Perry v Raleys Solicitors judgement may stem the tide on under-settlement claims

It is hoped that the professional negligence case, which dealt with a historic ‘loss of a chance’, will deter similar claims arising in the future, where the claimant cannot prove that their potential claim would have been successful.

In a long-anticipated decision, the Supreme Court has handed down judgement that a retired miner, Frank Perry, who argued that he had suffered loss of a chance of greater compensation due to the negligence of his solicitors, is not entitled to damages from the firm, as the solicitors’ breach of duty had not caused him any loss.

The professional negligence case is hoped to prevent similar future actions, where the claimant has already settled the case and received compensation in an out of court settlement – known as ‘under-settlement’ cases. The case decided whether firms should be historically liable for claims they failed to advise former clients to pursue, and whether the claimant must prove their claim is valid.

The facts

Mr Perry, a retired miner, suffers from Vibration White Finger, a condition which affects the strength of his hands. The condition is not uncommon, and was proven to be caused by overuse of vibrating mining tools in the cases of many miners in the late 20th century. After a group of test cases in the late 1990s established that the National Coal Board had failed to take reasonable steps to prevent this widespread condition, the Department for Trade and Industry set up a compensatory scheme, with award amounts based on the severity of the injury.

Mr Perry settled his case with his employer, without the use of the compensatory scheme, but later claimed that he had received poor advice from his solicitors, and that otherwise, he would have also claimed through the scheme, thus receiving greater compensation overall.

The judgement

The solicitors’ firm Raleys, now in administration, admitted it had breached its duty of care towards Mr Perry by failing to advise on the government compensatory scheme. However, Mr Perry was not successful. At first instance, the court found that although the firm had been negligent, they had not caused Mr Perry a loss of a chance of greater compensation via the scheme, as his injury was not severe enough. This was reversed on appeal, but has now been restored by the Supreme Court.

Impact of the case

It is possible that the case, which dealt with a negligence action several years after a settlement had been reached, will discourage similar actions in the future. As the decision by the first instance court and the Supreme Court was reached on the ground that Mr Perry was not injured severely enough, rather than on any principle that under-settlement cases should not be retrospectively examined, this cannot be guaranteed. It is therefore very possible that professional negligence cases may still arise in under-settlement circumstances. However, as the court has found that the claimant must prove that their potential claim would have been valid, this may seriously discourage future claims.

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