Avison v Harold Bell Infields & Co (A Firm) [2025] EWHC 1787 (Ch): strike out and summary judgment refused in solicitors negligence claim
Introduction
The claimants, a retired couple, lent a substantial sum to a business associate for a short-term, high-return investment and instructed the defendant solicitors to document the loan and security. The transaction unravelled. The borrowers defaulted, expensive litigation followed with one borrower disputing her participation and the other proving judgment proof, and the claimants say they were driven to sell their home to fund the consequences. They now sue their former solicitors for negligence. The defendant firm applied to strike out the claim, or alternatively to obtain summary judgment on the whole claim or on particular heads of loss, including the claim for interest accruing after default, the costs of pursuing the impecunious borrower, and losses linked to the sale of the claimants’ home.
Master McQuail dismissed the application. The judgment is a careful restatement of the high bars for strike out and summary judgment, the modern approach to scope of duty and remoteness in professional negligence, and the limited role of abuse of process where a negligence action follows earlier litigation between different parties.
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Factual background
In 2014 the claimants agreed to lend a significant sum to Mr White for a short period at a high rate of return. The loan was to be secured by a legal charge over a flat owned by Ms Emmanuel, described as Mr White’s business partner. The claimants instructed the defendant firm, in particular a solicitor, Mr Steed, to prepare a binding loan agreement and security. They emphasised the need for both borrowers to be bound, for proper safeguarding of their position, and for fraud risk to be eliminated so far as professional care could achieve.
The defendants drafted the loan and security and advised that signatures be taken before an independent lawyer. Mr White arranged for a retired solicitor and notary, Mr Laverick, to explain the documents and witness execution. He reported back to the defendants that he had done so for Mr White and for a person presenting as Ms Emmanuel. The documents were then completed, the loan monies were disbursed, and the charge over the flat was registered shortly afterwards. The loan agreement did not contain any provision for interest to continue or increase after the repayment date, there was no clause addressing interest after default.
The loan was not repaid by the due date. Subsequent negotiations included assertions that interest would continue at the contractual rate, but there was no written variation to this effect. Meanwhile, Ms Emmanuel put the flat up for sale and alleged that her signatures on the loan and charge had been forged. She issued proceedings in 2016 seeking declarations of forgery. Her first claim was struck out. A second claim was tried in 2018 before His Honour Judge Hand QC, who held that she had not proved forgery. Her appeal was dismissed by Birss J. The outcome left the charge in place and, on the face of the judgments, did not establish any fraud.
The claimants later settled with Ms Emmanuel, agreeing to discharge the charge in return for a payment which exceeded the principal advanced, and they obtained judgment against Mr White for the principal and interest at a much lower annual rate than they had hoped to recover. Enforcement against Mr White was, however, fruitless. He had no visible means to satisfy the judgment. The claimants say they incurred very substantial legal costs throughout, and that the overall financial pressures led them to sell their home.
The professional negligence claim alleges that the solicitors failed to exercise reasonable care in documenting the transaction and protecting the claimants’ position. Particular complaints include the failure to ensure a recorded and retrievable trail of identification, the absence of a clause providing for interest to accrue after the due date, and failures in the approach to execution and security that, they say, allowed the dispute to take hold and added materially to the losses suffered. The defendants deny negligence and deny causation.
The application
The defendants sought to strike out the claim under CPR 3.4(2)(a) on the basis that the pleading disclosed no reasonable grounds for bringing the claim. Alternatively, they applied for summary judgment under CPR 24.2 on the basis that the claim had no real prospect of success and there was no other compelling reason for a trial. They also sought, in the further alternative, summary disposal of specific heads of loss, namely the claim for interest accruing after default, the costs of pursuing Mr White, and consequential losses associated with the sale of the claimants’ home.
Legal framework
The court rehearsed the orthodox tests. Strike out is a last resort where a pleaded case is bound to fail even if the facts are assumed to be true. On a CPR 3.4 application the court generally takes the pleaded facts at face value and does not conduct fact finding unless an assertion is plainly unsustainable. On summary judgment the question is whether the case is realistic rather than fanciful, applying the familiar guidance in Easyair Ltd v Opal Telecom Ltd [2009] EWHC 339 (Ch). The court should avoid a mini-trial on incomplete material and be alert to fact sensitive disputes that belong at trial.
Abuse of process was addressed by reference to Hunter v Chief Constable of the West Midlands Police [1982] AC 529 and the line of authority including Laing v Taylor Walton [2007] EWCA Civ 1146. The question is fact specific. A negligence claim against a former solicitor following earlier litigation is not inherently abusive. The focus is on whether the new claim is a disguised attempt to re litigate an issue determined between the same parties, or whether it raises a distinct question about the solicitor’s performance and the hypothetical position had the solicitor acted competently.
On scope of duty and remoteness the court referred to the Supreme Court decisions in Hughes-Holland v BPE Solicitors [2017] UKSC 21 and Manchester Building Society v Grant Thornton UK LLP [2021] UKSC 20. These authorities emphasise that a professional is not an insurer against all loss that follows a transaction. One asks what risk the professional undertook responsibility to protect the client against, and whether the loss that materialised was within that scope. Foreseeability and legal causation remain essential filters.
Master McQuail approached the application with these principles in mind, taking care to separate questions appropriate for early disposal from those that required factual exploration at trial.
Parties’ submissions
Defendant solicitors
The defendants argued that the negligence action was in substance a collateral attack on the 2018 judgment. They said the claimants’ case required the court to revisit whether Ms Emmanuel signed, whether she would have agreed to particular terms, and what would have happened in the forgery litigation, thereby undermining the final outcome. They submitted that the firm did not assume responsibility for borrower solvency and could not be made liable for the consequences of Mr White being a man of straw. They said the pleaded head of interest after default was speculative since no such term was agreed and there was no basis to conclude either borrower would have accepted it. They contended that costs incurred in suing Mr White were too remote, lay outside the scope of any duty, and were not recoverable as damages against the solicitors. Finally, they submitted that losses tied to the sale of the claimants’ home were too extreme to be within the contemplation of a solicitor instructed to document a private loan.
Claimants
The claimants responded that their case was a straightforward professional negligence claim. For present purposes negligence had to be assumed and the court should then ask what would have happened absent the breach. They contended that, with competent drafting and execution, they would either have been repaid with continuing interest in the event of delay, or would not have entered the loan at all because proper checks would have exposed irregularity. They rejected the abuse point as misconceived. The negligence trial would address a different issue from the 2018 proceedings, namely the hypothetical consequences of proper legal work. They submitted that interest accruing after default is a commonplace protection in commercial lending and that there was a realistic prospect of proving that both borrowers would have accepted a reasonable provision of that kind. They characterised the costs of pursuing Mr White as mitigation costs, recoverable if reasonably incurred, and said that whether the sale of home losses were within scope and foreseeable was a factual question that should not be decided summarily.
The decision
Not an abusive collateral attack
Master McQuail rejected the abuse of process argument. The negligence claim did not seek to impugn the findings made in 2018. It posed a different question: what would likely have happened if the defendants had exercised reasonable care in 2014 when documenting and securing the loan and managing execution and proof of identity. The earlier judgments decided whether Ms Emmanuel had proved forgery on the evidence then available between those parties. The present case is between different parties and is concerned with the solicitors’ performance, not with overturning the earlier outcome. This is the paradigm situation in which a negligence claim is permissible following previous litigation. It is neither manifestly unfair nor an affront to justice to allow such a case to proceed.
Whole-claim threshold not met
On the overall application the Master held that the claim, taken at its highest for present purposes, was not bound to fail. The factual matrix is complex. Questions of what a reasonably competent solicitor would have done, what terms would probably have been agreed, and what litigation and enforcement steps were reasonably undertaken, are all fact sensitive. The defendants’ invitation to treat the pleaded case as a mere attempt to insure against borrower insolvency was too blunt an instrument. Those issues required trial.
Interest accruing after default
The Master declined to strike out or summarily dismiss the claim for the loss represented by the absence of an interest after default provision. In the counterfactual world where the defendants had acted competently, the court would need to assess whether a reasonable clause providing for continuing or default interest would probably have been included and accepted. There was nothing in the contemporaneous material indicating that such a clause would have been a deal breaker. In a commercial loan of this kind one would ordinarily expect some provision addressing interest after the due date. The fact that no such term existed in the actual contract is not determinative of what a competent solicitor would probably have achieved. Whether the borrowers would likely have accepted a reasonable clause is a matter for evidence, and potentially expert evidence as to lending practice, and cannot be resolved on a summary application.
Mitigation and the costs of pursuing Mr White
The defendants’ attempt to exclude the costs of suing and enforcing against Mr White at an interlocutory stage also failed. The Master held that the correct prism for such costs is mitigation. The question is whether, at the time those steps were taken, it was reasonable for the claimants to pursue them. Hindsight does not set the standard. That Mr White ultimately proved impecunious does not mean that the attempt to enforce was unreasonable when initiated. Nor is the scope of duty argument a complete answer. The solicitors may not have warranted borrower solvency, but if their negligence placed the claimants in a position where enforcement steps became necessary, the costs of reasonable mitigation are not in principle too remote from the breach. Whether the claimants acted reasonably, what they knew and when, and whether alternative courses were open, are questions that must be determined at trial.
Losses linked to the sale of the home
The court also refused to strike out the claim for consequential losses said to be associated with the sale of the claimants’ home. The pleadings set out the claimants’ financial position at the time of the retainer, including that they were retired and reliant on limited income, and that the solicitors were made aware of their circumstances and their need for protection in the transaction. On those pleaded facts it is at least arguable that such losses were within the solicitors’ contemplation and within the scope of the duty to protect the clients from the financial risks that competent documentation and safeguarding measures are designed to address. Whether the causal chain and foreseeability are made out on the evidence is a trial question, not a matter for summary disposal.
Alternative counterfactual
Although the claimants had emphasised the scenario in which the loan would have proceeded competently documented, the Master noted that the alternative, namely that with competent checks the claimants would not have lent at all, was in play and could, if necessary, be pleaded by amendment. The defendants’ own stance tacitly acknowledged that the parties’ hypothesised choices were issues in the case. The court would take a pragmatic approach and would not shut out a viable counterfactual on a pleading technicality at an interlocutory stage.
Scope of duty and modern analysis
The court was alive to the modern scope of duty analysis drawn from Hughes-Holland and Manchester Building Society. The defendants argued that much of what the claimants sought to recover fell outside the risk the solicitors undertook to protect against. The Master did not determine the point finally, which would have been inappropriate. Instead, the court recognised that the scope question itself is fact sensitive here. It depends on the nature of the retainer, the advice and tasks undertaken, the claimants’ financial circumstances known to the solicitors, and the practical protections that competent performance would probably have achieved. Those matters require evidence. The scope filter cannot be deployed at the gateway to exclude the claim as a whole, or selected heads of loss, unless the answer is clear. It was not.
Outcome and practical pointers
The application to strike out or for summary judgment was dismissed in its entirety. The claim will proceed to trial on the pleaded heads of loss, including the claim for interest after default, the enforcement costs incurred in pursuing Mr White, and the consequential losses linked to the sale of the claimants’ home.
The judgment offers several practical reminders.
First, the strike out and summary judgment thresholds remain demanding. Where allegations of professional negligence turn on fact sensitive counterfactuals and on the interplay between retainer scope, causation and loss, early disposal will often be inappropriate. Attempts to recast such disputes as mere discontent with borrower insolvency, divorced from the alleged breaches, are unlikely to prevail where the pleaded case is coherent and supported by primary material.
Second, a negligence claim against a former solicitor following earlier litigation is not inherently abusive. The court will examine whether the new claim seeks to re argue a decided issue between the same parties or instead raises the distinct, and permissible, question of what would probably have happened if the solicitor had acted competently. It will rarely be an abuse to proceed on the latter basis.
Third, interest after default is a routine protection in commercial lending. Its absence can found a real head of loss if a claimant can show that competent drafting would probably have secured a term that was acceptable to counterparties and would have produced a materially different financial outcome. Whether such a clause would probably have been included and accepted is usually a matter for trial.
Fourth, litigation and enforcement costs can, in principle, be recoverable as mitigation if they were reasonable when incurred. The court will resist hindsight and will examine the contemporaneous context and choices made. Scope of duty arguments will not necessarily exclude such costs as a matter of law at an interlocutory stage.
Fifth, consequential losses of a more personal kind, including the financial consequences of selling a home, are not automatically too remote in a professional negligence claim. The question turns on what the solicitor knew or ought to have known about the client’s position and on the nature of the risks against which the solicitor’s work was retained to protect. If a client’s financial vulnerability is known, and safeguarding the client’s position in a high risk transaction is central to the retainer, the argument that such consequences were within contemplation is at least one that a trial court should consider.
Conclusion
Avison is an illustration of the court’s reluctance to prune complex professional negligence claims at the interlocutory stage where the pleaded case raises plausible, fact dependent counterfactuals and where the scope of duty analysis cannot be resolved without a proper evidential foundation. For transactional solicitors, it emphasises the importance of clear, protective drafting in private lending, rigorous attention to identity, execution and security mechanics, and a written record that reduces the scope for later dispute. For litigators, it confirms that mitigation decisions will be judged by their contemporaneous reasonableness, not by their ultimate success, and that arguments about scope and remoteness are best deployed once the factual landscape is mapped at trial.
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Disclaimer. This article provides general information only. It does not constitute legal advice and must not be relied upon. You should obtain legal advice on the facts of your case.