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Reflecting on when your fraud claim goes badly

Most people acknowledge there is an inherent risk in litigation. That is especially the case in claims of fraud. Even with a strong case, the outcome is never certain. Those who have worked with solicitors and barristers will know that they are generally cautiously optimistic when it comes to the merits of a claim, however that is not always the case. Does confidence in the merits of a case that goes on to fail indicate a problem with the legal advice?

A recent case supported the view that failure of a litigant’s claim does not mean that a solicitor’s earlier confident views about the claim were necessarily negligent. But what if the solicitor clearly got things wrong; mismanaged the claim, perhaps failed to spot or fully investigate a fraud? What are the routes for redress and how can we help?

Summary

  • An aspect of a solicitor’s duty owed to a client involved in litigation is to take reasonable steps to ensure the prospects of success of the litigation are accurately conveyed.
  • Two lawyers may hold differing opinions without either being unreasonable.
  • Fraud claims require specialist knowledge and there is potential for mishandling such claims.
  • There are proposals to slash the time allowed for clients to make complaints about solicitors to the Legal Ombudsman.
  • Clients may be left with no option but to consider a professional negligence claim.
  • Such claims are not straightforward, but we can help to assess where things may have gone wrong and to develop a strategy for redress.

No negligence

The claim in the case of Mervyn Lambert Plant Limited, Mervyn Lambert v Knights Solicitors (a firm) [2022] EWHC 165 (QB) was for professional negligence in tort and breach of contract. The claim arises from the Claimants’ instruction of the Defendant firm, with expertise in planning law, between September 2016 and August 2017 in relation to a proposed development at a site in Bressingham, Norfolk. The Claimants opposed the development, and after planning permission was granted, they brought a judicial review claim seeking to challenge it. Permission to bring the judicial review was refused.

The Claimants pleaded a number of allegations of negligence and breach of contract in relation to the advice they received from the Defendant in relation to the challenge. The key allegation was that the judicial review of SNC was “doomed from the outset”, and that had the Claimants been properly advised, and in particular had they had been told of counsel’s views on the case, they would never have pursued the claim.

In tort, it was accepted that an aspect of a solicitor’s duty owed to a client involved in litigation is to take reasonable steps to ensure the prospects of success of the litigation are accurately conveyed. It was also not disputed that the various contractual terms imposed similar obligations on the Defendant. It was accepted that to establish a breach of duty, the Claimants had to establish that any alleged error was one no “reasonably competent member of the relevant profession would have made”.

It was held in this case that the way in which the solicitor had conveyed the views of a barrister (orally rather than in writing) was not negligent, although the judge did comment that had it been conveyed in writing the resulting litigation would likely have never occurred. The key headline was the acknowledgement that two lawyers may hold differing opinions without either being unreasonable.

This case serves as a reminder that it is difficult to establish negligence against a solicitor. The question is whether the solicitor’s advice is such that no reasonably competent solicitor would have given it, taking all relevant circumstances into account.

Fraud claims require specialist advice, and equally, it is likely that a specialist would quickly be able to establish whether a fraud claim had been mismanaged or whether opportunities had been missed as a result of the solicitor not considering fraud.

Handling fraud claims

As a result of the high bar required to prove fraud, often solicitors can shy away from advising a client to bring a fraud claim. It is right to be cautious when alleging fraud, and certainly unsubstantiated claims of fraud will not assist a claimant. However, where the evidence points to the possibility of fraud it would be wrong to dismiss such a claim or fail to investigate it fully just because it is more difficult to prove. There are often advantages when it comes to remedies if fraud can be made out. For example, a limitation clause does not apply to a successful claim for fraudulent misrepresentation.

Fraud is a specialist subject, and if handled correctly it can prove to be a useful weapon in a claimant’s armoury. However, bringing a fraud claim is not always plain sailing. So, what can you do when things go wrong, and you feel your solicitor is at fault?

Routes for redress

The Legal Ombudsman has recently announced plans to slash the time allowed for clients to make complaints about solicitors. The current rules allow people to bring a complaint within six years of an alleged mistake, or within three years of discovering an issue. The Ombudsman is proposing to cut both these limits to one year for all new cases. This may impact on the number of claims being referred to the Legal Ombudsman.

Instead, clients may be left with no option but to consider a professional negligence claim against a former solicitor. At Tenet, we have specialist knowledge and expertise in both fraud and professional negligence, therefore we are best placed to advise you if your claim has not turned out as you had hoped. Alternatively, if you would like a second opinion on a claim or a view as to whether your claim is being handled correctly, we can offer an expert view.

Should you suspect that you may benefit from a review of your claim, please do not hesitate to get in touch at hello@tenetlaw.co.uk

Authors: Esther Phillips, Elaine Mitchell, Arun Chauhan

Published on March 7, 2022

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