The judgment in Jenkins v JCP Solicitors Ltd [2019] EWHC 852 (QB) (4 April 2019) illustrates the importance of identifying and suing the correct defendant before limitation expires. The firm had incorporated since allegedly negligent advice was given, and the claimant had mistakenly used its earlier name in the claim form. The case reveals at least 4 ‘professional negligence lessons’ which we set out below.
Alleged Negligence causing a £2.25m loss
In this case, Huw Jenkins, the former chairman of Swansea City Football Club, alleged that his solicitors (John Collins & Partners LLP, who traded as JCP Solicitors) wrongly advised him in April 2011 against commencing matrimonial finance proceedings at the most appropriate time when he was less pecunious.
He claimed that this alleged negligence had cost him £2.25 million (being the difference between what he would have been ordered to pay his ex-wife in 2011, and the amount he paid in 2017) as his financial status, had, by then, improved significantly.
Claim Form issued against the wrong person
Jenkins erred in his professional negligence claim form as he brought a claim against the wrong legal entity; he inadvertently sued the LLP’s successor law practice, a Company set up in 2014 and not the LLP who gave him the alleged negligent advice. He also entered into standstill agreements with the wrong entity, namely JCP Solicitors Ltd.
Mr Jenkins was legally represented at the time by IPS Law, a sports law firm (that may well find itself facing professional negligence or costs claim(s) from Mr Jenkins in future). This highlights the importance of using a specialist litigation firm when considering legal action as opposed to your usual firm of solicitors (who are unlikely to specialise in litigation).
High Court Decision
In September 2018, District Judge Osborne dismissed a substitution application and struck out the claim. He did so because he judged that Jenkins knew, or should have known, the company was not incorporated until 2014.
On appeal however, Mrs Justice O’Farrell said it was not incumbent on a party to litigation to point out errors in the claim advanced by the opponent.
However she ruled that the claimant had caused no prejudice by failing to name the correct defendant, and a fair trial was could still happen. The judge allowed the substitution of the LLP as a defendant for advice from October 2011 but advice given in April 2011 was statute-barred under the Limitation Act 1980 (because the LLP had an arguable case that any claim arising out of the advice was arguably statute-barred, and amendment could deprive it of that defence). This was arguably statute-barred as a “flawed transaction” case (per Chandra v Brooke North [2013] EWCA Civ 1559). Unfortunately, Jenkins had entered into a standstill agreement with the Company, but not the LLP.
4 Professional Negligence Lessons
This case offers a number of lessons for professional negligence matters:
- Firstly, the importance of identifying and bringing a legal claim against the correct defendant(s). This is especially the case in professional negligence cases involving successor or successive entities as happened here but in any case, it is always better to have identified and pursued action against all possible entities to the claim.
- Secondly, not waiting until the edge of the limitation period to commence legal proceedings because expiry of the limitation period is fatal to an otherwise valid legal claim.
- Thirdly, not using standstill agreements. Jenkins entered into a standstill agreement but it wrongly only covered claims against the Company, not claims against the LLP. Our firm’s general view is that standstill agreements evince an intention not to issue legal proceedings and create unnecessary risks (as eventuated in this case when the standstill was not agreed against a potential defendant). Standstill agreements send a message to the opponent that litigation may never happen and therefore reduce and weaken the prospects of obtaining a settlement at the optimal financial level.
- Fourthly, a party cannot expect their opponent to warn them of their own litigation mistakes. The judge observed, as ratified in the recent Court of Appeal case of Woodward & Anor v Phoenix Healthcare Distribution Ltd [2019] EWCA Civ 985 (in which this law firm acted) that it was not the defendant solicitors’ responsibility to inform Jenkins and his solicitors of the mistake made when issuing proceedings (para 39). The judge noted that they had done nothing to mislead as to their identity or acted in bad faith. It is always of import to watch the limitation clock and ensure that proceedings are brought against the correct parties and specialist litigation advice is taken from a leading litigation law firm at the outset.
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