Example 1: compensation for financial loss - when the person complaining was in control of the action taken We find that Firm L failed to tell Ms J that her ex-husband had offered a 50/50 settlement in their divorce. She had been looking for an even split but her solicitor had advised her not to make the offer until hearing from her ex-husband’s solicitor. A change in solicitors within Firm L coincided with the offer from the other side and it got missed in the handover. There was no contact between Ms J and her ex-husband, so all contact was through lawyers. The negotiations broke up soon after and the case ended up in court, with a 45/55 settlement ultimately being agreed. It was only after the settlement that Ms J was informed by her ex-husband that she should have taken the even split. The difference of the 5% was £25,000. Scenario 1: We look at the evidence and there’s a record of an initial meeting with Ms J at the firm’s office, where Ms J said that she wanted to stay in the house they had owned together and didn’t want it to be sold. She described this as a “red line”, according to the firm’s notes. Although there’s no doubt that Firm L should have told Ms J about the offer, we know that the offer would have meant Ms J needing to sell the house, as she couldn’t afford to take on the mortgage on her own. It seems to us that she wouldn’t have accepted the offer on those terms, so the failing by the firm doesn’t seem to us to have caused her to lose the £25,000. This means we don’t direct that compensation. Scenario 2: We saw that there wasn’t any reason why Ms J wouldn’t have accepted the offer. The practical arrangements would have been workable, and the split was what she had told her lawyers she was after. The only reason, then, that she didn’t get a 50/50 split is because her lawyers failed to tell her the offer was on the table. On that basis, we would direct Firm L to pay her £25,000.
Example 2: compensation for financial loss - where a third party is involved Miss V has a claim against a builder who did some work on her house. Her solicitors, Firm W, miss an important deadline for submitting documents to court and, as a result, the case is struck out, so Miss V can’t recover anything and her claim for damages is lost. We decide there was a failing in the service, because the firm should have submitted the paperwork in time. Does Miss V get compensation? Scenario 1: The claim was struck out at an early stage and the firm hadn’t been able to get advice on the value of the claim, or on the prospects of success. We know that the firm thought that there was at least something in the case, because it was willing to take the case on, but it’s now much harder for us to come to a confident view on the value of the claim or the value of the loss. In that case, we might decide that we can’t come to a figure and, if we can’t come to a fair figure, we won’t direct compensation for the loss. Scenario 2: Miss V funded the claim through her home insurance. We know that insurers will generally only underwrite claims that have good prospects of success (usually above 50%), and there’s nothing to indicate this was a special case. Now, say Firm W got a barrister’s opinion on the case and the barrister’s opinion was that the claim was worth £40,000, and that the evidence available made the claim “strong”. We know barristers understand the practical risks of trials, and no claim is certain to win in court, when the evidence is tested and both sides are arguing their position. So, whilst there would be no guarantee of success, the description of the case being “strong” is important. We also don’t have anything in the evidence to suggest Firm W disagreed with that assessment and the contact between Firm W and Miss V seems to us to suggest Firm W believed this was a claim Miss V stood a good chance of winning. We wouldn’t say there was as high as a 100% chance of winning, because there was a risk of defeat in court. We also wouldn’t say that there was as low as a 50% chance of winning, because the expert advice from the barrister – with which Firm W seemed willing to agree – was that the claim was “strong”. Instead, we are likely to be somewhere in the middle, so around 75%. This might be adjusted, depending on what other evidence we can find, but let’s say 75% in our case. If Miss V had won, her claim was believed to be worth £40,000, and we now believe the chance of that happening was 75%. We’d then multiply that by value of the claim of £40,000, and that gives us £30,000, which is the financial loss we direct Firm W to pay.
Example 3: compensation for financial loss - where the failing happened after the expense was incurred Mr B instructed Firm C to help him buy a house. He paid £900 for some searches. Over the next few weeks, Mr B experiences problems getting hold of his conveyancer and the seller contacts him directly, complaining that her lawyer is struggling to get hold of them, too. Two months on, the seller pulls out of the transaction and Mr B’s searches on a property he can’t buy are a lost expense. He complains that this was down to Firm C’s poor communication. We decide that there was poor communication from the firm, in its contact with both Mr B and the seller’s lawyers, so should Mr B get his £900 back? Scenario 1: We saw evidence that the seller and Mr B were in dispute about an issue with the legal title, and that this hadn’t been resolved at the time the sale fell through. We saw that Firm C had written to Mr B a week beforehand and, in that letter, Firm C advised Mr B that he should be able to get an indemnity policy to cover any risks with this issue, but it would normally be the seller who paid for it. The seller wasn’t willing to pay for it, with her solicitors claiming there was no problem. In our view, whilst there was poor communication, it’s not clear to us that the sale fell through because of that poor communication; there was at least one other issue and it seems to us the two sides couldn’t agree on that. As such, because we aren’t confident that the firm’s actions caused the £900 to be a wasted expense, we don’t direct Firm C to pay compensation on this. Scenario 2: There aren’t any obvious points of dispute between the parties. Say also that there was an exchange of messages between Mr B and the seller, where the seller said she’s getting “fed up of the delays” and will pull out, if Mr B can’t get his lawyers to engage. Mr B tried to keep the peace, but he got a text message on the day the sale fell through, saying “I’ve had enough. This has gone on for too long. I’m sorry, but I’m going to tell the estate agent to put it back on the market.” There is a chance that the transaction might have fallen through, even if Firm C had done a good job with its communication, but the balance of the evidence tells us that it’s more likely than not that Mr B’s £900 expense was wasted because of the firm’s poor communication. We direct that Firm C pays Mr B £900 compensation.
Example 4: reduction or refund of fees - estimate complaints Ms Q instructed Firm R to help her with a dispute with her neighbour about the boundary their properties share. The firm gave her an estimate early on of £2,500+VAT (so £3,000 in total), but, when the work was completed and the dispute resolved, Ms Q received a bill for £7,500+VAT (which is £9,000). There’s no doubt that the firm failed to give an updated estimate on the costs, and the last price quoted was the first one given. We consider that to be a failing in the service. A reduction of the fees seems natural, to reflect the failure to give updated information about the cost of the work. Scenario 1: We look at the evidence and the initial letter that had the estimate in it includes an explanation of what work Firm R expected to have to do to get the job done. The firm said it would be about ten hours’ worth of work, at £250 per hour. The section of the letter on costs finished “If your neighbour rejects our offer and provides his own evidence, we will need to revise our estimate, because that is going to take more work. We’ll cross that bridge, if we come to it.” There was regular contact between Ms Q and Firm R, and we know that the neighbour did reject the offer and did provide his own evidence, and the firm met with Ms Q and discussed that new evidence in a two-hour meeting. Our reading of this situation is it should have been clear to Ms Q that the initial estimate was now out of date and the costs were going to be higher. We have to come to our view of what is fair. The firm had plenty of chances to give Ms Q a new figure, but we don’t believe it’s fair to drag the costs all the way back to the estimate, when no one should really have believed that still to be the price. Instead, we reduce the costs to £5,000+VAT (£6,000), which is a 50% reduction of the amount the firm exceeded its estimate by, reflecting an even share of the excess. We think this finds a fair balance, because Firm R charged more than it told Ms Q to expect, but Ms Q should have understood that she was going to pay more than the initial price. Scenario 2: Firm R didn’t give her any direction on what work was included in the initial estimate. Ms Q doesn’t appear to have much experience in dealing with lawyers, so there’s no fair reason for her to have any advanced knowledge of charging rates and the speed at which costs can escalate. The evidence records her having regular contact with her lawyers and the discussion was consistently about the legal dispute. It appears to us that costs were very much not in the front of her mind, because her focus was on getting a just outcome. In this case, we decide that Ms Q had no reason to believe the initial price was no longer realistic. There’s no doubt that Firm R did a lot of good work, with a genuine desire to represent Ms Q’s best interests, leading to the result she wanted in her case. But the price she paid for that was far more than she was told to expect and her lawyers never took any of the multiple opportunities they had to correct that. We decide to drag the costs right back to the estimate, which means Firm R has to send Miss Q an amended bill of £3,000.
Example 5: reduction or refund of fees - reductions by a certain percentage Dr T instructed solicitors to help him with a claim against his uncle’s estate. He’d been left a small amount of money in the will, but Dr T believed his uncle had always intended for him to stay living in the house they shared, and for him to receive a greater share of the estate assets. The solicitors instructed Mr U, a barrister, to advise on what Dr T could be entitled to. Mr U’s advice turned out to be flawed, meaning that Dr T agreed to a lower settlement than he should have done. Aside from the financial loss, should there be a reduction in Mr U’s fees? It will come down to the effect of the bad advice. Scenario 1: The advice was that Dr T had no claim at all and he should accept any offer made to him, but the evidence he could produce actually meant he had a good case to claim a significant amount. So, we’re in a situation where the advice Dr T received had no real value to him. He got less than he might have and what he did get was no better than he would have achieved by asking either on his own or with the help of his solicitors. In that case, we’re likely to decide the barrister’s fees should be waived and Dr T shouldn’t have to pay for that service. Scenario 2: The advice was that he had some rights, and that Dr T could be entitled to some of what he wanted. However, the barrister missed one of the things off his advice, and it meant that, instead of getting everything he was entitled to, Dr T only got most of it. Dr T had believed he was getting everything, but found out later that the barrister had missed something off the list. We look at the significance of the missing point. There could be a financial loss (probably in the second category of financial losses above, because any result would depend on the other side in the legal case, or on a court), but let’s look at this purely from a bill reduction perspective, here. If the missing point isn’t the most important but it probably has made a noticeable difference to the overall settlement, we’d likely look at a reduction in the middle category and where it sat in the 20-33% bracket would depend on whether we were also giving compensation for a financial loss on the same point. Alternatively, if the missing point is really small, such that we didn’t think it would make much difference to the overall settlement, there’s a good case for it being a reduction in the lowest category (up to 15%). If it’s so small that we believe it didn’t make any difference at all, we might decide no bill reduction is appropriate at all. At the other end of the spectrum, what if it is a major point and it makes a huge difference to the strength of the claim Dr T is making? In that case, a substantial reduction might well be fair. Dr T has turned to Mr U to give him specialist advice, as an expert, and the failure to tell him something as important as this fatally undermines the value of the work. Why should Dr T pay Mr U for a job that had such a crucial mistake in it?
Example 6: compensation for emotional effects - calculating a remedy Mrs M contacted Firm N and asked for her file. She had decided to try to find a new lawyer and Firm N had agreed to send her the file, so she could do so. Firm N took a month to send her the file and Mrs M complained to us about the delay. We agree that this was too long. She now has the file, so that isn’t a problem any longer. All that remains is whether she should get compensation for the impact of the delay on her. Scenario 1: Mrs M was out of the country when she contacted the firm and wasn’t due back into the country for six weeks. The file arrived before she got home and there was no real difference to her in practice. Yes, there was a failing, but the detriment was very minor. If Mrs M had to chase the firm a few times to get the file, it might warrant a small award for the hassle and frustration, but compensation will probably be in the Modest category. Scenario 2: Mrs M was awaiting a court hearing and had six weeks to prepare for it, when she contacted the firm. The delay put a real strain on her ability to find new lawyers who were willing to represent her. The new lawyers she found were able to source some documents by contacting the other side and the court, but the delay was a genuine stressor for Mrs M, at an already stressful time. She had chased Firm N regularly for her file and been given assurances that it would be sorted that day, with the file only appearing much later. This could be a case in our Serious category, with Mrs M being exposed to an intense period of genuine worry. If Firm N realised its error and took steps to limit the damage (perhaps when the Senior Partner found out what had happened), the good complaint-handling might mean that the effect was less severe. If so, an award in our Significant category is more likely.
