Lord ordinary rules firm of solicitors did not provide negligent advice in contentious negotiation between freight and haulage businesses
A freight company that sought over £230,000 from a firm of solicitors on the basis that it provided negligent advice during a contentious settlement discussion with a former contractor has been unsuccessful in an action before the Outer House of the Court of Session.
About this case:
- Citation: CSOH 75
- Court:Court of Session Outer House
- Judge:Lord Braid
Ronnie O’Neill Freight Solutions Ltd had instructed MacRoberts LLP to provide advice relating to the termination of an arrangement with a subcontractor of the business that suddenly terminated its arrangement with the pursuer in April 2020. The business ceased trading in 2021 following the conclusion of settlement negotiations with the subcontractor, and it was averred that the settlement obtained was much worse than it could have been had appropriate advice been given.
The case was heard by Lord Harrower. Watt, advocate, appeared for the pursuer and A McKinlay, advocate, for the defender.
No more than stateable
In the course of its business, the pursuer entered into an agreement with a haulier, UP Logistics Ltd, whereby the pursuer’s customers would place orders directly with UPL for the uplift, transport, and delivery of their pallets. UPL would then pay a commission to the pursuer for all pallet business passed to it in this way. This agreement persisted for around three and a half years until on 9 April 2020 UPL emailed the pursuer purporting to terminate the agreement with immediate effect.
Immediately upon emailing the pursuer, UPL emailed the pursuer’s two largest customers informing them of the termination and inviting them to continue trading with UPL, which they did. The pursuer’s Mr O’Neill sought immediate advice from the defender, which advised him to pursue a commercial settlement. After several months an agreement was reached with UPL in the sum of £40,000, however the pursuer ceased trading in 2021, having been unsuccessful in persuading many of its customers to switch hauliers.
Mr O’Neill contended that the defender ought to have advised him to seek interim remedies from the outset and that the UPL agreement was arguably non-terminable, and the failure to give such advice was negligent. Had non-negligent advice been given, the pursuer would have accepted it, and thus achieved a better outcome than it did, with the total loss valued at £232,500.
The defender resisted the pursuer’s case primarily on the basis that the advice given was not negligent. Even if it was, the advice given had no causative effect and ultimately the action would have settled on the same basis. The argument that the pursuer contended ought to have been made was no more than stateable, and therefore was not one on which advice needed to be given.
Set the bar too low
In his decision, Lord Harrower observed: “I agree with counsel for the defender that this is, in large measure, not really a ‘practice’ case at all. To the extent that there is a normal practice when a client is involved in a contentious matter, it is to consider the options open to the client and give advice thereon, within a reasonable timescale, which is what the defender did. The real dispute is whether the advice given was such that no ordinarily competent solicitor, exercising ordinary care, would have given it.”
Noting there were opposing expert witness views on that point, Lord Harrower said: “The short answer to the pursuer’s claim of negligence is that there is no rational basis for rejecting [the expert evidence] to the effect that not all ordinarily competent solicitors would advise a client about all arguments which were merely stateable, and that the non-terminability argument was sufficiently weak that advice need not have been given about it; further that not all ordinarily competent solicitors would have advised the pursuer to seek an interim interdict.”
He explained further: “Such a practice would be virtually meaningless and unworkable: to require advice on all stateable arguments would be to set the bar far too low, and would set solicitors, particularly those advising on an urgent problem, a virtually impossible task. The depth of the advice must necessarily depend on the circumstances in which it is given and is ultimately, as Mr Blyth accepted in cross-examination, a matter of judgment.”
On whether advice on interim remedies ought to have been given, Lord Harrower added: “It was reasonable of the defender to recommend that the pursuer follow a strategy of trying to achieve a commercial settlement without recourse to litigation of any sort. Seeking interim orders is attendant with risk; not only the risk of being found liable in expenses should interim interdict not be granted; but the risk of being found liable in damages to the interdicted party, should interim interdict be granted which was ultimately found not to have been warranted.”
He concluded on causation: “Having accepted advice to accept £40,000, which included about £30,000 representing commissions for three or four months, when he had been told that there was a possibility, but an unlikely one, that the court might award commission based on a notice period of nine months, it is simply not credible to suppose that in the world of the counterfactual [the pursuer] would have instructed litigation to be run to proof on the basis of a different argument which he had also been told was unlikely to succeed.”
Lord Harrower therefore granted decree of absolvitor in favour of the defender.