Laing v Taylor Walton Solicitors

Solicitor’s negligence – Defendant drafting documentation relating to agreement between claimant and another concerning development project – Litigation over agreement decided against claimant – Whether real prospect of showing that other party to agreement would have accepted claimant’s interpretation but for negligence of defendant in drafting documentation – Application to strike out claim – Whether impermissible to relitigate issues previously decided – Application dismissedThe claimant entered into two oral agreements with a development company and its owner, W, under which W invested £500,000 in a development project in High Wycombe, Buckinghamshire. Disputes arose between the claimant and W as to precisely what had been agreed. W instructed the defendant firm of solicitors to draft documentation to reflect the terms of the agreement. The documentation stated that W was to have a 12.5% shareholding in the company that owned the development.W brought proceedings against the claimant in the Technology and Construction Court (TCC), in which he claimed a 25% share, comprising both the 12.5% shareholding and a further 12.5% profit share. He contended that the defendant had been instructed to document only the shareholding, which was why the documents reflected a figure of only 12.5%. The claimant asserted that W was intended to have one 12.5% profit interest, for which the 12.5% shareholding was merely intended as security. The judge rejected evidence provided by the defendant that supported the claimant’s case, and its evidence that it had been retained by the claimant. He preferred the evidence provided by W and allowed the claim. The claimant brought a negligence claim against the defendant, alleging that it had breached duty of care owed to him. He submitted that had the defendant drafted the documentation correctly, it would have been clear that only one instance of 12.5% was intended, and W would have signed the documentation as a reflection of the true agreement. The defendant did not dispute that the claimant’s view of the agreement was correct or that it had owed him a duty of care. However, it denied negligence. It also applied for summary judgment in its favour on the ground that the claim was a blatant attempt to relitigate issues that had already been decided and to make a collateral attack upon the decision of the TCC judge.Held: The application was dismissed.The claimant had advanced a reasonably compelling case that the decision in the TCC was open to serious challenge. His case on causation was also far from being hopeless. In those circumstances, although acknowledging that the claimant’s case was no different from the one put before the TCC judge, a serious case could be made in favour of the claimant, that had a real prospect of success, including on the issues of causation and duty.The fact that the claim would involve relitigation of issues previously decided did not require the court to strike it out. The power to strike out in such cases should be exercised only where relitigation would be manifestly unfair or would otherwise bring the administration of justice into disrepute. No absolute or prescriptive rules were applicable in reaching a judgment upon whether one or other of those criteria had been met: Arthur JS Hall & Co v Simons [2002] 1 AC 615, Secretary of State for Trade and Industry v Bairstow (No 1) [2004] EWCA Civ 321; [2004] Ch 1 and Simms v Conlon [2006] EWCA Civ 1749 considered. In the instant case, the matter was finely balanced. Although the claimant sought to reverse the decision of the TCC judge solely by contending that he had lost when he should have won, the case was unusual in that the basis for that contention was that the drafting of the claimant’s solicitor had enabled W to pursue a case that he could not otherwise have done, because he would have acknowledged the truth. Moreover, the solicitor agreed that it had been acting for the claimant and that the agreement was as contended for by him. There was a certain amount of unfairness in exposing the defendant to a claim that arose from the TCC judge’s rejection of the claimant’s evidence. However, that had to be balanced against the unfairness to the claimant in the light of the fact that the defendant itself believed that the claimant was right. In all the circumstances, it would not bring the administration of justice into disrepute to permit the claim to continue. In addition, there was no manifest unfairness to the defendant when balanced against the fair interests of the claimant.Jonathan Marks QC (instructed by McBride Wilson & Co) appeared for the claimant; William Flenley (instructed by Mills & Reeve, of Birmingham) appeared for the defendant.Sally Dobson, barrister