CIVIL PROCEDURE BACK TO BASICS 56: ADVISING ON THE RISKS OF LITIGATION: “CLIENTS WANT TWO INCONSISTENT THINGS”
The difficulties facing those giving advice about litigation is summed up in a judgment of Sedley LJ “Clients, I know, want two inconsistent things. They want confident advice on which they can act, and they want cautionary advice about the risks of doing so. It is a solicitor’s unhappy lot to have to try to satisfy both requirements simultaneously.”
Advising on the risks of litigation probably one of the hardest tasks the litigator faces. A client (sometimes buoyed up by watching American legal television programmes) wants a lawyer who “believes” in them and “believes” in their case. Any note of caution is taken as nigh on treachery. However litigators must advise on the risks of litigation. Even the most promising case or defence can go wrong. Often those clients that demand uncritical support of their own case are the ones who are most vehement when they fail and allege that they had been told that they had a good case.
“… you don’t pay me to tell you what you want to hear, but what I would advise”
THE DUTIES TO WARN OF RISKS
In Thomas -v- Albutt  EWHC Mr Justice Morgan rejected an argument that a barrister had been negligent because of a failure to warn of the risks of litigation.
Mr Jourdan also submitted that Mr Albutt’s advice was negligent because he failed to give advice about the risks involved in litigation generally and/or in this case in particular. Mr Jourdan relied upon the approach of the court in three cases.
In Queen Elizabeth’s Grammar School Blackburn Ltd v Banks Wilson  PNLR 300, the defendant solicitors had drafted a restrictive covenant to be entered into by the claimants when they purchased a property. Thereafter, in October 1994, the solicitors gave the claimants advice as to what the covenant meant. The advice was that certain action would not be a breach of covenant. The solicitors knew, when they gave that advice, that the covenantee was asserting the opposite. The first question before the Court of Appeal was whether there was real scope for a dispute as to the meaning of the covenant. The court held that there was. It was then held that the solicitors were negligent when they advised on the meaning of the covenant; they ought to have pointed out the possibility of and the risk of their construction of the covenant being wrong given that they were advising a lay client. Sedley LJ said at :
“Clients, I know, want two inconsistent things. They want confident advice on which they can act, and they want cautionary advice about the risks of doing so. It is a solicitor’s unhappy lot to have to try to satisfy both requirements simultaneously.”
In Hermann v Withers LLP  PNLR 28, the claimants were intending to purchase a high value residential property and it was a matter of great importance to them to know whether the owner of the property would enjoy a legal right to use a nearby garden. This involved a somewhat arcane point of property law. The defendant solicitors advised the claimants in the affirmative. In other proceedings, the court held that the owner of the property did not enjoy such a right. In subsequent proceedings which the claimants brought against the defendant solicitors for negligent advice, Newey J held that the solicitors’ opinion was a possible one and it was not negligent to form that opinion. Nonetheless, the solicitors were held to have given negligent advice. They should have appreciated, and should have advised, that the correct legal answer was open to significant argument. They should not have advised in unequivocal terms but should have warned of the existence of the contrary arguments.
These two cases involved advice given by solicitors to lay clients as to the correct interpretation of a document. They contain statements of principle as to what is involved in the duty of a solicitor to give advice in such a case. It is the duty of the solicitor to state not only his opinion as to the correct construction but he will also normally be expected to point out, where appropriate, that there are arguments to the contrary and what the consequences are of his opinion not being upheld.
Levicom International Holdings BV v Linklaters  PNLR 29 involved an allegation that the advice given by solicitors as to the meaning of a document, in circumstances where the client was advised to commence arbitration proceedings seeking relief in accordance with the advised meaning, had been too optimistic and had been wrong. I am far from clear that the judgments of the Court of Appeal lay down a general principle as distinct from assessing the detailed facts of that case. At , Stanley Burnton LJ held that the solicitors could not sensibly have advised that the meaning of the document was “clear” and they ought to have given a balanced view of the rival arguments particularly in the context of potential arbitration proceedings. In the light of Mr Jourdan’s submissions as to there being a 65% chance of success in this case, it is interesting to note that the Lord Justice thought that a solicitor should only give prospects of success “in the region of, but not less than, 70 per cent” when he was “very confident indeed” as those prospects of success were “high”.
I am not persuaded by those decisions, or otherwise, that Mr Albutt was negligent because he failed to warn that there were risks in litigation generally, or in this case in particular. At all times, he was instructed by solicitors. The two solicitors involved, Mr Davies and Mrs O’Connor could be expected to be fully aware that there are risks involved in litigation. Indeed, both Mr Davies and Mrs O’Connor gave evidence to that effect. At the conference on 6 January 2009, Mr Albutt was not asked to advise on the merits. At the conference, the prospects of success were not clear, not least because the protocol letter relied on a large number of factual assertions which were strongly disputed by Mr and Mrs Thomas. He could not be expected to predict the outcome of the case at that point and he did not do so. He correctly distinguished between the possible outcome where Mr and Mrs Thomas were involved in some misconduct and the possible outcome where they were not so involved. As to the comment made by Mr Albutt on 23 February 2009, this comment was made to a solicitor, Mrs O’Connor, and she, rightly, did not take it literally. The conferences on 8 and 23 July and 5 August 2009 were for the purpose of preparing the evidence which was to be served on behalf of Mr and Mrs Thomas. I have held that Mr Albutt’s belief in the prospects of success at the time of those conferences was not a negligent belief. He was not asked during those conferences to assess the prospects of success. So far as he knew, Mr and Mrs Thomas were determined to fight the judicial review and his job was to get on with it. On 29 September 2009, he did express his opinion on the case more generally and he expressed the view that it was well worth fighting the judicial review and that it was difficult to predict the course of the litigation. In that context, I do not regard the reference to the risks as to costs being “low” as inappropriate or negligent.”
In Seery -v- Leathes Prior (a firm)  EWHC80 (QB) Sir David Eady dismissed a claim for negligence against a firm of solicitors. The judgment contained a letter from the solicitor to the client. I have lost count of the number of people who have told me that they have used this letter as a model.
“Please don’t misunderstand me – I (and my firm) will be more than happy to fight this all the way. However, I have a duty to ensure that you (and your family) are fully aware of what you are getting yourselves into. I don’t want to be walking out of the High Court in 2 years time, telling you that whilst we have won the total damages you are able to recover from FWA amount to zero since the company has gone into liquidation, and then handing you my firm’s bill for 70k, at which point you might wish you had accepted the 310k on offer! You would not be too pleased with me, either, if I had not have advised (sic) you to accept that 310k! And then I would be getting sued for negligence!”
“… you don’t pay me to tell you what you want to hear, but what I would advise”
There is relatively little guidance given on the duty to advise on “the risks of litigation”. There is some discussion in the SRA “Walking the line: the balancing of duties in litigation”.
There is an interesting definition of litigation risks in the Clyde & Co article: Litigation Risk – A necessary evil or Can it Be Avoided?