The Court of Appeal has found that a solicitor was negligent in his handling of a long-running claim against Hibernian Life Ltd., overturning the High Court’s dismissal of his former clients’ negligence action. It remitted the case to the High Court for assessment of damages.
Emerald Isle Assurances and Investments Ltd., a life insurance agent, and its directors, Timothy Maverly and James Morey, had sued Hibernian over the termination of a tied agency agreement. Their claim was settled in 2010 for €300,000, inclusive of costs, after their lawyers advised that a motion to dismiss for delay was likely to succeed.
The clients then brought negligence proceedings against their former solicitors. The High Court dismissed their claim in January 2012. It found that the solicitor should have given a clearer warning about the consequences of delay, but concluded that a more detailed warning would not have changed the clients’ course of action.
On appeal, the court said the solicitor’s failings went beyond the warning. From 2003, the clients and their forensic accountant disagreed over the value of the claim. The accountant was prepared to support a claim of about IR£2.8 million, while the clients sought about IR£6.25 million. The court described the following four years as an “unimpressive display of solicitors’ professional practice”.
The court said the solicitor should have addressed the impasse, clearly explained the available options and their risks, and followed up with written advice. Those options included seeking senior counsel’s advice, engaging another accountant, or proceeding on the evidence of the company’s in-house accountant. The court said the clients were entitled to maintain their position on the claim’s value, while understanding the risks of proceeding on that basis.
The court also criticised a 2008 letter that gave the impression the solicitor had arranged settlement discussions with Hibernian’s lawyers. He had called the lawyer handling the matter, left a message and received no reply, but did not follow up or correct the impression given to his clients.
The Court of Appeal held that the High Court had been wrong to conclude that proper advice would have made no difference. It said the evidence did not show that the clients were incapable of taking advice, noting that they accepted a settlement in 2010. The appeal was allowed and the case remitted for assessment of damages; the judgment does not state an amount of damages awarded.