Has a claim been undersettled?

13 February, 2015
by: Cripps Pemberton Greenish

Disappointed litigants who believe that their claim has been settled at an undervalue will often want to consider whether the advice they received which led to that settlement was negligent, and therefore whether there is a claim against their legal advisors.

The main issue in such claims is often whether it can be said to have been negligence on the part of the solicitor or barrister, as opposed to the numerous other factors during the litigation itself, which led to the settlement at an alleged undervalue.  Indeed, given the costs and litigation risk factors which may have informed the advice, it may not have been negligent to reach a settlement at a particular figure, even if there is a possibility of a much better result.

In this context, it is interesting that some organisations are specifically targeting personal injury claimants who have reached settlements, with the prospect of increased recovery from their former solicitors by pursuing a negligence claim on a no win no fee basis.  The practice, which is often termed ‘cannibalism’, was highlighted in an article in the Law Society Gazette last year:

https://www.lawgazette.co.uk/analysis/comment-and-opinion/why-cannibalism-is-coming-to-pi/5041182.fullarticle

It remains to be seen how much of an increase of this type of claim we will see, but the low fixed costs which apply to many personal injury claims have inevitably made the risk of claims being settled at an undervalue much higher. 

It also highlights the importance of obtaining good-quality representation in any litigation: it is surely preferable to get the right outcome in the first instance than to seek to rely on a potential negligence claim to top up the damages.