In a recent High Court decision, a law firm has been cleared of negligence while advising on the settlement of claims worth £2 million, initiated by a businessman’s bankruptcy trustee against his family members.
The case involved John Blower, a successful businessman who was declared bankrupt in 2014. His trustee in bankruptcy pursued claims against his wife and daughter, alleging transactions at less than market value. The court deliberated on whether advice by North London firm GH Canfields to settle these claims was negligent.
His Honour Judge Paul Matthews, presiding as a High Court judge, determined that even if the advice was indeed subpar, the claimant, Sandra Blower, did not provide a solid argument for causation of loss. Representing herself and her daughter Kelly, Sandra Blower’s complaint failed to demonstrate how the alleged negligent advice caused her or her daughter’s financial loss.
During mediation, John Blower, supported by solicitor Robert Whitehouse, represented the family’s interests. Judge Matthews highlighted that Mr Blower was entrusted by his family to negotiate favourable terms, which he did successfully. There was a clear understanding within the family that Mr Blower would act in their best interests, and no restrictions were placed on his negotiating powers.
Judge Matthews noted Mr Blower’s extensive experience in dealing with large financial transactions. The family faced claims exceeding £2 million, along with a potential £750,000 in legal costs. The mediation process saw numerous offers exchanged before reaching a conclusion where the trustee agreed to relinquish any claims on the family’s Spanish assets and allowed for Mr Blower’s immediate discharge from bankruptcy, resulting in a £1.5 million settlement payable within nine months.
The advice provided by Mr Whitehouse came under scrutiny; however, the judge ruled his actions were justified. Mr Whitehouse had asked for any non-negotiable conditions from his clients, who provided none and relied on Mr Blower’s judgment. As such, Mr Whitehouse acted reasonably in following Mr Blower’s instructions and in consultation with barrister Jonathan Crystal who did not object to the settlement terms and saw them as beneficial in avoiding further legal expenses.
Concluding, Judge Matthews explained that even considering a shift in evidential burden—requiring the law firm to disprove the claim—the evidence did not support that Sandra or Kelly Blower would have resisted the negotiated settlement. Thus, there was no viable claim of causation leading to a loss.
The High Court’s ruling emphasises the significance of clear communication and trust within family negotiations, as well as reliance on professional legal advice. The decision underscores the burden on claimants to demonstrate a direct causative link to financial loss in negligence claims against legal advisers.
