A High Court ruling affirms a law firm’s non-negligence in a £2 million settlement case.
- The case involved claims against a businessman’s wife and daughter by his bankruptcy trustee.
- Judge Paul Matthews highlighted a lack of coherent causation in the claimant’s argument.
- The settlement negotiations were led by the businessman, trusted by his family to act on their behalf.
- The court ruled that the solicitor’s guidance to settle was prudent given the circumstances.
In a significant High Court decision, a law firm was cleared of negligence allegations regarding its advice for settling £2 million worth of claims. The claims were lodged by a bankrupt businessman’s trustee against the businessman’s wife and daughter. The court’s decision, delivered by Judge Paul Matthews, emphasised the absence of a ‘coherent case on causation of loss’ from the claimant’s side.
The litigation was pursued by Sandra Blower, on behalf of herself and as an assignee for her daughter, Kelly. The backdrop to the case was John Blower’s bankruptcy in 2014, following which his bankruptcy trustee pursued claims against Mrs. and Ms. Blower over transactions deemed undervalued.
During mediation, John Blower, who had prior business negotiation experience, represented the family. The judge noted the family’s trust in him to negotiate effectively, reflected in their decision to impose no limits on his negotiating powers. Despite offers and counter-offers exchanged during mediation, a final settlement was eventually reached.
The settlement, amounting to £1.5 million, involved the trustee agreeing not to pursue family assets in Spain and allowing John Blower’s immediate discharge from bankruptcy. The judge considered these terms reasonable given the weak defence and high costs risks. Solicitor Robert Whitehouse, alongside barrister Jonathan Crystal, judged the terms prudent.
Judge Matthews found that Mr. Whitehouse acted within reasonable bounds, particularly since no ‘red lines’ were set by the clients. The judgment underscored that even if negligence were considered, there was no substantial proof that a different outcome would have materialised had the settlement not been agreed upon.
Crucially, the court ruled that the solicitor was not negligent in accepting Mr. Blower’s instructions, as he had been given authority implicitly by the involved parties. The absence of direct attendance by the claimants at mediation further supported this stance.
The High Court’s decision underscores the legitimacy of the solicitor’s advice, affirming the strategic settlement as appropriate under the given circumstances.
