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Solicitors Negligence Claims

April 3, 2012

The case of Levicom International Holdings BV & another v Linklaters (a firm) [2010] EWCA Civ 494 illustrates how solicitors are expected to give proper reasoned advice and not be over optimistic if that is not the correct assessment of the claim. The case shifted the burden in solicitors negligence claims so that a client is automatically assumed to follow their solicitors advice. The Claimant was advised by the Defendant amongst many matters that their prospect of success was “in the region of but not less than 70%”

Settlements offers were made but Linklaters advised that due to the strength of the case they should be rejected.

Arbitration took place and the arbitrator did not view the case as favourably.

The Claimant settled the case on substantially worse terms than they had been offered in previous settlement proposals.

The Claimant issued a solicitors negligence claim against the Defendant claiming £37,000,000.

At first instance the court found against the Claimants.

The judge thought that the solicitors had been negligent in relation to certain matters as to the quantification of damages.

He thought however that even if they had been given different advice the Claimant would have still made the same decision to go ahead so Linklatars advice was not causative of Levicoms loss.

The Court of Appeal saw the case differently.

The solicitors advice on the agreement had been that it was clear when it was not,

The solicitors had been “bullish”

A junior solicitor had expressed doubts as to the strength of the claim and the client had asked for more senior advice and had as a consequence carried on. This showed the reliance on the advice given.

The solicitors were negligent in leading the Claimant to believe that damages would be substantial and the Claimant relied on the assessment.

The court decided that the test on causation had been wrong.

It was not for Levicom to prove causation on the balance of probabilities.

Instead there was a rebuttal presumption that a client follows a solicitors advice that it had a strong case and it is up to the solicitor to show that that even if they had been given the correct advice they would have acted no differently.

Lord Justice Stanley Burnton said,

“One has to ask why a commercial company should seek expensive City solicitors’ advice and do so repeatedly, if they were not to act on it”.