulted in the settlement being lost, I think that such a request could clearly be inferred from the terms of those enclosures, and most particularly from head 1 of “Matters for Statement of Claim”. The events of October 1985 were not of course new to Mr. Batcup, and even though he might not previously have understood them to be within the scope of his instructions it should not have been a complete surprise to him to see the question which Mr. Fox had raised with Mr. Wadsworth being raised again with him. There had in fact been some previous discussion between Mr. Batcup and Mr. Simister about what he needed to be sent, and a note made by Mr. Simister on 15^th June records Mr. Batcup asking for “confirmation of the advice as to the settlement which Mr. Fox refused”. By one route or another, therefore, Mr. Batcup plainly understood that the lost settlement claim now came within the scope of his instructions.

Mr. Batcup duly drafted a general indorsement in the following terms:

A writ in those terms was issued against both LL as a firm and Mr. Leech as an individual on 19^th July 1995. Both Mr. and Mrs. Fox were plaintiffs.

Mr. Batcup was asked to produce a draft Statement of Claim and an opinion on the merits. He asked for a conference, which took place on 17^th October 1995. The note of the conference is not very clear, but it seems that Mr. Batcup asked for further documentation, including in relation to the events of October 1985. The documents were not supplied until 29^th March 1996: it is not clear exactly what they consisted of. As discussed below, a draft Statement of Claim was eventually provided in May 1996, but by that time Wellers had effectively ceased to act. The Solicitors Indemnity Fund (“SIF”), as LL’s insurers, had been informed of the issue of the writ and had indicated that they were willing to grant the extensions necessary for a full Statement of Claim to be pleaded.

APRIL 1996 - MAY 1999: PRITCHARD JOYCE & HINDS

As already mentioned, Wellers had for some time been concerned whether they could continue to act for Mr. Fox in view of the allegations which he was making about their conduct of the Hanson action. In May 1995 Mr. Gavin Hamilton of counsel had advised them that they should not; but it was agreed that in the interests of continuity they should remain instructed in the LL action until a writ had been issued and counsel had drafted a Statement of Claim. In August 1995 Mr. Fox asked PJH to accept instructions in the action against LL, but they indicated that they could not do so until legal aid was transferred, and it was confirmed that they should come into the case once the Statement of Claim had been drafted. In the event, no doubt because that took so much longer than had been anticipated, they took over somewhat sooner. Ms. Ispani of PJH attended a conference with Mr. Batcup and Mr. Fox on 25^th April 1996, although Wellers remained involved for hand-over purposes and a formal transfer of the papers does not appear to have taken place until 19^th May. Once the transfer occurred, conduct of the case was in the hands of Ms. Hartwell of PJH, who although she was herself a partner discussed the case on a regular basis with a more senior partner, Mr. Hinds.

I should mention here that PJH instructed Mr. David Matthias of counsel to advise on possible action against Wellers. He saw Mr. Fox and Ms. Hartwell in conference on 14^th December 1995 and 23^rd January 1996 and advised about the possibility of a claim arising out of Wellers’ conduct of the Hanson action: he advised that it would only be possible to get legal aid for such a claim if leading counsel could be found who would contradict Mr. Wadsworth’s negative advice about the merits of the Hanson action. He was not asked to, and did not, advise about their handling of any potential claims against LL (though he confirmed that it would be inappropriate for Wellers to continue to act in that action). No proceedings were ever commenced against Wellers in relation to the Hanson action.

It is, again, convenient to divide the narrative into two periods. The time limit for a potential claim against Wellers for failing to advise on the limit applying to the lost settlement claim expired at the end of October 1997. Thus the crucial period from the point of view of liability is between April 1996 and that date. Events after October 1997 are not directly material, but they remain relevant in so far as they cast light on the understanding of the parties in the earlier period.

As noted above, Mr. Batcup had a further conference with Mr. Fox on 25^th April 1996 to assist him in the drafting of the Statement of Claim. It appears from the note taken by Ms. Ispani that Mr. Fox covered, along with much else, the advice which he received from Mr. Leech in October 1985; and immediately after the conference he sent Mr. Batcup and PJH a witness statement from Mrs. Fox about her telephone conversation with Mr. Leech on 16^th October 1985.

On 7^th May 1996 Mr. Batcup supplied a draft Statement of Claim accompanied by an Advice. The Advice did not, however, address the merits of the claim but was essentially confined to advising that the case merited the extension of legal aid for leading counsel to be instructed. A Statement of Claim conforming to his draft was served shortly afterwards.

The Statement of Claim was arranged (after some introductory paragraphs) under two heads – “the Fontana Action”, at paras. 7-22, and “the Hanson action” at paras. 23-44. I need not give any details of the matters pleaded under the latter head. As regards the former, the course followed by Mr. Batcup was as follows:

At paras. 7-11 he pleaded the history of the Fontana action up to the service of the Defence.

At para. 12 he referred in fairly general terms to the negotiations between SLP and TSW and the conclusion of a draft Agreement (to which it was said that the Plaintiffs would refer at trial). The sums payable under the Agreement – totalling £445,000 – were pleaded.

Paras. 13-15 were in the following terms:

On the 15 October 1985 the First Plaintiff consulted the First Defendant for a second opinion as to the terms of the proposed Agreement and was advised in the clearest possible terms by the Defendant not to sign it. The Second Plaintiff was telephoned by the First Defendant during the course of the said meeting and given the same advice. The First Defendant represented he had years of experience with dealing with a man called Mr Rey and his associates, who ultimately controlled Fontana, and was aware of the tactics they might use to avoid payments under the proposed Agreement.

The First Defendant further advised the Plaintiffs that he was experienced in dealing with Mr Hanson, that he had experience in litigating against Mr Rey, who he described as a dishonest man, and that they would be intimidated by his approach. He advised he might be more experienced in dealing with these people that the person who had been handling their affairs.

The First Defendant drafted a letter dated 16 October 1985 for the First Plaintiff to send to SLP, requesting that the matter should be transferred to the First Defendant and the Second Defendant. SLP agreed and the Second Defendant thereafter took over representing the Plaintiffs.

Para. 16 pleaded the legal aid position.

At paras. 17-21 Mr. Batcup set out the subsequent history of the Fontana action culminating in the loss of the Mareva injunction, which rendered the further pursuit of the proceedings futile.

Para. 22 made a general allegation of breach, supported by the following Particulars:

There was considerable debate before me as to whether, or in what sense, that pleading raised the lost settlement claim as defined at para. 44 above. This is not straightforward. The structure of the pleading is somewhat disjointed. Paras. 13-15 set out in some detail the advice which Mr. Leech is said to have given, and it would be natural to expect that they were leading up to an averment that that advice was negligent. But there is no such pleading in the Particulars of Negligence at para. 22. The nearest approach to it is sub-para. (v). That, however, is not an allegation that the pleaded advice was negligent but that it was negligent to “continue” to advise against settlement: no averment of any such continuing advice is in fact pleaded, but in any event it does not appear to be a reference to October 1985. Rather, the thrust of the sub-paragraph appears to be that Mr. Leech failed, having advised Mr. Fox against accepting the original settlement, to obtain a better one: this echoes Mr. Fox’s approach in the ten-page note (cf. para. 48 above). Further, although para. 45 (ii) pleads the “loss of £445,000 in settlement of the … Fontana action”, there is no pleading of how or when that loss occurred: neither any rejection of the offer by Mr. Fox or LL nor the withdrawal by TSW is pleaded. Presumably some connection is to be inferred between the breach of duty pleaded at para. 22 (v) and the pleaded loss of the settlement, but what that connection might be is left unstated. There is an additional oddity, namely that, to the extent that the lost settlement claim is pleaded at all, it is treated as an aspect of “the Fontana action”, whereas if the £445,000 had indeed been paid the lion’s share would have represented the value of the claims subsequently advanced in the Hanson action. Mr. Batcup in his evidence before me emphasised that he had structured the pleading in the way that he had advisedly.

I do not believe that the Statement of Claim raised, or was intended by Mr. Batcup to raise, an overt claim that the advice given by Mr. Leech in October 1985 was negligent, or that the settlement offer represented by the draft Agreement was lost as a result of that negligent advice. I believe that Mr. Batcup intended only overtly to plead a claim along the lines of the ten-page note - that is that, having advised Mr. Fox to reject the offer, Mr. Leech was under a duty to achieve a better result by progressing both the Fontana and Hanson actions, and that he failed to do so. That pleading may not be entirely logical, since Mr. Leech would have been under a duty to handle both claims competently whether or not he had advised rejection of a settlement previously offered, but one can see how, that fact might be said, at least rhetorically, in some way to intensify his obligations. And the “lost” amount of the offer would remain relevant on this basis as a measure of the amount lost by LL’s negligence.

However, Mr. Batcup would – and in any event certainly should – have been aware that the case as so pleaded fell short of the claim that Mr. Fox wished to advance, i.e. a case of negligent advice in October 1985 leading to the loss of the offer at that time. That would (or should) have been apparent to him from head 1 of Mr. Fox’s “Matters for Statement of Claim” note, possibly reinforced by the further discussion in the two conferences which he had had (see paras. 68 and 72 above); and such a claim was indeed made in the general indorsement. He would of course also have been aware that any such claim was prima facie statute-barred. It is true that he had never clearly been asked to advise on that question, nor had he done so; but the point was as plain as a pikestaff. In my view the explanation for the somewhat fuzzy formulation of the pleading is that Mr. Batcup had decided that to plead the lost settlement claim in overt terms would inevitably flag up that it was statute-barred, but that he could in practical terms keep it in play by pleading the essential facts as if they were material to a loss which continued beyond July 1989: that is indeed broadly the explanation that he himself gives in his first witness statement (see para. 38) and repeated in cross-examination. It is clear from the various contemporary attendance notes that Mr. Batcup was, entirely reasonably, expecting SIF to make an offer at a fairly early stage; and it was avowedly his tactic to plead the case as widely as possible, in the knowledge that parts might have to be jettisoned in due course. It was particularly important to advance a claim to the £445,000 if at all possible, since the other quantified elements in the claim amounted to less than half that amount.

A Defence on behalf of Mr. Leech was served by Wansbroughs Willey Hargrave (“WWH”), instructed by SIF, on 11^th September 1996. Mr. Lindars, the other partner in LL at the material time, had not been served, and the Defence was accordingly only served on behalf of Mr. Leech. Wholly unsurprisingly, para. 1 of the Defence pleaded that any cause of action arising prior to 19^th July 1989 was statute-barred. It appears that WWH had had at least some instructions from Mr. Leech. The averments in paras. 12-15 of the Statement of Claim were pleaded to with some particularity. Among other things, it was denied that Mr. Leech had advised Mr. Fox “in the clearest possible terms” not to sign. Those advising Mr. Leech seem to have taken the view, whatever the obscurities of the Statement of Claim, that his advice in October 1985 was being alleged to have been negligent: it was positively averred in the Defence that the advice was correct and, further, that Mr. Fox had decided to reject it in any event because he put the value of his claim at between £1m. and £2m.

On 11^th September 1996 Ms. Hartwell had a preliminary discussion of the Defence with Mr. Fox. According to her note, he told her that he was not troubled by the limitation defence because counsel had already advised “in the clearest possible terms” that his claim was not statute-barred. Mr. Fox can only have been referring to Mr. Batcup’s advice in February and March 1994: see paras. 60-61 above. As I have there made clear, that advice did not relate to the lost settlement claim. Either Mr. Fox had forgotten that or he was referring only to the claims for mishandling the Fontana and Hanson actions – which, after all, were the only claims clearly pleaded. He had of course as recently as the previous year acknowledged the limitation difficulty relating to any claim for the loss of the settlement in October 1985 (see para. 63 above).

On 19^th September 1996 Ms. Hartwell and Mr. Fox had a further meeting to discuss the terms of the Defence in detail. In commenting on para. 11 of the Defence, which made it clear that LL had seen a version of the draft Agreement which referred to the involvement of SV, Mr. Fox said that “until relatively recently” he had only been aware of “the original draft” – i.e. the draft providing for the bills to be guaranteed by UBI – and that although he now realised that Mr. Lines had negotiated a “second draft” with Mr. Thomas and had sent that draft to LL, neither Mr. Lines nor Mr. Leech had informed him of those changes or sent him the draft. He said that, “having now seen the second draft of the Agreement, both Mr. and Mrs. Fox felt that they would have accepted the same with the amendments which had been incorporated”. (Footnote: ⁴) Mr. Leech, he said, had never advised him on the second draft. This was simply wrong. As set out at paras. 16-20 above, Mr. Fox was kept fully in the picture by Mr. Lines, who had sent him both the “third” draft Agreement as settled by Mr. Grey (Footnote: ⁵) and the “fourth” version, being the version of the third draft annotated following his later conversation with Mr. Thomas; and it was indeed Mr. Fox who had supplied both versions to Mr. Leech. There is no reason to believe that Mr. Fox was deliberately telling an untruth: it would be wholly unsurprising if, almost fourteen years later, he had forgotten the precise sequence of events.

On 30^th September 1996 Ms. Hartwell sent Instructions to Mr. Batcup to draft a Reply. These enclosed Ms. Hartwell’s attendance note of the instructions obtained from Mr. Fox. The body of the Instructions drew attention specifically to what Mr. Fox said about not having seen a copy of the revised draft: Ms. Hartwell had not at that point analysed the documents to see whether they supported what she was being told. The instructions also enclosed a copy of Mr. Batcup’s advice of 25^th March 1994 on (aspects of) the limitation issue (see para. 61 above).

Mr. Batcup was engaged in a trial outside London at the time, but WWH were unwilling to grant any long extension. In the event, he had to consider the papers and provide a draft overnight. The Reply as so drafted was served on 23^rd October 1996. Two substantive answers to the limitation point were pleaded:

It was averred that Mr. Fox did not have the necessary knowledge for the purpose of s. 14A of the Limitation Act 1980 until after 19^th July 1989.

Mr. Batcup pleaded s. 32 (1) (b) and (c) of the 1980 Act – i.e. deliberate concealment and mistake.

Although Ms. Carr submitted that Mr. Batcup’s decision to plead each of these points betrayed an inadequate understanding of the relevant law and was indeed (because it involved an allegation of bad faith against Mr. Leech for which he had insufficient support) unprofessional, I need not for present purposes decide whether those criticisms are well-founded. The important question is what the formulation of the Reply shows about Mr. Batcup’s understanding of the claim and about the limitation position. As a matter of strict pleading the Reply could not raise any new claim: it did, and could do, no more than aver matters relevant by way of answer to the limitation defence. But the very fact that Mr. Batcup pleaded the matters which he did necessarily implies that he believed that there was a claim in respect of which it was arguable that time expired before 19^th July 1989: otherwise the whole pleading was redundant. In fact, because of the way in which the Statement of Claim had been pleaded (as discussed above), what that vulnerable claim was is nowhere explicitly stated. But given that, by definition, it was a claim where the loss had crystallised before 19^th July 1989, it could only in practice be a claim for negligent advice leading to the “loss” of the settlement offer at some point prior to that date; and, although no date for that loss was pleaded it could only have occurred at the date when the offer was withdrawn or rejected. That analysis is indeed confirmed by the terms of para. 4 of the Reply, which pleads that Mr. Leech’s concealment of the revised draft had denied Mr. and Mrs. Fox the opportunity to accept the offer (which can only be a reference to late October 1985). Accordingly, therefore, the terms of the Reply confirm that Mr. Batcup was in late 1996 hoping, by one means or another and despite the absence of any explicit pleading, to advance the lost settlement claim: he appreciated that that claim was prima facie statute-barred, but it now appeared that there was a possible answer to the limitation defence.

It should be noted that Mr. Fox’s instructions about the concealment of the revised draft of the Agreement not only, if they were right, gave a possible answer to the limitation defence but reinforced the primary claim. The alleged concealment of the revised draft would be either a breach of duty in its own right or in any event a further particular of a general allegation of negligent advice. It had not been formally pleaded as such, but it was at least now pleaded as a fact, which might make it more difficult for LL later to complain about the absence of any proper pleading in the Statement of Claim. That said, the lost settlement claim was advanced long before those instructions were given and was not dependent on them.

WWH had also served a Request for Further and Better Particulars. Ms. Hartwell drafted the response herself, without reference to Mr. Batcup. It was served on 15^th November 1996. She, like Mr. Batcup in the Reply, relied on Mr. Fox’s instructions about not having seen the revised draft of the Agreement. In response to request 3 - which asked, in relation to sub-para (ii) of the Particulars under para. 22 of the Statement of Claim, what steps it was said that Mr. Leech should have taken - she pleaded (at 3.3) as follows:

Whether or not Ms. Hartwell so understood it, the particulars under Request 3 were in practice for the first time explicitly alleging a breach of duty by LL in October 1985; and, although this was not quite explicit, the particulars under Request 26 implied a loss crystallising at or about that time. They went some way therefore to repairing the deficiencies of the Statement of Claim, though it would have been open to Mr. Leech to object that they were not so much a particularisation of the existing pleading as a fresh head of negligence.

On 30^th April 1997 WWH informed PJH that they proposed to apply to strike out those parts of the Statement of Claim which were statute-barred. By letter dated 15^th May PJH asked Mr. Batcup to advise whether the views on limitation expressed in his Advice of 24^th March 1994 remained unchanged. This formulation reflected a failure on the part of Ms. Hartwell to appreciate that that Advice had not dealt with the totality of the matters sought to be covered (albeit rather unsatisfactorily) in the pleadings now served on behalf of Mr. Fox. There was a preliminary telephone discussion on 16^th May between Ms. Hartwell and Mr. Batcup. Ms. Hartwell’s note contains a record of Mr. Batcup saying:

It was not until 16^th July 1997 that WWH made good on their threat to issue a summons, which in the event applied not for a strike-out but for a preliminary issue on the question of limitation. The supporting affidavit proceeded on the basis that part of the pleaded case against Mr. Leech was a claim of negligent advice in October 1985 leading to the loss of the settlement offer; and it was pointed out that the offer was withdrawn on 28^th October 1985. As in the Defence, therefore, WWH clearly understood Mr. and Mrs. Fox, notwithstanding the opacity of their pleadings, to be advancing the lost settlement claim.

PJH obtained authority from the legal aid board to instruct Mr. Susman to resist the application for a preliminary issue. (This seems to have been on Mr. Batcup’s recommendation: Mr. Susman had been his pupil-master.)

Mr. Susman advised in consultation on 22^nd August 1997. There survive both his own note made in preparation for the consultation (though possibly subject to some limited revision following it) and Ms. Hartwell’s note. It is not possible – but, fortunately, nor is it necessary - to reconstruct from these every detail of his advice. It is right to bear in mind that the main focus of the consultation was Mr. Leech’s pending application rather than the ultimate prospects of the action, and definitive advice on the merits was not required: Mr. Susman had indeed not been sent the full papers available to PJH. Subject to that, I need to note the following points:

It seems, in particular from Mr. Susman’s note, that he understood the “essence” of the claims pleaded at paras. 7-22 of the Statement of Claim to be that “the Defendant was instructed because he indicated that he could procure a better offer, but he failed to do so, and failed to progress the action at all”. That of course broadly reflects my own analysis of the pleading (see para. 76 above): it does not cover any claim that Mr. Leech’s advice in October 1985 was itself negligent. His advice was that the claim as so understood ought not to be held to be statute-barred because damage would not crystallise until the Fontana and/or Hanson actions collapsed.

It seems, however, that Mr. Susman at least considered the possibility of a claim based on negligent advice in October 1985. He is recorded in Ms. Hartwell’s note of the consultation as saying:

Ms. Hartwell also notes someone – apparently either Mr. Susman or Mr. Batcup – saying:

There was some discussion of the terms of the settlement offer made by the Hanson interests in October 1985 and of the different drafts. The discussion was in the context of the “knowledge” and s. 32 answers to the limitation point pleaded in the Reply. The note is not explicit as to what the cause of action which those answers might or might not “save” was understood to be.

Mr. Susman is recorded in Ms. Hartwell’s note as giving his view that there was a “good claim for £70k – but highly speculative [claim] for the alleged half a million”. The “half a million” is a reference to the £445,000 settlement offer. Read by itself that need not be a reference to the lost settlement claim, since the settlement amount had been pleaded by Mr. Batcup as a measure of the value of the lost Fontana action; but in the context of the earlier references it seems more likely that the lost settlement claim was being referred to. If so, the note does not state why Mr. Susman described it as “speculative”; but the most obvious problem about it was that it was prima facie statute-barred, and Mr. Susman had not been asked, or put in a position, to advise definitively on the merits of the claim.

Mr. Susman advised that he expected that the application for a preliminary issue on limitation would be refused. The broad tactic was both to attempt to show that there was no good limitation defence but also to demonstrate that, even if such a defence was arguable in respect of part of the claim, that there would be no saving in time in having that issue determined separately.

Following the consultation, Mr. Susman drafted an affidavit for Ms. Hartwell to swear in opposition to LL’s summons. This set out the facts relied on by Mr. and Mrs. Fox, including those relevant to the alleged concealment: in particular, it gave Mr. Fox’s account of never having seen any revised version of the Agreement involving SV. As regards the nature of Mr. Fox’s claims, the affidavit followed closely the approach of the Statement of Claim, characterising the negligence complained of as being LL’s negligence in pursuing the Fontana and Hanson claims from 1985 to 1981. Loss was only said to have been suffered “in 1991 when the Mareva injunction in the Fontana action was finally discharged, because it was at that point of time that the Plaintiffs lost the chance of compromising all their claims for £445,000” (para. 15). That formulation slurs some difficult questions, but no doubt that was tactically wise. The affidavit also relied, “in the case of the loss of the opportunity to settle for £445,000”, on the alleged concealment by LL of “the improved offer” (para. 16): although logically that plea was only necessary if the cause of action had expired prior to 19^th July 1995, which on the case as advanced in para. 15 it had not, there is nothing in the affidavit to suggest that a case was being put on the basis of negligent advice in October 1985 (and the loss of the settlement offer at that time).

In response to Ms. Hartwell’s affidavit WWH pointed out, initially in correspondence but subsequently by affidavit, that Mr. Fox’s account of never having seen the revised version of the Agreement was demonstrably untrue, for the reasons given in para. 80 above. This had not previously been appreciated by either PJH or counsel. It did not, fortunately, prevent them from successfully resisting LL’s application, which was refused by Master Leslie on 15^th October 1997. But Mr. Susman advised that it was necessary to get to the bottom of the point as soon as possible. PJH tracked down Mr. Lines of SLP, who was now retired. They appear to have spoken to him first on 21^st October. Having considered the papers, he telephoned Ms. Hartwell on 4^th November to say that he was quite sure that Mr. Fox had seen the relevant draft of the Agreement and that there was no question of concealment; but he also expressed the view that an acceptable settlement was achievable and that negotiations with TSW should have been pressed to a conclusion. By this date, the limitation period for any claim against Wellers had expired, but it is convenient to complete the story of Mr. Lines’s involvement. Mr. Fox at first disputed what Mr. Lines said, but PJH asked Mr. Lines to prepare a full statement. This, when finalised in March 1998, showed quite irrefutably that Mr. Fox was wrong, and he was constrained finally to accept (albeit not without some qualifications and subsequent backsliding) that that must be the case. The statement also, however, asserted in clear terms Mr. Lines’s view that if SLP’s instructions had not been withdrawn the remaining documentation – including, crucially, the guarantee from SV – would have been finalised and the settlement agreement concluded. He emphasised that he believed that Mr. Fox was, subject to those points, willing to settle and that such a settlement would have been in his interests.

At no point in this period did either PJH or the Defendants advise Mr. Fox about whether he had any claim against Wellers for failing to advise him of the time limits applicable to the lost settlement claim, or that time to bring such a claim against Wellers would prima facie expire at the end of October 1997. I defer consideration of whether that omission was negligent.

As noted above, the events of this period are not as such material to the issues which I have to decide, but I need to deal with them to the extent that they cast light on the thinking of the parties during the period up to the end of October 1997.

On 24^th November 1997 Ms. Hartwell telephoned Mr. Susman to discuss a problem which had arisen with Mr. Fox, who was asking PJH to instruct Mr. Lines not to speak to WWH and also seemed to be wanting to influence the substance of his evidence. Because the issue was evidently a delicate one Mr. Susman made a note of his advice immediately after the conversation. He gave some (entirely proper) advice about how that problem should be dealt with. But he then went on to say something about the impact of Mr. Lines’s evidence on the merits of the claim. His note reads:

As the action against Mr. Leech proceeded towards trial, there was discussion from time to time between Ms. Hartwell and Mr. Fox about the merits of the claim and what might be an appropriate amount for which to settle. Mr. Fox believed that he should recover over £1 million. Ms. Hartwell advised him that he was unlikely to recover anything like that amount and referred to limitation difficulties. On two occasions, in June and again in August 1998, Mr. Fox told her that he thought that she was being over-pessimistic about limitation, but that if she were right he would then have a good claim for negligence against Wellers for having failed to issue proceedings against LL in time; and he raised the issue with her again in April 1999. It is unnecessary, in the light of the issues which I have to decide, to try to analyse precisely what limitation difficulties either Ms. Hartwell or Mr. Fox had in mind.

Trial of the action against Mr. Leech was fixed for 13^th April 1999. Mr. Susman and Mr. Batcup were instructed. It had by that stage become clear that WWH were not going to be able to adduce any evidence from Mr. Leech himself: he had “gone to ground”. There was a consultation on 6^th April. Ms. Hartwell made a reasonably full note of the consultation, but it is not at all points possible to work out exactly what was being said. However I need only focus on the points of relevance to the present claim. Mr. Susman made it plain that he had not at that point had the chance to read the papers in full. He said that while in 1997 he would have advised settlement at £100,000 he was now more optimistic because of (a) the “excellent” statement which had been obtained from Mr. Lines and (b) “Mr. Leech’s disappearance”. It should be noted that at least the first of those factors would appear to be relevant only to the lost settlement claim: Mr. Lines’s evidence did not go to any other point (save the concealment issue, on which it was extremely unhelpful). Mr. Susman then proceeded to examine Mr. Fox’s various causes of action. One variant which he considered was a claim that LL “did not get you the deal in 1985”; and he advised, inevitably, that in respect of such a claim Mr. Fox “should have sued in 1991” and that it was accordingly statute-barred, subject to the s. 32 points which now seemed hopeless on the facts. As regards the causes of action based on LL’s mishandling of the Fontana and Hanson actions, he thought the prospects were good, though the amount of the damages would be much less than the £1m. which Mr. Fox sought. He did however warn of the risk that the claim might fail in its entirety; and it seems, though this is less clear, that that warning was at least in part on the basis that there might be a limitation defence to the whole action. In the course of a general discussion of an appropriate settlement figure Mr. Susman warned that there was no guarantee that Mr. Fox would recover anything. He said, according to Ms. Hartwell’s note:

In the event the date of trial was postponed to 4^th May 1999. Mr. Susman prepared a written opening. This can be analysed, so far as necessary for present purposes, as follows:

The opening sets out the background to Mr. Fox’s claims against the Hanson interests, the settlement discussions of October 1985 and Mr. Leech’s advice. It then says, at para. 20:

The opening proceeds, under the heading “Negligence”, to allege that “Mr. Leech was in breach of duty in each of those respects”, sc. the four obligations identified at 20.1-20.4. Para. 22 sets out the breach alleged of the first obligation, as follows:

Paras. 23-26 go on to allege breaches of the other obligations – specifically, that Mr. Leech never tried to obtain a better offer (para. 23) and that he failed to pursue the Fontana and Hanson actions with reasonable diligence (paras. 25 and 26).

Paras. 28-30 deal with damages. Para. 28 sets out the loss suffered as a result of the mishandling of the Fontana action. It points out that $181,000 had been caught by the Mareva and that Mr. and Mrs. Fox

The way that that concession is phrased suggests that Mr. and Mrs. Fox might once have been entitled to recover £445,000 in relation to the Fontana action but “now” could not. This is somewhat opaque. It is not clear on what basis it was being said that Mr. and Mrs. Fox could ever have recovered £445,000 in relation to the Fontana action. The most probable explanation is that the reference is to the case that Mr. Leech’s negligent advice in October 1985 had led to the loss of the settlement offer. It is true that the preceding paragraphs of the Opening had not unequivocally made such a claim, but paras. 20.1 and 22 had come very close to doing so. On that basis the “now” presumably reflects a recognition that such a claim was statute-barred.

Paras. 29-30 set out the loss suffered in relation to the Hanson action. This amounted to some £62,000. There was also a claim for an indemnity against any further costs liabilities which might yet accrue to Mr. Fox from the Hanson action (which, though moribund, had not been formally disposed of).

Para. 31 deals very shortly with the question of limitation by asserting that Mr. and Mrs. Fox suffered each of the losses suffered no earlier than 19^th July 1989. No attempt was made to rely on the s. 32 points: on the way that the case was now put there was indeed no need to do so.

The effect of the opening was thus (a) to allege – for the first time explicitly - that Mr. Leech had been negligent in advising Mr. and Mrs. Fox not to accept the settlement (see in particular para. 22 of the opening); but (b) not to claim any damages resulting from that negligent advice; and (c) explicitly to abandon the pleaded claim to damages by reference to the £445,000 “lost” offer. This approach was the result of some careful and anxious reconsideration by Mr. Susman. He saw no real prospect of recovering on the lost settlement claim: quite apart from any view as to its substantial merits, it was plainly statute-barred. He was also concerned that raising any claim which required reliance on the s. 32 points would be highly damaging to Mr. Fox’s credit, since his pleaded account of what versions of the draft he had seen was demonstrably wrong; and there were also hints from WWH that if Mr. Leech was shown, as alleged, to have acted dishonestly in concealing documents SIF would not indemnify him. He believed that it was best to focus attention away from the £445,000 altogether and concentrate on the remaining claims. Given that he was thus abandoning the claim to the £445,000, it may seem odd that he nevertheless came out unequivocally with the claim that Mr. Leech’s advice had been negligent, but it appears that he (understandably) thought that there was prejudicial value in criticising Mr. Leech’s advice.

A draft of Mr. Susman’s proposed opening was discussed in consultation on 19^th April 1999. Mr. Susman summarised his advice, as regards the lost settlement claim, as follows (as recorded in Ms. Hartwell’s note):

Mr. Susman also produced a single-page document headed “Calculation of settlement offer” which he proposed to give Mr. Leech’s counsel for the purpose of settlement. This put the “100% value” of the claim, including interest, at £311,329 but proposed a 25% discount to produce an ultimate settlement offer of £230,000 (plus the indemnity referred to at para. 99 (6) above).

On the morning of the trial SIF increased their offer to £150,000 plus costs. Mr. Susman, believing that this was in the circumstances a very good offer (as indeed it would seem to have been), advised Mr. and Mrs. Fox to accept. They did so.

Although the reference in the note of the consultation of 6^th April is the only documentary reference to the Defendants identifying a possible claim against Wellers, it was in fact the evidence of Mr. Susman that he and Mr. Batcup did discuss the possibility of such a claim at about this time. At para. 45 of his witness statement he said:

MAY 1999 – MAY 2004: THE CLAIM AGAINST PJH

On 18^th May 1999, i.e. immediately following the settlement of the claim against LL, Mr. Fox sought PJH’s advice as to whether Wellers had been negligent in not issuing proceedings against LL in 1991, as a result of which

Mr. Matthias advised in conference on 19^th June 2000. Ms. Hartwell’s note of the conference (approved by Mr. Matthias) shows that Mr. Fox took counsel in detail through the history of the negotiations with TSW in October 1985. He emphasised that at the time that he first saw Mr. Leech he was “totally unaware that the original form of the agreement had been revised and re-drafted to take into account his concerns” and said that “the ultimate form of the agreement negotiated by Mr. Lines would have been satisfactory to him”. He said that in particular he was unaware that the bills “were to be guaranteed by [SV]”. This of course is the version of events which Mr. Fox had advanced in 1997 and which had been demonstrated to be quite wrong. Surprisingly, this was not pointed out to Mr. Matthias, who had not been supplied with any of the contemporary papers and accordingly took what he was told at face value. Against that background, he advised (a) that LL had been in breach of duty in October 1985 by failing to advise Mr. Fox of the availability of an acceptable form of the offer; (b) that that breach had led to the offer being lost; (c) that that loss had occurred by no later than the end of October 1985, so that the time for bringing proceedings based on it expired at the end of October 1991; (d) that Wellers were in breach of duty in not advising that proceedings should be issued prior to October 1997; but (e) that any claim against Wellers was now statute-barred. He described the (now lost) claim against Wellers as “beautifully simple”.

Mr. Fox then took other advice. Proceedings were in due course commenced by Mr. and Mrs. Fox against PJH for failing to advise them of the time limit for bringing proceedings against Wellers. The claim was brought with the benefit of a contingency fee agreement. It was quantified at almost £1m. PJH initially vigorously defended the claim. But at a mediation in April 2004 PJH agreed to pay £110,000 in full and final settlement, together with £160,000 in costs. Mr. and Mrs. Fox did not proceed against either Defendant, nor did PJH seek to join them as Part 20 defendants: they did apparently seek to engage them in the mediation but they were not interested.

PJH’s claim is, as I have said, based on the provisions of s. 1 of the 1978 Act. No point arises as to the effect of the sub-section, but for ease of reference I reproduce the relevant parts as follows:

The issues, or potential issues, raised by PJH’s claim in the present proceedings can be analysed as follows:

Were the Defendants liable to Mr. and Mrs. Fox for failing to advise them prior to the end of October 1997 of the potential claim against Wellers and of the time limit applicable to that claim ? Since any such liability would have arisen in tort that issue resolves into two sub-issues:

If so, would PJH have been liable to Mr. and Mrs. Fox for the same damage if “the factual basis of the claim against [them]” had been established ?

Was PJH’s settlement with Mr. and Mrs. Fox bona fide ?

If on consideration of the foregoing issues the Defendants are liable to contribute to the amount of the settlement in what amount should they do so ?

Although it might appear strictly more logical to consider breach and damage in that order, it will in fact be more convenient to approach the sub-issues in chronological order, i.e. to consider first the value of the lost settlement claim and then that of the putatively lost claim against Wellers before proceeding to consider the potential liability of the Defendants.

My task is not to seek to decide definitively whether LL were liable in negligence to Mr. and Mrs. Fox for the amount of the lost settlement, but simply to decide whether that claim had a real and substantial prospect of success and thus constituted a thing of real value: the numerous authorities to this effect are helpfully reviewed and their effect analysed by the Court of Appeal in Dixon v. Clement Jones [2005] PNLR 6 ([2004] EWCA Civ 1005), esp. per Rix LJ at paras. 24-42. Even if there may sometimes be cases where it is open to the Court to, in effect, try the lost action, this is certainly not one of them: too little of the evidence which would be crucial for a fair determination is available. In performing that task I ought to take into account the principle deriving from Armory v. Delamirie (1722) 1 Stra. 505 that if the negligence of the defendant has led to evidence being unavailable which might otherwise have assisted the victim of that negligence he should have the benefit of any consequent doubt. I should, strictly, consider the question as at October 1991, when the claim was lost.

In my judgment the lost settlement claim against LL, viewed as at that date, had substantial value. My reasons are as follows.

I should start by saying that the substantive points made in Mr. Leech’s letter of 23^rd October 1985, taken by themselves, seem unimpeachable. The various problems which he identified with the draft Agreement were, as discussed at para. 21 above, real. The only way of ensuring payment of the future instalments, within the framework as agreed at that date, would have been for SV’s “guarantee” to take the form of an undertaking to pay in the event of default irrespective of any alleged breaches of the Agreement. No such undertaking from SV had been proffered, and it was unlikely that the promised guarantee when (or if) tendered would go that far.

It does not however follow that the only sensible course for Mr. and Mrs. Fox was to reject the offer. It remained to be seen whether the SV guarantee in fact materialised and if so what its terms amounted to. And even if, as seemed likely, they did not give 100% protection, a judgment would have to be made as to whether the risks of default (which would not necessarily mean ultimate non-payment but would entail further litigation) outweighed the risks of continuing with the litigation. All agreements involving deferred payments carry some risk of default, and all agreements involving mutual obligations carry the risk that the other party will allege breach and claim damages in consequence. These risks were inevitably inherent in an agreement of the kind which Mr. Fox had negotiated with Mr. Farnsworth. Mr. Lines and Mr. Grey both believed that the risks inherent in an agreement of the kind apparently on offer were preferable to the risks of litigation against the Hanson interests. Thus the real question about Mr. Leech’s advice is not whether his analysis of the draft Agreement was wrong but whether it was negligent of him to have advised as emphatically as he apparently did that Mr. Fox should seek to re-negotiate and should be prepared to litigate if re-negotiation proved impossible; and, importantly, that for those purposes he should (immediately) change solicitors.

I believe that there is a serious argument that that advice was indeed negligent. Mr. and Mrs. Fox had been receiving careful advice from competent solicitors and counsel who had had every opportunity not only to consider the Agreement but also to assess the risks of the alternative course of embarking on further litigation. Mr. Leech was in no position to form any useful view on the latter element in the equation. He knew about the merits (and value) of the claim against the Hanson interests only what Mr. Fox could tell him in a single meeting (supplemented by what he may have already heard from Mr. Cutting and/or Mr. Woods – who, however, may not have been entirely disinterested). In those circumstances, for Mr. Leech to give the advice which Mr. Fox says that he did may have been not just bold but reckless. It is arguable that any prudent solicitor should have advised at least that Mr. and Mrs. Fox should continue to retain SLP until the terms of the SV guarantee were known, and should have taken advantage of the interval to acquaint himself more fully with the real prospects of the potential claim against the Hanson interests. Mr. Leech was well aware that the mere fact that he had been instructed in place of SLP might lead the Hanson interests to withdraw: he told Mr. Fox so in the letter of 23^rd October. The fact that he warned him of that risk, even if he did so before the die was cast (as to which there is no evidence), would not necessarily be enough to “save” his substantive advice if that was otherwise negligent.

Even if it was not negligent for Mr. Leech to give the advice which he did between 15^th and 23^rd October, there is the further question of his communications, or the lack of them, with TSW in the days following Mr. Fox’s decision to instruct him. As explored in para. 34 above, the facts are obscure. But if Mr. Leech did indeed make no attempt to contact TSW, thus leaving the negotiations effectively in limbo at a crucial point, that too was arguably negligent. Whatever the deficiencies of the draft Agreement, the priority, from the point of view of Mr. Fox’s interests, was to see if they could be remedied; and it appears that that was what Mr. Leech told Mr. Fox he intended to try to do.

I therefore believe that Mr. Fox’s potential claim for negligence against LL was a thing of real value as at October 1991. It was of course by no means unproblematic. As I have acknowledged, there does not appear to have been much wrong with Mr. Leech’s legal analysis. The primary challenge had to be to his tactical advice, which is in principle a more difficult target. And since the advice on which the claim would largely depend was given orally, and the challenge to it would centre on its tone as much as its content, much would hang on Mr. Fox’s credibility and reliability as a witness. But in my judgment the sequence of events between 15^th and 28^th October is sufficiently unusual that a Court would have wished to look quite hard at Mr. Leech’s conduct (including the extent to which he was having regard only to Mr. Fox’s interests as opposed to his own and that of his existing clients). It is also legitimate to bear in mind that any Court considering in the early 1990s a claim arising out of Mr. Leech’s advice in October 1985 would do so in a context highly unfavourable to LL. It would know of the negligent way in which the Fontana and Hanson actions had been handled (indeed the lost settlement claim would presumably form part of an action in which that negligence was also claimed for); of the Court of Appeal’s criticisms of Mr. Leech when discharging the second Mareva; of Mr. Leech’s nervous breakdown (with the consequent complaint to the Law Society); and of his bankruptcy.

I also acknowledge that there are question-marks as to whether the Hanson interests ever meant to settle; as to whether a guarantee from SV would in fact have been forthcoming; and, even if all was in order on that side, as to whether, even apart from Mr. Leech’s advice, Mr. Fox might not in the end have got terminal cold feet about the proposed deal. Difficulties and uncertainties of this kind would certainly affect the settlement value of the claim, but I am in no position to reach a firm view that all or any of those problems would have prevented the settlement eventuating. The evidence falls well short of establishing either that the Hanson interests were not negotiating in good faith, or that SV would not have provided a guarantee, or that Mr. Fox would, even if SLP had remained instructed, have pulled out of the settlement. It is to be noted that at any trial the Court would have had the benefit of the evidence of Mr. Lines, who strongly believed not only that settlement was available (and that he would have agreed to it if sensibly advised) but also that a settlement on proper terms was available.

I reach this view on my own assessment of the evidence available to me. I note Mr. Wadsworth’s negative advice about the prospects of the lost settlement claim. As I point out at para. 57 above, it is in fact unclear what information he was given; but I can in any event be confident that he did not have the issues as fully explored with him as I have. I also note Mr. Susman’s advice in August 1997 that the claim was “highly speculative” (see para. 90 (5)) and what he gave in his witness statement as his reasons for not being concerned in April 1999 about the time limit for suing Wellers having passed (see para. 104). I consider in more detail below what basis Mr. Susman had for those views: at this stage I need only say that, to the extent that it was his view at the time that a claim against LL on the lost settlement claim had never had any realistic prospect of success, I cannot agree.

In summary, therefore, I believe that the lost settlement claim had a substantial value. I do not, given the peculiar nature of these proceedings, have to form any more precise view about that value.

If Mr. Fox had appreciated that the lost settlement claim against LL would become statute-barred at the end of October 1991 I have no doubt that he would have insisted on steps being taken that would have preserved that claim. Although it took him a little time to focus on the lost settlement claim, once he did so he was always keen that it should be advanced. The most obvious course would have been simply to issue before the end of October 1991 the proceedings against LL which were eventually issued almost four years later, pleading the lost settlement claim in those proceedings in a more straightforward way than had to be resorted to subsequently. There would have been no difficulty in doing so within the scope of the legal aid already granted.

As with the lost claim against LL, it is not necessary for me to reach a definitive view as to whether the lost claim against Wellers would have succeeded but only to decide whether (as at October 1997) it had a substantial value. I have not found this altogether easy. It does not follow from my conclusion that the lost settlement claim had a substantial value that Wellers were negligent in failing to advise about it prior to the end of October 1991. That depends on what they were told by, or should reasonably have elicited from, Mr. Fox about the events of October 1985. I can see a powerful argument that Wellers were not told enough to put them on notice of the potential claim until after the crucial date. They were initially instructed for the purpose of conducting the Fontana and Hanson litigation. Although it became clear from an early stage that the way in which that litigation had been handled gave rise to a potential claim for negligence against LL, there is nothing either in Mr. Fox’s witness statement for the purpose of the PJH proceedings or in the documents before me to suggest that he explicitly raised with Wellers an allegation that the advice given in October 1985 was negligent. His application for legal aid referred only to negligence in the handling of the litigation. Although the ten-page note, which Mr. Fox sent to Miss Nickson in May 1991, did give Wellers an account of the events of October 1985 it fell short of clearly alleging negligent advice or raising the lost settlement claim: see para. 49 above. It was not until May 1993 that he explicitly did so: see para. 55.

On careful consideration, however, I am not prepared to say that there was no real prospect that a claim against Wellers could have succeeded. I think that it is at least arguable that Mr. Fox’s account in the ten-page note of the advice which he was given in October 1985 should have put Wellers on notice that there might be grounds for criticising that advice and that it was necessary carefully to go over what had happened with Mr. Fox. (In this connection it is interesting to note that on reading the ten-page note Miss Nickson did in fact ask for, and receive, a copy of Mr. Leech’s letter of 23^rd October; but she does not appear to have pursued her enquiries further.) If that point is reached, it almost certainly follows that Wellers should have appreciated that any such review needed to be conducted before the end of October 1991. If there had been a focused discussion of the point, either between Mr. Fox and Miss Nickson or in an earlier conference with Mr. Batcup, it is likely that the criticisms which Mr. Fox eventually made in May 1993 would have been raised earlier and that appropriate advice about limitation given would have been given. Mr. Stewart emphasised to me that Mr. Fox was a man who knew his own mind and that if he had wanted to make a claim against LL based on negligent advice in October 1985 he would have done so. But even clear-thinking and decisive clients need to have their minds focused by their lawyers. The germ of the complaint which emerged in May 1993 was present in the ten-page note: it is arguable that Miss Nickson should have spotted the claim that was latent in Mr. Fox’s criticisms even if he had not yet spotted it himself.

Despite that conclusion, I must frankly say that on the materials before me I am inclined to think that a claim against Wellers on this basis would have been rather weak; but what matters is that its prospects of success were more than negligible. Much would depend on a detailed examination of the communications (oral as well as written) between Miss Nickson and Mr. Fox in mid-1991, which would form an important background to how the ten-page note should be read. Such an examination is not now possible; but, on the hypothesis (which I have to adopt for these purposes) that that is the result of the negligence of PJH and the Defendants, the benefit of any reasonable doubt would have had to go to Mr. Fox. I also note that at a trial in, say, 2000 Mr. Fox would have been helped by the fact that there were other serious criticisms of Wellers’ conduct. Whether or not any other claims of negligence could be advanced against them, their conduct of the Hanson action and the claim against LL was unimpressive and painfully slow.

I have considered whether it may not also be legitimate to bear in mind that, subject to any excess, SIF stood behind both LL and Wellers, so that the knowledge that even if a limitation defence in the LL action succeeded (as regards the lost settlement claim) that might only mean that the loss came out of another pocket might have induced SIF to pay up in the LL claim. Mr. Stewart rightly warned me to be cautious about this line of argument because of the complications caused by the presence of an excess and by the fact that SIF could not simply treat both its insureds as interchangeable, and I would reach the same conclusion even if I ignored it; but I do not in fact think that it is a wholly negligible factor in assessing whether even a comparatively weak claim against Wellers might have had a real value to Mr. Fox.

Again, I reach this view on the basis of my own assessment of the material available to me. But, notwithstanding the qualifications expressed in para. 106, it gains some limited support from the fact that Mr. Matthias of counsel advised in June 2000 that there would, but for limitation, have been a good claim against Wellers.

Again too, I have no doubt that if Mr. Fox had been advised that the time limit for bringing proceedings against Wellers expired at the end of October 1997 he would have taken whatever steps were necessary to preserve his rights. The issue of a protective writ would have been a straightforward matter: the evidence of Mr. Hinds was that legal aid would almost certainly have been available for that purpose, but even if it was not no doubt Mr. Fox could have raised the necessary sum. (A still cheaper alternative would have been to agree with Wellers and/or SIF to “toll” limitation, which might well have been possible.)

It is a distinct question whether Mr. Fox would not only have taken the necessary steps to preserve his rights against Wellers prior to the end of 1997 but would have pursued them thereafter to trial or settlement. In Harrison v. Bloom Camillin [2000] Lloyd’s Rep. P.N. 89 Neuberger J. held that that question falls to be resolved on the balance of probabilities rather than simply as part of the “loss-of-a-chance-based” valuation of the claim (see at p. 95). Although I do not find the question entirely easy, I respectfully agree with his conclusion. I have no doubt that Mr. Fox would have wished to pursue proceedings against Wellers unless he were able to achieve full (or at least substantial) recovery in respect of the lost settlement claim in the LL action: he made it quite clear in 1998 and early 1999 that he would sue Wellers if his claim against LL was eventually prejudiced by their failure to issue proceedings in time (see para. 97 above). Mr. Fox did not apparently in 1997 or 1998 have substantial assets apart from his home, and he would thus at that date have been dependent on receiving legal aid or finding a solicitor willing to act on a conditional fee basis. That might not have been straightforward given my doubts over the strength of the case that Wellers had been negligent. But I do not believe that the difficulties facing Mr. Fox would have been insuperable. He would, as I have found, have had no difficulty in issuing an initial writ. The sensible tactic thereafter would have been to seek to keep the proceedings on hold until the LL action was determined. I think it likely that SIF (who would very likely in practice have had the conduct of the defence) would have been agreeable to that course. Even if they were not, I think that Mr. Fox could have found the limited funds necessary to keep the action going until mid-1999, when he received his damages from LL. (Footnote: ⁶) Although it would have been something of a gamble for him to invest a substantial part of those hard-earned fruits in further litigation, I think that he would have been prepared to do so if he had to. He was nothing if not tenacious. I note that he was willing to fund privately the obtaining of advice from Mr. Matthias in June 2000. I do not however think it at all unlikely that he would have been able to find solicitors willing to pursue the matter on a conditional fee basis. Despite my own doubts about the strength of the claim against Wellers, I note how Mr. Fox was able to persuade Mr. Matthias of its merits. I also note that his eventual proceedings against PJH were pursued under a CFA. Although certainty is not possible, I find on the balance of probabilities that Mr. Fox would have been able to fund a claim against Wellers until trial or earlier settlement.

From at least the receipt of his instructions dated 30^th June 1995 onwards Mr. Batcup was, and in any event should have been, aware that the lost settlement claim formed part of the claim which Mr. Fox wished to bring against LL (Footnote: ⁷). That was apparent in particular from the terms of the “Matters for Statement of Claim” note included with those instructions: see paras. 62 and 65 above. His understanding to this effect is apparent (though admittedly not always readily apparent) in the way that he pleaded the case: see paras. 73-77 and 82-83 above. It preceded, and was independent of, the introduction by Mr. Fox in September 1996 of his allegations about Mr. Leech’s concealment of the revised draft of the settlement offer, although until those allegations were definitively shown to be ill-founded (which did not occur until after the end of the relevant period) they may have reinforced Mr. Batcup’s perception that the claim was a viable one.

I believe that the same was equally apparent to Mr. Susman from, at latest, the date of the consultation of 22^nd August 1997. Despite the obscurities of the pleadings with which he had to grapple, it is clear that he – correctly – understood that Mr. Fox wished to claim that Mr. Leech’s advice was negligent and had caused him to lose the £445,000 settlement offer; and that that case was not dependent on the concealment allegations. That is adequately apparent from his observations in that consultation (see para. 90 above), but it is confirmed by his note of 24^th November 1997 (see para. 96) and by the way in which he analysed and presented the claim in the period leading up to the trial in 1999 (see para. 99). So far as the latter points are concerned, they of course post-date the relevant period, and I accept that by the time that Mr. Susman came to prepare the opening he had much fuller papers than he had had in 1997; but the fuller detail which was available was not such as fundamentally to change the nature of the claim. It is true that Mr. Susman, like Mr. Batcup in the pleadings, fought shy, in his drafting both of Ms. Hartwell’s affidavit in 1997 and of the opening in 1999, of explicitly advancing such a claim; but there were particular tactical reasons for taking that course.

Since both Defendants understood that Mr. Fox wished to advance the lost settlement claim it was plainly incumbent on them to consider whether it was statute-barred: the question of limitation obviously arose, given the dates in question, and it was in any event brought into focus by LL’s defence. And it is in fact both clear and accepted that both Defendants did indeed during the relevant period consider the limitation issue and that they understood that it posed a serious problem. In the case of Mr. Batcup, he never advised on the point explicitly; but his appreciation that the lost settlement claim was prima facie statute-barred can be inferred from the way in which he pleaded the Statement of Claim and the Reply. And in the case of both counsel the point was addressed in the consultation on 22^nd August 1997. Even though there is no note of any unambiguous advice to this effect until the consultations in April 1999, it is in my view adequately clear that both counsel appreciated well before the end of October 1997 that the lost settlement claim was on the face of it statute-barred; and even if they did not, they plainly should have done. It is of course true that on the basis of Mr. Fox’s instructions there might have been a s. 32 answer to the limitation defence; but no-one was suggesting that that answer was so strong that there need be no concern about limitation, and by the end of October 1997 it was beginning to look very questionable.

Mr. Batcup knew that at the time that the limitation period for bringing the lost settlement claim expired Wellers were instructed. Mr. Susman may not have known exactly when Wellers were first instructed, but he knew of their prior involvement. In those circumstances I believe that it was the duty of both of them to raise with Mr. Fox the question whether Wellers may have been at fault in failing to take steps to preserve the lost settlement claim. I accept that they could not have given any definitive advice without being told more about what information and instructions Mr. Fox had given Wellers; but it was necessary to alert him to the fact that such a claim might lie and that the time for bringing it would expire at the end of October 1997. No doubt as a general proposition a lawyer may not be under a duty to advise his client about a potential claim which falls outside the scope of the matters on which he is instructed; but a claim against a previous adviser who has allowed a time limit to pass is so closely related to proceedings in which that limit is in issue that it will necessarily, even if only by implication, fall within the scope of the instructions of an adviser instructed in those proceedings to bring the possibility of such a claim, and any relevant time limits, to his client’s attention. It is then of course up to the client to decide whether he wants further advice and whether, subject to such advice, he wishes to bring proceedings. But he must at least be given the opportunity to choose. The duty arises even if the barrister believes that the claim in question is weak or otherwise not worth pursuing: unless it is evidently so hopeless that the client could not reasonably decide to pursue it, the advice must be given. In this connection Mr. Stewart sought to rely on Lady Hale’s observation in Moyv. Pettman Smith [2005] 1 WLR 587 to the effect that it is legitimate for a barrister to give the client the benefit of his opinion rather than his doubts (see at para. 28). But the question in this case is not whether the Defendants should have given more or less robust advice but whether they should have advised on the existence of a claim (and the imminent time bar) at all.

Mr. Stewart submitted in his opening, though the point was not actively pursued thereafter, that, even if the Defendants might otherwise have been under a duty to draw Mr. Fox’s attention to the possibility of a claim against Wellers, no such duty could arise in circumstances where Mr. Matthias had already been instructed to advise on such a claim (see para. 70 above). But Mr. Matthias had not been asked to advise on this aspect of the case, and there is no evidence that either Defendant understood that he had. Mr. Stewart also submitted that the Defendants were entitled to place faith in the s. 32 arguments. I do not accept this: there could be no confidence, even as at 22^nd August 1997 (and diminishingly over the following two months) that s. 32 would suffice to defeat the limitation defence.

Neither Defendant gave such advice before the end of October 1997. It was the evidence of each of them that the possibility of a claim against Wellers did not occur to them at that time. It follows from what I have said above that I believe that it should have done; and that view is reinforced by the fact that the possibility certainly did occur to them, without any radical change in the circumstances, in April 1999 (see paras. 98 and 104 above). Mr. Susman was adamant in his evidence that he was under no such duty. In cross-examination he said this:

Accordingly I believe that both Defendants were in breach of duty. PJH’s Statement of Claim pleads that Mr. Batcup should have given the advice in question at various dates in 1996 and 1997 as well as, with Mr. Susman, on 22^nd August 1997. It is unnecessary for me to consider those specific allegations: it is enough to say that the advice should have been given at that consultation if not before, and that the breach continued until the limitation bar came down at the end of October 1997. It is only fair to add that the breaches of duty on the part of both Defendants were specific and limited. Though Ms. Carr tried to interest me in a number of other criticisms of Mr. Batcup’s advice between 1991 and 1997, it is unnecessary that I should form any view about them; and, whether or not some may have been justified, I should record my clear view that Mr. Batcup was throughout his long involvement with Mr. Fox anxious to do his best for him and took a lot of trouble over the case. As for Mr. Susman, from the time that he was first instructed he did a great deal of careful and thoughtful work on the case and gave competent and professional service both in relation to LL’s application in 1997 and in relation to the proposed trial in 1999 and the settlement.

However, that is not the end of the matter. Both Mr. Susman and Mr. Batcup gave evidence that if the possibility of a claim against Wellers had occurred to them their advice would have been that no such claim should be pursued. Mr. Stewart submitted that such advice would not have been negligent and that accordingly any breach of duty on their part had caused no loss and the Defendants could not be liable. He relied on Bolitho v. City & Hackney Health Authority [1998] AC 232. In that case a doctor negligently failed to attend a sick child who (as it turned out) required intubation in order to prevent brain damage; but her evidence, which the Judge accepted, was that even if she had attended she would not have intubated, and the Judge held that such a course would not have been negligent. In those circumstances he held that her negligence in not attending had caused no loss; and the House of Lords upheld his reasoning.

I should start by noting that the basis for the Defendants’ evidence that they would have advised against proceeding against Wellers is not that they did not believe that Wellers had been negligent. So far as that is concerned, Mr. Susman knew nothing about the nature of Mr. Fox’s instructions to Wellers; and although Mr. Batcup was better placed than Mr. Susman in that regard, he too was certainly in no position to form a definitive view about whether Wellers were on notice of the lost settlement claim before the end of October 1991. Rather, their evidence was based on the view which Mr. Susman in particular says that he had at the time, and still has, that the lost settlement claim would not have been worth pursuing against LL in any event. I am bound to say that I think that there is an element of hindsight about this. It is true that Mr. Susman had in the consultation on 22nd August 1997 described the claim as “highly speculative”, but, as I have already observed, he was not at that time in a position to advise definitively on the merits and his judgment is likely to have been based principally on the limitation difficulties. Even if it did in fact represent his view of the substantive merits of the claim, “speculative” is not necessarily the same as “hopeless” (though I appreciate that it is sometimes used euphemistically); and he certainly regarded the lost settlement claim as sufficiently strong to be worth deploying in his opening in 1999, albeit in the rather unusual way described in para. 100 above. If I had to make a finding as to what advice Mr. Susman and Mr. Batcup would have given in mid-1997 if they had been asked whether the lost settlement claim would have been worth pursuing against LL but for the limitation problems, I think that they would have advised that it was. I do not doubt the genuineness of the belief which they now hold to the contrary; but it is no easier for them than for me – in fact, in some ways less easy – to reconstruct what they would have thought if the distorting influence of the limitation issue had been taken away. For the reasons which I give at paras. 112-121 above, there was in fact a strong case for pursuing the lost settlement claim as part of the overall action against LL, and I would expect Mr. Susman and Mr. Batcup as competent practitioners to have recognised it.

That finding may not by itself dispose of Mr. Stewart’s point. The strength of the lost settlement claim was not the only question affecting the viability of a claim against Wellers: it was also necessary to consider whether Wellers had been negligent. If I found (a) that Mr. and Mrs. Fox would have been advised that the case that Wellers had been negligent was too weak to justify the bringing of proceedings and (b) that such advice would not have been negligent, then the factual premise of his submission would survive. However, I still cannot accept his contention, for the following reasons.

In the first place, the position about what advice Mr. and Mrs. Fox would have received on the issue of Wellers’ negligence, if the issue had been addressed, is far from clear-cut. I should start by noting that it is unlikely that the advice in question would have been given by either of the Defendants. Mr. Batcup would almost certainly have regarded himself as conflicted out (as he did when the point eventually arose in late 1999 (see para. 105 above)); and Mr. Susman, though not himself directly conflicted, might, as he acknowledged in cross-examination, have found it awkward to accept instructions. If PJH could not have obtained advice from Mr. Susman or Mr. Batcup, it is a plausible speculation that they would have instructed Mr. Matthias, as they in due course did (see para. 106). In that case it is tempting to say that we know what he would have advised, namely that there was a “beautifully simple” claim against Wellers. That may in fact be too glib, since he or any other counsel considering the claim against Wellers at a time before the limitation bar had come down (including Mr. Susman if he had in fact accepted instructions) would have been required to consider the merits rather more narrowly than Mr. Matthias had to in the circumstances in which his advice fell to be given. My doubts about the true strength of the case against Wellers mean that I must contemplate that counsel advising on the question in mid-1997 might well have been cautious. But I think it very unlikely that he or she would have advised that the case was hopeless. There is thus no precise parallel with the position in Bolitho, where the Judge was able to make a clear finding as to what the doctor would have done.

More fundamentally, however, it is important to recognise that the question in the present case is not what the putative tortfeasor, or a third party, would have done but for the initial negligence but what they would have advised. In Bolitho the decision that would have avoided the loss would have been that of the doctor. In the present case the decision would have been Mr. Fox’s. As I have made clear at paras. 127-8 above, I have no doubt that even if Mr. Fox had in 1997 received cautious, or downright pessimistic advice, about the prospects of a claim against Wellers he would nevertheless have insisted on proceedings being issued (or an agreement reached with SIF) in order to preserve the limitation position and that he would have pursued the claim thereafter.

I have in reaching the conclusions expressed above striven to avoid hindsight. I have also reminded myself, in accordance with the warning given by Lord Hope in Moy v. Pettman Smith (above; see at para. 19), that the question is not whether I myself, or other barristers in the Defendants’ position, might have given the advice in question but whether any reasonably competent barrister should have done so.

The matters which I have identified in paras. 129-130 above as being apparent to the Defendants as counsel were, and certainly in any event should have been, equally apparent to Ms. Hartwell as a competent litigation solicitor. She knew about the lost settlement claim: indeed it was she who had most fully pleaded it, albeit at a stage when it was somewhat distorted by Mr. Fox’s allegations about concealment of the revised draft, (see para. 85 above). She should have appreciated at the consultation on 22^nd August 1997, if no earlier, that there was a strong risk that it was statute-barred and that that raised the question whether Wellers had been negligent in not issuing proceedings before the bar came down. I accordingly hold that PJH were liable to Mr. and Mrs. Fox on the facts alleged in the proceedings against them. Mr. Stewart had some fun with the fact that Ms. Hartwell had until the settlement of Mr. and Mrs. Fox’s claim robustly denied any negligence, but had appeared to undergo a change of heart by the time that she came to write her witness statement in these proceedings. But that is no more than a debating point. The question whether Ms. Hartwell was negligent is for me to judge rather than her.

The Defendants now accept that PJH’s settlement with Mr. and Mrs. Fox was bona fide. I understood them also to have accepted, if this is a different and material question, that it was reasonable in amount: even if they did not do so, I so find. If Mr. and Mrs. Fox had recovered in full from PJH the value of the lost settlement claim plus interest it would have been worth almost £1m. The sum of £110,000 finally agreed thus represented a very big discount on the 100% value of the claim and could on no view be regarded as an unreasonable amount to pay if there were any substantial risk on liability.

Mr. Stewart indeed submitted that the very smallness of the settlement amount was evidence that the lost claim against Wellers and/or the lost settlement claim were both extremely weak and so reinforced his arguments that the Defendants were not at fault in not drawing them to the attention of Mr. and Mrs. Fox and/or that if they had been identified prior to October 1997 Mr. and Mrs. Fox would have been advised not to pursue them. I have considered and rejected those arguments above. The smallness of the settlement sum does not trouble me in this context. I have already acknowledged the difficulties with both “lost” claims and I am not surprised that Mr. and Mrs. Fox were prepared to accept a very large discount. There are likely also to have been other considerations, unrelated to the objective merits of their claim, favouring a settlement, even at a very big discount.

By s. 2 of the 1978 Act I am obliged to apportion the relevant contributions of the parties as I find “just and equitable having regard to the extent of [the parties’] responsibility for the damage”. There is on the facts of this case no difference between the extent of the relative causative contributions of the negligence of PJH and the Defendants. The crucial question is the extent of their relative responsibility. In my judgment counsel must bear the greater share of the blame for failing to advise Mr. and Mrs. Fox of the potential claim against Wellers and the effect of the time bar. Their relationship was of the conventional kind in which PJH as solicitors looked to counsel for authoritative guidance on the major strategic questions concerning the conduct of the litigation and associated issues. In my judgment the just apportionment of contribution would be 75:25 between counsel on the one hand and PJH on the other. Mr. Stewart and Ms. Carr were agreed that it was unnecessary that I should make any apportionment as between the two Defendants.

The parties are agreed that PJH’s entitlement to contribution extends not only to the sum of £110,000 but also to their agreed liability for Mr. and Mrs. Fox’s costs in the sum of £160,000. The pleaded claim to a contribution to their own costs in defending the action is not pursued.