Lawyers' Liability Briefing - Cause and Effect

Causation defences are often an important defence in claims against solicitors. In our experience, the consequences of the error may be conveniently overlooked by claimants in the rush to claim compensation. However, the Court of Appeal recently made some surprising findings in this area.

Defendants have the opportunity to knock claims out where any mistake was not causative of the loss alleged to have been sustained. However, the recent Court of Appeal case of Levicom v Linklaters (2010) suggests that causation defences, at least in certain circumstances, may be more difficult to establish in the future. 

Facts

The claimants were a large corporate group. They instructed the defendant City law firm in connection with a dispute relating to a shareholder's agreement, which revolved around the construction of a particular clause in the agreement. Having rejected a number of settlement offers, the claimants proceeded to arbitration, eventually settling after the