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15 June 2022 | Case Study | Article by Laura Zverev

Case note: Brearley v Higgs & Son (a firm) [2021] EWHC 2635 (Ch).

In order for a professional negligence claim to succeed, a claimant will need to be able to show that the professional:

  1. Owed a duty to the claimant
  2. That the duty has been breached
  3. That the breach of duty has resulted in the claimant suffering a loss.

In case of Brearley v Higgs & Son (a firm) [2021] EWHC 2635 (Ch) the Court considered the Claimants honest intention when pursuing a professional negligence claim.

In this case, the Claimants James Brearley (and his related business associates) brought a professional negligence claim against their former solicitors, Higgs & Sons. The claim related to a missed opportunity to develop a Jaguar Land Rover dealership in Wolverhampton (“the Wolverhampton opportunity”).

 

Background

Mr Brearley had previously worked for another motorship dealer Pendragon (“P”). Mr Brearley’s contract of employment with P contained restrictive covenants which would have prevented him from pursuing the Wolverhampton opportunity without P’s consent. In contravention of those restrictive covenants, Mr Brearley continued to pursue the Wolverhampton opportunity.

 

Higgs & Sons involvement

James Brearly instructed Higgs & Sons to advise in respect of the Wolverhampton opportunity.

 

P’s claim

Upon P learning of Mr Brearley’s intention to pursue the Wolverhampton opportunity, P brought a claim against Mr Brearley for breach of contractual and fiduciary duties. The claim brought by P was eventually settled by agreement between the parties.

The potential professional negligence:

It was argued by James Brearley that Higgs & Son had been negligent in that they did not advise him (and his related business associates) that they may be prevented from proceeding with the Wolverhampton opportunity in light of the restrictive covenants within Mr Brealey’s contract of employment with P.

 

The court’s decision

The case of Perry v Raleys Solicitors [2020] AC 352 confirmed that a Claimant must first prove what he would have done, had he received proper advice, before the court will consider the the loss caused by the negligence

The court confirmed that their starting position would be to presume honesty on the part of the Claimant. In the circumstances, in Brearley, it was argued by the Claimants that the Court needed to assess the likelihood of P providing its consent for the Claimant to pursue the Wolverhampton opportunity, based on the presumption that Mr Brearley would have been honest and given full disclosure to P.

Higgs & Son’s position was in line with Perry v Raleys, namely that Mt Brearley would have to first prove that he would have acted honestly in seeking P’s consent for the Claimants to pursue the Wolverhampton opportunity before the court considered whether P would have in fact consented.

Whilst the Court found that Higgs & Son had breached the duties owed to the Claimants, in part, the professional negligence claim still failed.  

The Court’s basis for dismissing the claim was that it had to determine what Brearley would have done, had he received proper advice from Higgs & Son.

Whilst the starting position for the Court is that honest behaviour on the part of the Claimant will be presumed, the Court found that a presumption of honesty cannot continue where the Court is satisfied that, after hearing evidence, the Claimant would have acted dishonestly. The Court found that Mr Brealey would not have been honest and disclosed his plans to P and would still have pursued the Wolverhampton opportunity. In the circumstances, causation was not established, and the claim was dismissed. 

This case highlights that in professional negligence claims against solicitors, whilst a presumption of honesty in respect of the Claimant will be the starting position of the court, this will not be upheld if, after hearing the evidence, the court is satisfied that the Claimant would have acted dishonestly.

Disclaimer: The information on the Hugh James website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. If you would like to ensure the commentary reflects current legislation, case law or best practice, please contact the blog author.

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