King & Ors v DWF LLP & Ors [2023] EWHC 3132 (Comm)
This case concerned a claim brought by the Kings against their former legal team relating to the conduct of underlying litigation. The underlying proceedings – which had ended disastrously for the Kings – concerned a claim against external investors in their family business. As a result of inconsistencies in the Kings' oral evidence, their legal team advised them to discontinue the proceedings mid-trial, which they did.
The Kings subsequently brought proceedings against the legal team alleging dishonest breach of fiduciary duty and negligence. In particular it was alleged that the advice to withdraw the case was given not because the trial had gone badly, but because the legal team were trying to cover up their own mistakes in the pleading of the claim. This, the Kings said, created a conflict of interest which the other party had been able to exploit to secure the discontinuance of an otherwise "winning" claim.
The Kings' primary case alleged dishonest breach of fiduciary duty. A key question was whether the legal team owed fiduciary duties to the Kings at all concerning the conduct of litigation. The Court concluded (obiter dicta) they did not. The Kings' primary case also failed because their version of events was inherently improbable; the Defendant's drafting mistake in the Particulars of Claim was relatively inconsequential and arose out of an error not improper conduct.
The Kings' secondary case, alleging the Defendant had been negligent in advising the Kings to discontinue, is more interesting from a professional liability perspective. Applying well-established principles, the Court reached several conclusions which will be of comfort to defendant professionals, including:
- Concerning the manner in which counsel had exercised their judgement in advising the Kings to discontinue, the Court referred to the principle in Said Ali v Sidney Mitchell Co [1980] AC 198 that much of a barrister's job involves the exercise of judgement which is fallible and may turn out to be wrong. However, where judgement is exercised "honestly and carefully" a claim against a barrister is very unlikely to succeed. In considering whether to advise the Kings to discontinue, counsel was entitled to interpret "judicial signals" that the case was not going well.
- Relatedly, the Court warned against the dangers of attempting to disparage a professional's conduct using the benefit of hindsight. The Kings attempted to pick out actions of their legal team which might subsequently be construed as negligent. This was an impermissible approach.
- The Court said that even if counsel's advice to discontinue was negligent – which it clearly was not – the solicitors were perfectly entitled to rely on it. The principle is well-settled - a solicitor cannot blindly rely on counsel's advice if it is obviously wrong. In this instance, the conduct of the trial was exactly the type of issue upon which a solicitor would be entitled to rely on counsel's advice.
This case did not give rise to any novel points of law and was, in any event, very fact-specific – very serious allegations of dishonesty and negligence were made against the Defendant which were found to be "entirely without foundation". For professionals, however, this case does provide a useful restatement of many of the relevant principles. Professionals can take comfort from the well-reasoned judgment which recognises the realities of "being in the trenches" of hard-fought commercial litigation.
