The House of Lords is currently considering whether to abolish the common law immunity that prevents lawyers being sued for negligence when acting as advocates in court.

The case is Arthur JS Hall v MK Simons. It involved 3 actions against solicitors. One arose from a door of court settlement in a building claim and the other two from divorce proceedings.

The common theme throughout was that all the claimants felt that their solicitors had failed to investigate a particular aspect of their case – and that their settlement should have been "better".

The solicitors' defence was that they are "immune from suit" based upon the long established authority of Rondel v Worsley (1969) and developed most recently in the Court of Appeal in Kelly v Corston (1997) - both of which concerned a barrister.

One very interesting and important issue will be the way the Lords deal with the issue of Human Rights.

The cases had been dealt with at first instance by "preliminary issue" or "strike out" application. The claimants argued that the court had an obligation to investigate the underlying facts. Relying on Osman v UK (1999) the claimants said that the court had to hear the test evidence. A summary disposal of claims would be a breach of their right to a fait trial under Article 6 of The Human Rights Act.

In the claimants are right there will be general difficulties in attempting to strike out unworthy actions.

This reluctance will – in lots of cases - mean that hopeless cases are pursued without early intervention by the court to the detriment of lawyers who face these actions and their insurers.

Therefore, for a variety of reasons the judgment in Hall will be of great interest. It is hoped that the claims lead to a clear and workable set of principles.

Dimond v Lovell - the real implications

It has been widely reported that the Appeal was unanimously dismissed by the House of Lords.

The hire agreement executed by Mrs Dimond was a regulated agreement under the Consumer Credit Act 1974.

Three of the five Law Lords recommended damages for hire be based on local spot rates rather than credit rates.

How should you deal with claims?

  • Check whether the credit hire agreement is enforceable.
  • If the agreement is enforceable remember the claimants may only recover the appropriate spot rate.
  • Maximise the saving by collating evidence on prevailing spot rates.
  • Emphasise that the rate must be appropriate – that means monthly, weekly or daily rates according to the length of hire.
  • Allow for the possibility that you may have to pay interest on the relevant spot rate as the charge for interest which is built into credit hire rates has been disallowed.

    How can you cut the cost further?

  • Keep an eye on spot hire rates - new providers entering the market and competition with on line services may lead to further rate cuts.
  • Spot rate hirers still make a profit. Consider block agreements at preferential rates for provision of courtesy cars.
  • Reduce the length of hire by minimising repair time – ensure approved repairers estimates of length of repair are accurate and reasonable and that repairs are carried out within the time specified.


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