Background
Corporation Leasing & Finance Limited (CLF) retained Irwin Mitchell LLP in 2016 after its previous solicitors, RPL, withdrew shortly before trial from proceedings seeking to enforce a charge over property owned by Mr Raby and Ms McCann. Irwin Mitchell helped CLF settle that order-for-sale claim and later pursued a professional-negligence action against RPL concerning alleged failures relating to the charge, including compliance with the safeguards derived from Royal Bank of Scotland v Etridge.
CLF settled the RPL litigation in May 2019 on advice that it was likely to lose. It then sued Irwin Mitchell, alleging that the firm had inadequately pleaded and evaluated the RPL claim, wrongly advised settlement at an undervalue, failed to advance an alleged provision that would have imposed additional personal liability on Ms McCann, and omitted an interest clause from the order-for-sale settlement.
The Court’s Holding
Mr Justice Mansfield dismissed the claim. Irwin Mitchell was not negligent in pleading the RPL litigation or advising CLF to settle it. The firm was entitled to rely on properly instructed specialist counsel, whose advice was reasonable and not glaringly wrong. Given serious evidential weaknesses—including difficulties proving the underlying debt and the unreliability of CLF director Stephen Thornton’s evidence—the view that the RPL claim was very likely to fail was realistic.
The court also rejected the allegation concerning the additional-liability provision, finding that Mr Thornton had not instructed RPL to include it and that there was no realistic prospect Ms McCann would have accepted it. Nor was Irwin Mitchell negligent in failing to seek an interest clause in the order-for-sale settlement. There was no realistic chance the opposing parties would have agreed to such a term, and CLF proved no resulting loss. More broadly, CLF showed no realistic prospect of obtaining a better settlement or trial result in either underlying dispute.
Key Takeaways
- Settlement advice is assessed without hindsight, and negligence requires more than a debatable judgment about litigation risk.
- A solicitor may ordinarily rely on properly instructed counsel unless the advice is obviously or glaringly wrong; the advice here was reasonable.
- A professional-negligence claimant must prove both breach and a real, causative loss; speculative settlement possibilities and unsupported loss calculations are insufficient.
Why It Matters
The judgment illustrates the demanding threshold for claims attacking solicitors’ settlement advice, particularly where experienced counsel participated and the underlying litigation had substantial evidential weaknesses. Courts will examine what a competent adviser could reasonably have concluded at the time, not whether a different strategy appears preferable with hindsight.
It also underscores that loss-of-chance claims require evidence of a genuine prospect that third parties would have agreed to better terms or that litigation would have produced a better result. CLF’s unparticularised interest claim, inflated loss figures, and unsupported assertions about alternative settlements did not satisfy that requirement.