Where not one but multiple professionals appear to have been negligent, an injured party can be left feeling all the more bewildered and dismayed. Regrettably, the same party can then be faced with the added dilemma of having to decide which to sue. In this article, we discuss the issues to consider in what can be a complex decision-making process.
The range of activities undertaken by traditional and emerging professions is vast and increasing. As a result, the circumstances in which professional negligence claims can and do arise is virtually limitless. However, legal liability on the part of multiple professionals tends to fall neatly into three distinct categories. These are:
In determining which to sue when there are potentially multiple defendants, the starting point is often to identify into which of these categories a particular claim is likely to fall. We shall therefore examine each in turn.
Claims falling into this category arise where the cause of action against each professional is exactly the same, which is likely to be the case where the same evidence would support an action against each of them individually. As Lord Justice Sargent explained in The Koursk (1924), for a claim to fall within this category:
“There must be a concurrence in the act or acts causing damage not merely a coincidence of separate acts which by their conjoined effect cause damage.”
Therefore, joint liability will usually arise as a matter of fact where an error or omission is committed by multiple defendants acting in concert, and as a matter of law where the liability of one party is attributable to another.
As a matter of fact, and by way of example, joint liability arose in the case of Brooke v Bool (1928). Here a landlord and his lodger were examining different ends of a service pipe in the claimant’s shop, which they thought might be the source of a gas leak. Each of them took turns in using a naked light. On the turn of the lodger, an explosion occurred, which caused damage to the claimant’s goods. In a claim for compensation against the landlord only, and amongst other grounds, the court held that the landlord was liable to the claimant for the gross recklessness of his lodger, which occurred in pursuance of a concerted enterprise of the landlord and the lodger and was their joint tort.
As a matter of law, joint liability commonly arises in cases of employee negligence, where the employer is deemed by operation of the common law to be vicariously liable for the actions of its employee. It also arises in claims against the partners of a professional firm who, by virtue of the provisions contained within sections 10 and 12 of the Partnership Act 1890, are deemed jointly and severally liable for errors and omissions of any partner acting “in the ordinary course of the business of the firm”.
In cases where liability is joint, it is sufficient to prove that one individual defendant is in breach of duty and has caused loss for the purpose of establishing liability on the part of multiple defendants. Further, where one professional defendant is sued, and negligence is successfully established, it will be liable to pay compensation for 100% of the loss caused.
It may therefore be sufficient to sue one professional party only, notwithstanding that another professional party may be responsible, either partly or more significantly, for the loss suffered. Where multiple defendants are sued, and liability is established against more than one of them, each will be individually liable for (up to) 100% of any compensation payable.
Claims within this category arise with reasonable regularity in professional negligence circles. In these cases, the activities and mistakes of the professionals concerned will be independent of each other, but will nevertheless give rise to the same loss.
A typical scenario is where a client concurrently retains a solicitor and a barrister to advise and represent him/her in an underlying claim. This was the case in Hickman v Blake Lapthorn (2005), where the claimant sought compensation from the defendant solicitors and defendant barrister for negligence in connection with the settlement of a personal injury claim. When advising on settlement terms, the barrister had given advice on a ‘best-case’ scenario basis and had failed to take account of the likelihood that the claimant would not be able to work in the future. Meanwhile, the solicitor, who was the less experienced of the two and acting largely as an observer, had failed to raise the possibility that the claimant might never find employment. The court found that the independent errors of both had resulted in a substantial under-settlement.
Another common scenario within this category arises in relation to conveyancing transactions, where both solicitors and surveyors are concurrently retained to advise on a combination of legal and property related issues. Such was the case in Theodore Goddard v Fletcher King Services Ltd (1997), where the client company claimed compensation from its appointed solicitors and surveyors for their failure to ensure that an upwards-only rent review provision was included within the leases prepared for its commercial premises. Having settled the client’s claim in full, the solicitors then commenced proceedings against the surveyors for a contribution to the settlement. The court found that the surveyors had also been negligent and were liable for 20% of the settlement sum.
While in both of the above case examples, the professionals involved were retained concurrently, claims within this category can also arise where multiple professionals act in succession. In the Australian case of Macpherson & Kelley v Kevin J Prunty & Associates (1983), the claimant had instructed two firms of solicitors in succession in relation to his personal injury claim. The first firm delayed forwarding the claimant’s case file to the second firm, who then missed the limitation deadline for the claim, having assumed that proceedings had already been issued. Both were found to have acted negligently and liability was apportioned 80:20 against the first firm.
In this category, in contrast to joint tortfeasors, and to establish liability, an injured party will need to prove that each individual defendant has acted in breach of duty and has caused loss. However, as in the case of joint tortfeasors, where liability is successfully established against one professional, it will be liable to pay compensation for 100% of the recoverable loss.
Again, therefore, it may be sufficient to sue one professional party only, notwithstanding that another professional party may be responsible, either partly or more significantly, for the loss suffered. Where multiple professionals are sued, and liability is established against more than one of them, it is likely that any compensation payable will be apportioned between tortfeasors, so that each becomes severally liable for an individual percentage share.
Claims within this category arise where the activities and mistakes of the professionals concerned are independent of each other and give rise to losses which, in at least some respects, are different.
This was the case in Nationwide Building Society v Dunlop Haywards (DHL) Ltd and another (2009), where a building society claimed against valuers in deceit and against solicitors in negligence in relation to a loan of £11.5m it had made for the purchase of a commercial property, which itself had been overvalued. As against the surveyors, the court found that the claimant was entitled to recover around £21 million, representing (amongst other losses) the net amount of the advances, the lost interest on alternative advances, the cost of wasted staff and the loss of opportunity to reduce back-stop lending facilities. As against the solicitors, the claimant was entitled to recover (subject to defences of contributory negligence and contractual limitation) around £13 million, representing the net amount advanced and the lost interest on alternate advances, less the value of the property. This was due to the distinction between loss not reasonably foreseeable which was only recoverable because the valuers were fraudulent, and the foreseeable loss for which both defendants were liable.
In this category, and to establish liability, an injured party will again need to prove that each defendant has acted in breach of duty and has caused loss. Each professional against whom a claim is successfully made will then be severally liable for the loss it has caused and not in any way liable for the loss caused solely by others. Accordingly, and to recover all loss, it will be necessary to sue each professional party.
While the context in which the professional negligence occurs is a starting point in determining which defendant to sue, there are also a number practical and commercial considerations that should be taken into account. These are examined below.
The merits of the claims against multiple professional parties is a particularly relevant consideration in claims involving independent tortfeasors which cause the same damage. This is because 100% of the loss suffered may be recovered from just a single party. If the evidence against one professional appears to be much better than that against any of the others, it may not be necessary or desirable to proceed against those others.
Equally, however, if there is a substantial risk that one of the professional parties may be successful in escaping liability, perhaps by arguing that it reasonably relied on information and/or advice provided by another, or by arguing that the actions of the latter constituted a new and intervening act which absolves it of liability, it may well be desirable to sue multiple professionals in order to be more assured of success.
Allied to the legal merits of pursuing claims against multiple professionals are the cost implications, which are often highly significant.
While it is unusual for a professional defendant to recover costs against an unsuccessful claimant at the pre-action stage of litigation, once legal proceedings have been issued the general rule is that costs follow the event. Therefore, if the claim against one professional is discontinued, struck out or lost, there is a real risk that the claimant party will not only have to bear its own costs in relation to the failed claim, but also those costs reasonably incurred by the successful professional. Where the level of compensation recovered from the remaining defendant(s) is less than the aggregate amount of these costs, this will ultimately result in a net loss for the claimant.
In some cases, it is possible to obtain an order from the court requiring the losing defendant to pay the costs of both the claimant and the successful defendant. This is called a Sanderson Order. Alternatively, and less favourably, the court can order the claimant to pay the successful defendant’s costs, but allow those costs to then be recovered from the losing defendant(s) as part of the costs of the action. This is called a Bullock Order.
However, it should be noted that the court has a very wide discretion when determining the appropriate order as to costs, making the outcome inherently uncertain and all the more difficult to predict.
In addition to the issue of recovering costs is the preceding issue of funding costs. Where multiple parties are engaged in litigation the process invariably becomes more time consuming and, in turn, more costly. Where available funds are limited, it may well be preferable to sue one professional to the exclusion of others, to minimise the costs burden.
While the court will control the litigation timetable once proceedings have been issued, the involvement of multiple defendants is likely to have an adverse effect on the time it takes to resolve the claim. Where multiple parties are involved, it often takes longer to reach a consensus on procedural issues. Delays can also arise in the scheduling of meetings and court hearings, where the limited and competing availability of multiple representatives and expert witnesses has to be taken into account.
The actual or perceived financial standing of a defendant is a significant commercial consideration when deciding which professional to sue. While many professionals carry insurance to cover any damages or costs awarded against them, it is not in every case that such cover will be available and/or sufficient.
It is axiomatic that a judgment or award obtained against a defendant with no financial means is of limited practical value. Therefore, it may be prudent not to sue multiple defendants and to be more selective, where there is a real risk of impecuniosity on the part of certain professional defendants.
There can be tactical advantages and disadvantages in suing multiple defendants, both in the context of professional negligence claims and more widely. On the one hand the prospects of achieving a settlement might improve where the burden of paying compensation can be shared between multiple parties. However, this needs to be balanced against the risk that the intransigence of one defendant might become pervasive, making it all the more difficult to compromise the claim against the other(s), either at an early stage or at all.
As will be apparent from our examination above, deciding who to sue where mistakes have been made by multiple professionals can add additional layers of complexity to an already complicated professional negligence claim.
It should be noted that the issues addressed by this article are certainly not exhaustive and there may well be additional factors that will need to be taken into account. As is often the case in this area, there are few hard and fast rules and the best approach is likely to depend very much on the individual circumstances of the case. For these reasons, in addition to many others, it is often wise to be proactive after discovering grounds for a professional negligence claim, avoiding delay where ever possible.
Ultimately, and with so many imponderables, the decision as to which defendant to sue may require the exercise of an element of judgment, the correctness of which may not become clearly apparent until after the claim has run its course. However, this should not be mis-construed as a justification for guesswork or nonchalance, for the gravity of the decision of which defendant to sue warrants far greater attention than that.
As professional negligence solicitors we act for clients nationwide, to resolve claims against a wide range of professionals.
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