Shaw v Leigh Day (a firm)

Factual and Procedural Background

The appeal arises from an order of District Judge Hovington dated 18 May 2015, which struck out the Claimant's personal claim for damages for professional negligence against the Defendant solicitors pursuant to CPR 3.4(2)(a) and/or CPR 24.2(a)(i). The Claimant is the personal representative of her late father's estate, who died following a relatively new surgical procedure (a trans-aortic valve implantation, or TAVI). Post-mortem reports revealed trauma to the aorta leading to fatal cardiac arrest.

The Claimant initially instructed the Defendant solicitors to advise and represent her at an inquest into her father's death. The inquest was later declared an Article 2 inquest due to the involvement of a clinical trial valve, investigating systemic failings as well as the circumstances of death. The inquest concluded that the death was an unintended outcome of the procedure, with no adverse findings against the hospital or the surgeon.

The Claimant pursued judicial review to challenge the inquest verdict but was unsuccessful. A clinical negligence claim was issued on behalf of the Estate against the hospital and surgeon but was stayed pending judicial review. The Claimant became dissatisfied with the Defendant solicitors, alleging failures in procuring evidence and handling the inquest and clinical negligence claims. The Defendant ceased acting in 2012, and new solicitors were instructed in 2014.

The professional negligence claim against the Defendant solicitors was issued in 2014 as a precautionary measure and included claims in contract and tort. The District Judge struck out the Claimant's personal claims but allowed her to amend the claim to join her in her capacity as personal representative of the Estate. The professional negligence claim was stayed pending the outcome of the clinical negligence proceedings, which eventually resulted in judgment against the hospital and surgeon, who accepted negligence but did not formally admit liability.

Following the clinical negligence judgment, damages were awarded to the Estate, and issues of costs related to the inquest and judicial review proceedings were addressed. The appeal concerns the District Judge's decision to strike out the professional negligence claim and focuses on whether the Claimant has a reasonable prospect of recovering damages in her own right.

Legal Issues Presented

1. Whether the Claimant's professional negligence claim against the Defendant solicitors discloses a reasonable cause of action and should be struck out under CPR 3.4(2)(a).
2. Whether damages for distress are recoverable in a contract for legal services related to representation at an inquest.
3. Whether the Claimant can recover damages for wasted expenditure (fees paid) where the solicitors' performance was negligent but not a total failure of consideration.
4. The appropriateness of awarding nominal damages and whether such a claim justifies proceeding to trial despite a potentially small damages award.
5. The proper application of the principles distinguishing strike out for no reasonable cause of action versus abuse of process, particularly in light of proportionality and access to justice concerns.

Arguments of the Parties

Appellant's Arguments

• The Claimant contended that the Defendant solicitors failed to procure sufficient evidence for the inquest and clinical negligence claim, causing loss including distress and wasted fees.
• She argued that damages for distress are recoverable because a major object of the contract was to obtain peace of mind and closure through a thorough factual investigation at the inquest.
• The Claimant maintained there was a realistic prospect of recovering damages beyond nominal damages, including for distress and wasted expenditure.
• She submitted that the strike out was premature and that the claim deserved to be heard given the complexity and importance of the issues.
• She sought to admit fresh evidence relating to developments in the clinical negligence proceedings that supported the claim.

Defendant's Arguments

• The Defendant denied any actionable wrongdoing and contended that the absence of expert evidence was fatal to the claim.
• They argued that damages for distress are not recoverable in contracts for legal services, drawing an analogy with insurance contracts where emotional upset does not justify damages.
• The Defendant submitted that recovery of wasted expenditure requires proof of failure to perform a discrete, specific service and that the settlement of fees undermined this head of claim.
• They contended that the claim was disproportionate given the likely small damages and substantial costs already incurred.
• The Defendant did not oppose the admission of fresh evidence but maintained the claim should be struck out for no reasonable cause of action.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Watts v Morrow [1991] 1 WLR 1421	Damages for distress recoverable where a major object of contract is to provide pleasure, relaxation, or peace of mind.	Used to establish the legal test for recoverability of distress damages in contracts for legal services related to inquests.
Farley v Skinner [2001] UKHL 49	Confirms the exceptional category of contracts where damages for distress are recoverable.	Applied to assess whether the contract with solicitors falls within this exceptional category.
Roach v Home Office [2010] QB 256	Costs incidental to claims and their treatment in costs proceedings.	Referenced regarding costs of the inquest being considered within costs proceedings.
Tony Sullivan (aka Rudey Solomon) v Bristol Film Studios Ltd [2012] EWCA Civ 570	Approach to striking out claims as abuse of process where damages are disproportionate to costs and judicial resources.	Distinguished by the court to clarify that small claims with real prospects should not be struck out merely for low damages.

Court's Reasoning and Analysis

The court began by assuming the Claimant could prove the pleaded breaches of contract by the Defendant solicitors, focusing on whether the Claimant could establish recoverable loss beyond nominal damages. The District Judge erred by conflating the absence of a guaranteed outcome at the inquest with the object of the contract, which was to provide a thorough factual investigation to offer peace of mind to the family.

The court clarified that damages for distress are potentially recoverable in contracts for legal services where peace of mind is a major object, particularly given the unique emotional context of an inquest. The Defendant's analogy with insurance contracts was rejected as oversimplified.

Regarding wasted expenditure, the court found that a total failure of consideration claim was untenable but accepted the arguable prospect of recovering damages measured by the difference in value between the services contracted for and those performed.

The court emphasized the importance of distinguishing between strike out for no reasonable cause of action and abuse of process, noting that proportionality is not a factor in the former. It found that the District Judge erred by denying the claim on the basis that only nominal damages were likely and by failing to consider the purpose of nominal damages claims in vindicating legal rights.

The court also considered the relevance of the Solomon case and found it distinguishable, reaffirming that small claims with a real prospect of success should not be denied access to justice merely due to their size.

In sum, the court held that the appeal should be allowed because the Claimant’s case was sufficiently arguable to proceed beyond strike out or summary judgment, and the matter should be managed further, including consideration of a stay pending the outcome of related costs proceedings.

Holding and Implications

The appeal is ALLOWED. The order striking out the Claimant's personal claim for damages for professional negligence is set aside.

The case is remitted to the District Judge for a case management hearing to determine appropriate directions for the progress of the action, including a possible stay pending the determination of costs proceedings in the related clinical negligence action. The decision does not establish new precedent but reinforces that claims for professional negligence involving damages for distress and wasted expenditure should not be struck out prematurely where there is a realistic prospect of success.