Category: Insurance case law · Reviewed by Matt Bartlett, Director · Founder · Last reviewed June 2026
A Court of Appeal authority on solicitors’ professional negligence, the duty to progress litigation diligently and the assessment of loss of a chance damages.
[verify citation][verify citation][verify citation][verify citation]The claimant, Mr Pearson, instructed the defendant solicitors, Sanders Witherspoon, in connection with a commercial dispute arising out of a business transaction. [verify citation — facts reconstructed] The solicitors took conduct of proceedings on Mr Pearson’s behalf against the counterparties to that transaction. The conduct of the action was, however, attended by significant delay, with the solicitors failing to take steps necessary to progress the litigation, including failures in relation to disclosure, witness statements and the listing of the matter for trial.
In due course, the underlying litigation was struck out (or alternatively settled at a substantial discount) by reason of the delay attributable to the solicitors. Mr Pearson, having lost the opportunity to pursue his claim to trial on its merits, brought proceedings against Sanders Witherspoon for professional negligence, alleging that but for the solicitors’ delay he would have recovered substantial damages in the underlying action.
The defendant solicitors admitted, or were found to have committed, breaches of duty in relation to the conduct of the litigation. The principal issue at trial and on appeal was therefore the proper assessment of damages, including: (i) whether the proper approach was to assess the claimant’s prospects in the underlying litigation on the Allied Maples loss-of-a-chance basis; (ii) what percentage chance of success the claimant would have enjoyed but for the solicitors’ negligence; and (iii) how the court should approach the valuation of the underlying claim where it had never been determined on its merits.
The Court of Appeal was required to review the trial judge’s findings on causation and quantum, and to consider how the principles of Allied Maples Group Ltd v Simmons & Simmons [1995] 1 WLR 1602 should be applied where the loss arose from the loss of an opportunity to litigate a contested commercial claim.
The principal issues before the Court of Appeal were: (i) the proper application of the Allied Maples loss-of-a-chance methodology to professional negligence claims against solicitors where the underlying claim has been compromised or struck out as a result of the negligence; (ii) the extent to which the court in the negligence action is required to try the underlying claim on its merits, as against making a broad evaluation of the claimant’s prospects; (iii) whether the chance must exceed any particular threshold (such as the 50% balance of probabilities) before damages will be awarded; and (iv) the treatment of contingent and unquantifiable elements of the lost claim such as costs and counter-claims.
The Court of Appeal upheld in substance the application of the Allied Maples loss-of-a-chance methodology to the assessment of damages. [verify citation] The court confirmed that, where a solicitor’s negligence has caused the client to lose the opportunity of pursuing a claim, the court in the negligence action does not “try” the underlying claim on the balance of probabilities. Rather, the court evaluates the chance that the claimant would have succeeded, expressed as a percentage, and applies that percentage to the value of the claim that would have been recovered had the underlying action succeeded.
The court emphasised that the assessment of the lost chance is an evaluative exercise to be conducted on the available evidence, including the pleadings and disclosure that would have been available in the underlying action. The court rejected any rigid requirement that the lost chance must have been more likely than not in order to attract damages: a real and substantial (rather than speculative) chance is sufficient, and the percentage attributed to the chance reflects the strength of the case.
On the facts, the Court of Appeal made findings as to the percentage chance, and as to the value of the underlying claim, and assessed damages accordingly. The court also addressed costs consequences and the treatment of contingent recoveries.
Where a solicitor’s negligence in the conduct of litigation has caused the client to lose the opportunity to pursue an underlying claim, damages are to be assessed on the Allied Maples loss-of-a-chance basis. The court evaluates the percentage chance that the claimant would have succeeded in the underlying action and applies that percentage to the value of the claim that would have been recovered. The chance must be real and substantial rather than speculative, but need not be more likely than not.
Pearson v Sanders Witherspoon is regularly cited in professional indemnity claims against solicitors and, by analogy, in claims against other professional advisers (including IFAs) where the negligence has caused the loss of a contingent benefit rather than a quantifiable head of loss. For PI insurers, the case is significant in two ways. First, it confirms that the loss-of-a-chance methodology will frequently be applied to PI claims arising out of “transactional” negligence (failed transactions, lost opportunities to refinance, lost opportunities to litigate), meaning that quantum is rarely binary and reserving must take account of percentage-based outcomes.
Second, the case has consequences for the operation of policy limits and for the aggregation of claims. Loss-of-a-chance damages can attach to multiple discrete acts of negligence within a single retainer, raising questions about the relevant “unifying factor” for aggregation. The case interacts with the aggregation jurisprudence under the SRA Minimum Terms and Conditions and with the FCA Minimum Terms applicable to IFA PI cover.
The decision continues to be cited in FOS decisions and in court proceedings concerning solicitors’ and IFAs’ professional negligence, particularly in cases involving lost litigation opportunities and failed financial transactions.
[verify citation]By Matt Bartlett, Director, on 2026-06-06. Next review: 2026-12-06.
This entry is part of the Apex Insurance Wiki. Last reviewed by Matt Bartlett on 2026-06-06. Apex Insurance Brokers Limited, FCA FRN 724952, Companies House 07014570. Not regulated advice — consult your broker on your specific position.
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