Overview

The Court of Appeal has shifted the burden of proof where a client went to litigation on a solicitor’s advice, ruling that the normal inference is that a client whose solicitor advises him to fight rather than settle will generally rely upon that advice unless it is proven otherwise. In the recent case of Levicom International Holdings BV & Another v Linklaters (A Firm) [2010] EWCA Civ 494 Levicom appealed against a first instance decision that Linklaters' negligence was not causative of their loss.

Levicom sought advice from Linklaters regarding the strength of its case against NetCom concerning a dispute over a shareholders' agreement. Linklaters advised Levicom not to accept a settlement offer from NetCom and to arbitrate instead, stating they considered Levicom had a 'not less than 70 percent' chance of success. Levicom rejected the offer and proceeded to arbitration, but subsequently settled the claim on terms substantially less favourable than those originally offered by NetCom.

At first instance the judge awarded Levicom nominal damages of just £5 on the basis that Linklaters had been negligent in providing such positive advice, but that the negligence had not been causative of Levicom's loss, as Levicom was likely to have proceeded to arbitration in any event. The Court of Appeal disagreed and overturned that decision, stating: "When a solicitor gives advice that his client has a strong case to start litigation rather than settle, and the client does just that, the normal inference is that the advice is causative”.

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