In  Percy v White & Anor [2022] EWCA Civ 493 the Court of Appeal overturned a decision based on a contribution notice. This case makes it clear that a party bringing contribution proceedings still has to establish breach and causation by the defendant to the contribution notice.   There had been a misreading of Section 1(4) of the Civil Liability (Contribution) Act 1978.  A solicitor had settled a negligence claim against them. This did not lead to any inference that the barrister who had advised had been negligent or that the negligence had caused any loss.


“Section 1 (4) relieves the contribution claimant from having to establish his own liability, but it does not absolve him from establishing the liability of anyone else from whom he seeks contribution.”



The defendant in this case was a barrister.  A former client had issued negligence proceedings against their former solicitors and the current defendant. The client’s claim against the defendant barrister was discontinued. The defendant solicitors then joined the defendant barrister into the action as an additional party.

The former client was successful in the action against the solicitors.  There was then a settlement of the action between the solicitors and the barrister. There was then a trial of the proceedings between the solicitor and the barrister. This was determined in the solicitors’ favour on the basis of the findings made at earlier hearings.  The matter then proceeded to trial between the solicitor and the barrister.


The Barrister’s appeal to the Court of Appeal was successful.  The burden was on the solicitors to prove that the barrister had been negligent. They could not simply rely on observations or findings made by judges in previous hearings.

Lord Justice Lewison
    1. I agree with the Chancellor that the appeal must be allowed for the reasons he has given. But since Mr Pooles QC stressed the importance of this appeal to those who practise in the field of professional negligence, I add a short judgment of my own.
    1. Section 1 (4) of the Civil Liability (Contribution) Act 1978 provides:
“A person who has made or agreed to make any payment in bona fide settlement or compromise of any claim made against him in respect of any damage (including a payment into court which has been accepted) shall be entitled to recover contribution in accordance with this section without regard to whether or not he himself is or ever was liable in respect of the damage, provided, however, that he would have been liable assuming that the factual basis of the claim against him could be established.”
    1. The leading case on the operation of that sub-section is the decision of this court in WH Newson Ltd v IMI plc [2016] EWCA Civ 773[2017] Ch 27. The facts of that case are of crucial importance in understanding why it decided what it did. On 20 September 2006 the European Commission decided that there had been an unlawful price-fixing cartel in the market for copper and copper alloy fittings. The decision was addressed to 23 undertakings, including IMI and Delta. Both were found to have participated in the unlawful cartel. The effect of a decision of that kind is that all persons to whom it is addressed are bound by it. WH Newson and others brought “follow-on” proceedings against IMI. IMI in turn served Part 20 claims on fellow cartelists, including Delta. IMI had defended the proceedings on a number of grounds, including an allegation that the claim against it was statute barred by limitation. IMI subsequently settled with the claimants, and sought contribution from Delta. The question was whether Delta could rely on the limitation defence. This Court held that it could not. In the course of his judgment Sir Colin Rimer said:
“[56] The premise of a contribution claim by D1 based on section 1(4) is that there has been a bona fide settlement or compromise of C’s claim against D1. It will no doubt be open to D2 to argue in any contribution proceedings that the settlement or compromise was not a bona fide one, for example that it was a collusive, corrupt or dishonest one (see the Law Commission report, para 56), and if such a case is made good the provisions of section 1(4) will not avail D1. In this case, however, there is no suggestion that D1’s settlement with C was other than bona fide and so section 1(4) is in play.
[58] Whether, however, the case is simple or complicated, in arriving at a bona fide settlement C and D1 will respectively have assessed the relative strength or weakness of their respective cases in the litigation and have brought into account the commercial considerations bearing upon it. If the settlement involves a payment by D1 to C, then a claim by D1 for contribution to it by D2 will be one to which section 1(4) applies. The central feature of section 1(4), expressly spelt out in its main part down to the proviso, is that in any such claim there will be no question, and therefore no inquiry, as to whether or not D1 was in fact liable to C. In so providing, section 1(4) gave clear effect to the Law Commission’s recommendation.
[59] The proviso of course shows that D1 must still prove at least something in order to succeed against D2. That is that “he would have been liable [to C] assuming that the factual basis of the claim against him could be established”. In my judgment the sense of that is that all that D1 needs to show is that such factual basis would have disclosed a reasonable cause of action against D1 such as to make him liable in law to C in respect of the damage. If he can do that, he will be entitled to succeed against D2. There may of course remain issues as to quantum, as to which section 1(4) makes no assumptions.” (Emphasis added)
    1. It is the sentence that I have emphasised that has caused the problem. On the facts of that case, where both IMI and Delta had already been found by the Commission to have been joint participants in an unlawful cartel, the sentence is correct. But it cannot be extrapolated into a general rule.
    1. Take a simple example. Suppose that three cars are involved in a road traffic accident in which one of the drivers is injured. He brings a claim against the driver of one of the other two cars. In turn that driver settles the claim with the claimant and claims a contribution from the owner of the third car. It is surely open to the contribution defendant to say that he was not in fact the driver; or that the accident was entirely caused by the fact that the contribution claimant was driving on the wrong side of the road. Section 1 (4) relieves the contribution claimant from having to establish his own liability, but it does not absolve him from establishing the liability of anyone else from whom he seeks contribution. That is the mischief that the Law Commission identified in the report which led up to the passing of the Act. As that report stated at [45]:
“In our working paper we suggested that it was unsatisfactory to require the ‘settling’ defendant to prove his own liability as a tortfeasor in order to entitle him to contribution from the other.” (Emphasis added)
    1. Their recommendation (which was accepted) was that:
“a person who had compromised a claim made against him so as to benefit some other possible defendant should have the right to claim a contribution from the other defendant provided that the other could be shown to be liable; we added that it should not be an answer to such claim that the person who settled the claim would not have been held liable if the action against him had been tried.” (Emphasis added)
    1. In other words, the contribution claimant must still show that the contribution defendant was liable.
    1. There is another reason why that sentence cannot be extrapolated into a general principle. Article 6 of the European Convention on Human Rights and Fundamental Freedoms provides that:
“In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair and public hearing within a reasonable time by an independent and impartial tribunal established by law.”
    1. If Mr Mayall’s liability were to be conclusively determined against him by a settlement made between two parties who are suing him (without any determination by a court) that would, on the face of it, deprive him of his right to have his liability determined by an independent and impartial tribunal. It is not, of course, incompatible with article 6 for Merriman White’s own liability to be determined by an agreement to which it is a party, because it is always open to one party to waive its rights under article 6. But Mr Mayall has not waived his.
    1. In the present case the judge said at [81]:
“As Mr Mayall is unable to avail himself of a “collateral defence” because no factual assumptions may be made in respect of them, I conclude for the reasons given, and based on the permitted assumed facts, the breach of a duty of care pleaded in the Negligence Claim resulting in loss and damage gives rise to a reasonable cause of action between Mr Percy and MW. It follows, without more, that MW is entitled to a contribution from Mr Mayall: see Newson paragraphs 59-61.” (Emphasis added)
    1. I consider that the words I have highlighted were wrong. In my judgment, the judge was wrong to side-step the question whether Mr Mayall was negligent. The settlement between Merriman White and Mr Percy established only that Merriman White had been negligent. It did not establish that Mr Mayall had been. The facts are, in my judgment, fundamentally different from those in Newson where both IMI and Delta had already been found to have been participants in the unlawful cartel. As against each other, neither was entitled to go behind that binding decision. That is not this case. No court has yet found that Mr Mayall was negligent.
    1. There is another point to be made here. The judge appears to have decided that because Mr Mayall could not challenge the decision of Mr Donaldson QC his liability was established. There are, in my judgment, two errors here. First, just because a barrister gives advice which turns out to be wrong, it does not follow that the advice was negligent. We have all had experience of a court reaching a decision contrary to the advice we have given to a client. Although the decision itself has been overtaken by later developments, it is still worth recalling the words of Lord Wilberforce in Saif Ali v Sydney Mitchell & Co [1980] AC 198:
“Much if not most of a barrister’s work involves exercise of judgment – it is in the realm of art not science. Indeed the solicitor normally goes to counsel precisely at the point where, as between possible courses, a choice can only be made on the basis of a judgment, which is fallible and may turn out to be wrong. Thus in the nature of things, an action against a barrister who acts honestly and carefully is very unlikely to succeed.”
    1. Mr Mayall’s Defence is peppered with assertions that even if the application for permission to bring the derivative action was not appropriate, he was “reasonably entitled to consider it” to be so. Paragraph 19.4 pleads in terms that even if his advice was incorrect it does not follow that no reasonably competent barrister would have concluded that the derivative action was inappropriate. This aspect of Mr Mayall’s defence does not feature in the judge’s decision; and he does not explain why. Mr Mayall was entitled to a judgment, not on whether his advice was right or wrong, but on whether it was negligent.
    1. The judge was shown two cases in which, on analogous facts, judges had given permission to bring a derivative action in preference to other remedies (e.g. a winding up or an unfair prejudice petition). One was a decision of HHJ Keyser QC (Hughes v Weiss [2012] EWHC 2363 (Ch)) and the other was a decision of the judge himself (Saatchi v Gajjar [2019] EWHC 3472 (Ch)). The Chancellor has set out the relevant passages from those decisions. The judge dealt with those cases very shortly at [108] but only in the context of his apportionment of liability, rather than in considering the prior question whether Mr Mayall was negligent at all. What he said was:
“In my judgment reliance on later authority where the court declined to make a winding up order is misconceived. Each case is dealt with on their own facts.”
    1. No doubt it is true that each case is dealt with on its own facts; but it was still necessary to deal with the question not simply whether Mr Mayall’s advice was wrong, but whether it was negligent. It is notable that the judge does not use the word “negligent” or negligence” in relation to Mr Mayall anywhere in his judgment.
    1. Second, I do not consider that the judge was right to say that Mr Mayall was necessarily precluded from challenging Mr Donaldson’s decision. It is, of course, the case, that in some circumstances a collateral attack on a first instance decision will amount to an abuse of process. That was the case in Laing v Taylor Walton [2007] EWCA Civ 1146, [2008] PNLR 11. The underlying claim concerned the interpretation of a loan agreement. HHJ Thornton QC decided that question adversely to Mr Laing. Mr Laing himself then began a second action against his solicitors, alleging that they had been negligent in the drafting of the agreement. The second action was struck out as an abuse of process, but it is important to understand why. Buxton LJ said:
“[22] The second, different, and more significant difficulty is however that everything said to us and to Langley J in criticism of HH Judge Thornton’s judgment could have been said to HH Judge Thornton (and mainly was so said); and could have been deployed in the appeal from HH Judge Thornton that was never brought. What is sought to be achieved in the second claim is, therefore, not the addition of matter that, negligently or for whatever reason, was omitted from the first case, but rather a relitigation of the first case on the basis of exactly the same material as was or could have been before H.H. Judge Thornton.”
    1. It was because no new material was adduced in the second action that it was an abuse of process. Buxton LJ went on to say at [27]:
“The difference is that, as shown in [19] above, in order to succeed in the new claim Mr Laing has to demonstrate not only that the decision of HH Judge Thornton was wrong, but also that it was wrong because it wrongly assessed the very matters that are relied on in support of the new claim. That is an abusive relitigation of HH Judge Thornton’s decision not by appeal but in collateral proceedings…”
    1. It is, in my judgment, clear that the fact that Mr Laing (who was bound by HHJ Thornton’s judgment) did not appeal was a highly significant factor in leading to the conclusion that the collateral challenge was abusive. But this case is different. In the first place, unlike Mr Laing, Mr Mayall is not bound by Mr Donaldson’s judgment. Nor, for that matter, are Merriman White. In Hunter v Chief Constable of West Midlands Police [1982] AC 529, 541 Lord Diplock said:
“The abuse of process which the instant case exemplifies is the initiation of proceedings in a court of justice for the purpose of mounting a collateral attack upon a final decision against the intending plaintiff which has been made by another court of competent jurisdiction in previous proceedings in which the intending plaintiff had a full opportunity of contesting the decision in the court by which it was made.”
    1. Mr Mayall was not a party to Mr Donaldson’s decision. No judgment was given against him; and he is therefore outside the key mischief which this species of abuse of process is designed to prevent.
    1. Second, in paragraph 8 of his Defence, Mr Mayall pleads that following Mr Donaldson’s judgment, Merriman White instructed him to draft an application for permission to appeal “but failed to put [Mr Mayall] in funds to do so.” The pleading goes on to assert that because Merriman White was on the Bar Standards Board list of defaulting solicitors, he was unable to accept instructions without a payment on account. This plea therefore concludes by asserting that “any loss suffered by [Mr Percy] as a result of the lack of appeal is wholly caused by [Merriman White’s] failure to put [Mr Mayall] in funds.” This aspect of Mr Mayall’s defence also finds no place in the judge’s judgment.
    1. It is true that Mr O’Sullivan’s attendance note of 30 June 2011 records Mr Mayall having advised that the prospects of success on appeal were “only 25%.” Mr Donaldson’s decision was an exercise of judicial discretion; and the task of overturning an exercise of discretion on appeal is formidable. But that goes to the merits of this plea. It is not a reason for not considering it at all.
    1. At [95] the judge said that he declined to assess the merits of the derivative claim because that would amount to a review of findings made by a competent court. He added:
“In my judgment that would undermine rather than maintain the rule of law and put in danger the reputation of the administration of justice: Secretary of State for Trade and Industry v Bairstow [2003] EWCA Civ 321.”
    1. I regret to say that I consider that this bald conclusory statement does not explain why the judge thought that the administration of justice would be endangered on these particular facts. In Bairstow ([2004] Ch 1) Sir Andrew Morritt V-C said:
“(a) A collateral attack on an earlier decision of a court of competent jurisdiction may be but is not necessarily an abuse of the process of the court. …
(d) If the parties to the later civil proceedings were not parties to or privies of those who were parties to the earlier proceedings then it will only be an abuse of the process of the court to challenge the factual findings and conclusions of the judge or jury in the earlier action if (i) it would be manifestly unfair to a party to the later proceedings that the same issues should be relitigated or (ii) to permit such relitigation would bring the administration of justice into disrepute.”
    1. These two propositions are only consistent with each other if something more than the mere fact of challenging an earlier decision is required in order to make a later challenge abusive. But in this case the judge did not identify what that extra ingredient was. In circumstances in which part of Mr Mayall’s defence is that an appeal was precluded by Merriman White, I cannot see that it is abusive for him to argue (if he can) that an appeal would have succeeded.
    1. It was also necessary for Merriman White to establish that any negligence on the part of Mr Mayall caused “the same damage”. At [32] the judge found as a fact that Mr Mayall did not warn of the risks when it became known that the permission hearing would be contested. The risks to which the judge referred must have been the risk that permission would be refused. The judge returned to the topic later in his judgment. He said:
“[98] Mr Mayall had admitted in his defence to the Negligence Claim that damage could be caused by his failure to advise that the offer of £500,000 was attractive given the defects in the proceedings, the risk of failure to obtain permission to proceed and general litigation risk. Mr Percy was not equipped with the right advice to make an informed decision as to whether to proceed or settle the claim after mediation. The failure to warn and properly evaluate the risks involved with the permission application, negated any argument that Mr Percy would have “pressed on” regardless and ignored his advisors on issues of law that would directly affect the commercial outcome.
[99] I accept the evidence of Mr O’Sullivan that Mr Percy “was not going to simply go to trial to hear his fate from the lips of a judge”. In other words, he would have taken account of the commercial risks if he had been properly advised and settled the claim by accepting the offer. He would not have “pressed on”. The evidence of Mr Mayall was that he advised him to “press on”. Mr O’Sullivan’s evidence, tested in cross examination, was that Mr Percy was “a very commercial man” and “had no intention of going to trial if it could be compromised on the way”.”
    1. There are a number of problematic aspects in this part of the judgment. First, it has not been possible to identify where in his Defence Mr Mayall made the admission to which the judge referred. Second the failure to warn at the permission stage was not a pleaded allegation against Mr Mayall. Mr Pooles QC was able to identify a paragraph in the original Particulars of Claim which sidled up to such an allegation (paragraph 49 (7)); but did not make it clearly. But that paragraph of the original Particulars of Claim was deleted by amendment and was not included in the allegations made in the contribution notice. So the basis of the judge’s decision was an unpleaded allegation. Third, the judge did not consider what warning Mr Mayall should have given. From the perspective of causation there is an obvious difference between a warning that there is a 10 per cent chance that permission will be refused and a warning that there is a 50 per cent chance that it will be refused. The judge did not, for example, find that Mr Percy would have taken no risk at all. Fourth, the evidence of Mr O’Sullivan that the judge accepted was concerned with the risks of going to trial (on the assumption that permission had been granted). A trial would have been a far costlier and riskier enterprise than the permission stage; and Mr Mayall did advise that there were risks in going to trial.
    1. Finally, it is necessary to say something about the “reflective loss” argument. That requires looking at how Mr Percy put his case against Merriman White. After the narrative, and his allegations of breach of duty, Mr Percy pleaded in paragraph 45 of his Particulars of Claim that as a result of Mr Donaldson’s decision he was exposed to an adverse costs order. On 30 June 2011 he was ordered to pay the costs of the application subject to a detailed assessment. Although the costs never were assessed, they were said to be in the region of £221,000. Mr Percy’s exposure to that liability for costs weakened his position in subsequent settlement negotiations, and ultimately he settled for £65,000.
    1. The thrust of his claim is that had he been properly advised he would have settled for much more. The weakening of Mr Percy’s negotiating position was, he alleged, caused by his personal potential liability for costs. That was nothing to do with any company and is outside any principle that bars the recovery of “reflective loss”.
    1. Unfortunately, as a result of the course that the trial took, many of the matters which were highly material to Mr Mayall’s potential liability were never investigated. I agree with the Chancellor that to permit Merriman White to have a retrial would necessitate a complete recasting of their case and would be unfair to Mr Mayall so long after the relevant events.
  1. Accordingly, for the reasons given by the Chancellor, and these reasons, I too would allow the appeal.