So What are the Risks? Should I take It?

Lawyers are often asked by their clients what they think about an offer that has been made by the other side. This is one of the most difficult parts of lawyering, but one of the most rewarding, and when I do this I feel that I am really earning my fees.

Because there are no end of factors to take into account. Some of the more obvious are:

  • How the offer compares with the amount claimed
  • What your chances of success are
  • How these will affect the likely result – might you lose, or only win less
  • And how much this depends on inponderables – like how key witnesses do at trial, or what the undisclosed documents might show

But you rapidly get on to more complicated areas:

  • Will the other side pay the amount of the offer?
  • Will they be able to pay any judgment for more?
  • Can your client afford to take the case to trial?
  • Can your opponent?

And then there is the nature of the advice that you give:

  • You need to give a young, inexperienced client more advice than an older, wiser one
  • But if the client has little money you can’t spend too much time or money in doing this
  • Some problems are legal and need detailed explanation
  • Some are really matters of business and more for the client to decide

However, few clients are aware of the possible cost, or risk, of substantial litigation, and most need to be advised on this, so that they can make an informed choice on what they want to do.

Of course, not all clients have the same goals. Some want certainty, and a rapid settlement even if they might get more by pushing on. Others want to get the most possible, even if they are taking a lot more risk of failure, or significant irrecoverable expense.

No, advice of this sort is where litigators really earn their money, and it was in the spotlight recently in the case of Graham Seery v Leathes Prior [2017]EWHC80(QB) which was a professional negligence claim against a firm of solicitors in Norwich by a disgruntled client who settled a claim, with their advice, and then felt that he might have got more if he has pushed on a bit further.

What I always like about this sort of thing is the chance to read the letters of advice written by other lawyers. This one, written by Dan Chapman, was a cracker. It was given against a background of a very slippery opponent, and a claim against a company wth a doubtful financial position. The Claimant had been made offers from the other side that were getting up to £310,000 but negotiations were stalling and a decision had to be made on whether to take the offer, or make tactical steps which might get more. Part of a letter quoted in the judgment reads:

“… I have a strong feeling that we might be at the end of the road in these negotiations; I know my counterpart feels that his clients are also being ’emotive’ about the dispute and thus perspective is being lost. He feels also there is not likely to be any more movement from his clients, rightly or wrongly.

So I suggest you discuss the current offer – which totals 310k with 210k being paid up-front (I think we should be able to reallocate the figures to get it all net, so assume this for the time being) and the remaining 100k paid over 18 mths with interest – with your wife tonight. It seems to me a huge financial decision for you and your family; if we reject this now I think we will be tied down to litigation for sometime. We will need to fight the Tribunal claim, issue winding up petitions and, to gain any real value (since the Tribunal claim is worthless in real terms), issue (and succeed on) a High Court unfair prejudice claim. The costs will be enormous (not by SJ Berwin standards, of course, but huge nonetheless) and no guarantee of any return whatsoever if FWA go bust in the meantime (or manage to reallocate their assets). So take some time to seriously consider your options, and check that you and your wife are comfortable with where we are going – as I say, my very strong hunch (and I am usually right on these things) is that their offer is now their final offer. Of course, that doesn’t make it right or mean you should accept it – but I need to advise you of the consequences of rejecting what might well be their final offer. As experienced litigators, we tend to have a feel for how these sort of cases pan out, and you don’t pay me to tell you what you want to hear, but what I would advise. In this particular case, if it were me then I would accept the offer, bank the cash (as galling as it undoubtedly is to you) and get on with my life. But it is not me who is living this case, and I shall do whatever you instruct me to do!

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!”

All excellent stuff, especially the bit that I have emphasised.

In the light of this you won’t be too surprised to hear that Sir David Eady, an immensely experienced judge, now sitting in retirement, dismissed the claim. A warmer judge (Sir David being notoriously unemotional) might have congratulated the solicitors on the quality of the advice given. I do so here, for what it’s worth.

 

 

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Author: Coventry Man

A perspective from a litigation lawyer in the Midlands. After many years in Coventry I am now with David Lee Solicitors in Kenilworth, helping people with all sorts of litigation, especially property and landlord & tenant problems.

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