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A closer look at the Court of Appeal judgment in Julia Patricia Holt v Holley & Steer Solicitors [2020].

Deborah Sullivan considers the recent Court of Appeal judgment in Julia Patricia Holt v Holley & Steer Solicitors [2020] EWCA Civ 851, in which the tortious claim against Ms Holt’s former solicitors was held to accrue when it was no longer possible to fix their mistake.  

Ms Holt appealed against the dismissal of her claims against her former solicitors for breach of contract and professional negligence.

The solicitors had acted for Ms Holt in connection with financial remedies proceedings initiated by her former husband upon their divorce. The final hearing concluded on 16 March 2012 but it was not until 30 May 2012 that judgment was handed down and the resulting order was made.

Ms Holt was dissatisfied with the award that she received and then pointed her guns towards the solicitors. In April 2018, she issued a claim form. She alleged that the solicitors had negligently failed to obtain expert valuations of certain of her assets, being rental properties and jewellery. As a result, the court had based its analysis of her financial position on inflated valuations of those assets and awarded her less than it would otherwise have done.

The solicitors applied for summary judgment on the basis that the claims in both tort and contract were time barred by reason of the Limitation Act 1980 s.2 and s.5. At first instance, it was held that only the contract claim was time barred. On appeal, a county court judge held that Ms Holt’s claim in tort was also time barred because her cause of action had accrued on the last day of the final hearing, which was more than six years before her claim was issued.

The issue before the Court of Appeal was whether Ms Holt’s tortious cause of action accrued on the last day of the financial remedies hearing, meaning that her negligence claim was time barred, or whether it accrued when judgment was handed down and the order was made, in which case her claim would be in time.

It was common ground between the parties that a claim in tort cannot be brought after six years from the date upon which the cause of action accrued. Further, in tort, the cause of action accrues when damage is sustained. The real battleground was the date upon which the damage occurred.

The leading judgment, given by Lord Justice McCombe, is a useful summary of the law relating to the accrual of tortious causes of action against solicitors and, in particular, the Law Society v Sephton & Others [2006] 2 AC 543 line of authorities relating to contingent loss. He made the following key points:

  • The core question for the Court of Appeal to identify was “…the point at which Ms Holt was “financially worse off”/had suffered “measurable” damage.”
  • Ms Holt’s was not a true case of contingent loss.
  • Whilst a claim to a division of assets upon divorce is not a chose in action, of the same assignable character as a claim in tort, it is a valuable right sounding in money. Ergo, “Divorce litigation in the present context is no different from other litigation. A client’s rights can be sensibly evaluated, and can be damaged by negligence at almost any stage of the proceedings; their lack of assignability, to my mind, is by the way.”

The Court of Appeal concluded that Ms Holt’s loss was sufficiently measurable, if not precisely quantifiable, when she lost the ability to adduce the expert valuation evidence which, she claimed, her solicitors should have obtained. As to the precise timing of that, Lord Justice McCombe said:

“That date may, in reality, have been shortly after the FDR. It may have been when the Firm (as is to be inferred) recognised, in January 2012, that any application to the Family Court to adduce more valuation evidence would have been bound to fail. In the present case, it could hardly have been later than the end of the hearing on 16 March 2012.”

Ms Holt’s claim in tort was, therefore, time barred.

The Holt case is a useful reminder that, when looking at limitation in tortious claims against solicitors, the devil is in the detail. Whilst at first blush, a claim may appear to have been brought in time, detailed consideration of the precise factual matrix can sometimes unearth a useful limitation defence.

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