A barrister has been ordered to pay 40% towards the cost of a law firm’s negligence settlement – even though an action against him was dropped.
The barrister was instructed by the law firm Merriman White in a dispute between joint-venture (JV) partners, where one partner claimed the other had stolen assets from the JV.
The claimant was offered £500,000 in settlement of his claim at mediation. However he was not sufficiently advised on the merits of accepting the offer or that should the court refuse permission for any subsequent proceedings, he would be unable to negotiate a deal.
When the court did in fact refuse permission for the case because it did not meet the relevant threshold test, the claimant started a negligence claim against both the solicitors and barrister to recover his loss.
Merriman White settled the negligence claim before it went to trial and the claimant agreed to drop his claim against the barrister, if both sides paid their own costs. Merriman White then started an action against the barrister, claiming a contribution from him towards its negligence pay-out under the Civil Liability (Contribution) Act 1978.
In court, the barrister argued that he was not liable to contribute to the settlement as Merriman White would have had a defence against the claim had it gone to trial. The judge however rejected the argument that Merriman White could have defended the claim. He ruled that under the Contribution Act, the law firm did not have to prove that they would have lost the case to claim contribution from the barrister, but only that the original claimant had a reasonable cause of action against the firm.
The judge concluded that responsibility for the loss fell more on the solicitor’s practice than the barrister and ordered him to contribute 40% towards the settlement.
James Burgoyne, Director – Claims & Technical, Brunel Professions commented. “This case shows the reluctance of the courts in contribution claims to try the original issues where there has been a commercial settlement. This can feel counter-intuitive where there is a sense that the original action could have been handled better, and the claimant in the contribution action failed to adequately mitigate its loss. Nevertheless, the court has said in this case that when considering the defendants’ behaviour it only requires that they were facing a reasonable cause of action.”
Brunel Professions is a leading provider of professional indemnity insurance broking to the legal profession. To find out more call Mark Sommariva on 0203 475 3275.