My solicitor advised me to settle too low: is that negligence?

Most disputes end in a settlement rather than a trial. Sometimes, months or years later, the client comes to believe the deal was far worse than it should have been, and that their solicitor's advice was the reason. This guide explains how the courts approach a negligence claim about settlement advice, using commercial and family-finance settlements as examples. It explains how the law works; it does not say whether any particular settlement was negligent or what a claim would recover. For the wider picture, see the overview of claims against your own solicitor.

The standard: errors of judgement are not usually negligence

A solicitor must use the care and skill of a reasonably competent solicitor. That does not mean getting every call right. In Arthur JS Hall & Co v Simons [2000] UKHL 38, Lord Steyn quoted Lord Diplock's words in Saif Ali v Sydney Mitchell & Co [1980] AC 198: the common law does not impose liability for what turn out to have been "errors of judgment, unless the error was such as no reasonably well-informed and competent member of that profession could have made". Lord Steyn added that "the courts can be trusted to differentiate between errors of judgment and true negligence."

Settlement advice is a classic judgement call. In Langsam v Beachcroft LLP [2012] EWCA Civ 1230, a businessman sued his solicitors, saying their advice on settling a claim against his former accountants had been too cautious. The Court of Appeal dismissed his appeal. Arden LJ recorded that advice on settlement "often involves weighing up many different matters some of which will be difficult to predict precisely and are matters on which opinions will differ". The court also noted a passage approved by the House of Lords in Moy v Pettman Smith [2005] 1 WLR 581, which warns against judging lawyers' settlement advice "with all the acuity of vision given by hindsight".

Two further points from Langsam:

• There is a range of reasonable views. The trial judge, whose findings the Court of Appeal upheld, said that the fact that other counsel "might be more bullish or positive does not begin to make this approach erroneous, let alone negligent."
• The client must be able to make an informed choice. What is needed is a sufficient explanation for the client to decide whether to accept the offer. How that is done can reflect how sophisticated the client is.

Where leading counsel (a senior barrister) gave the operative advice, the Court of Appeal held that the solicitor's duty was to consider whether that advice was "obviously or glaringly wrong".

Badly advised, or chose to settle?

Clients are entitled to make their own decisions, and the solicitor's duty does not take that away. A client who receives competent advice and decides to settle anyway, perhaps for speed, cost or peace of mind, has no claim against the solicitor for that choice. In Langsam, the Court of Appeal noted that the client had announced that he wanted to settle, and that from then on his lawyers were obliged to find the best way to carry out his instructions.

The position is different where the advice itself was missing. Lewis v Cunningtons Solicitors [2023] EWHC 822 (KB) was a High Court claim about a financial settlement on divorce. The wife had agreed terms directly with her husband, and the firm asked her to sign a disclaimer saying it could not advise on whether the deal was fair. The judge found the firm should have advised her to seek a pension sharing order, and that deploying the disclaimer before giving that advice was a breach of duty. As the judge put it, "the fact that Mrs Lewis could have ignored that advice does not mean it should not have been given." The judge also said a disclaimer would have been appropriate if she had gone ahead after receiving the advice.

Family-finance settlements and consent orders

A financial settlement on divorce is usually made into a court order, a "consent order", approved by a judge. That does not prevent a claim against the solicitor. Hall v Simons involved three appeals, two of them about matrimonial settlements. In one, Mr Barratt said his solicitors had negligently advised him to settle his former wife's claim to a share of the matrimonial home on disadvantageous terms. Lord Hoffmann said the judge's approval was given "on the basis of the information put before him" and on the basis that the parties, advised by solicitors, had agreed. A claim that better advice would have produced a better settlement did not "involve any attack upon the judicial process."

Commercial settlements

The same principles apply to a commercial dispute, a partnership break-up or a contract claim. The questions are what the solicitor knew or should have found out, what risks the case carried, whether the advice fell within the range a competent solicitor could give, and whether the client understood enough to choose. Langsam is a reminder that a claim alleging advice was "too cautious" faces a high bar where the risks were real.

Evidence that matters

Because the court looks at the advice as at the date it was given, contemporaneous documents carry most weight:

• the written advice, emails and letters sent before the settlement;
• the solicitor's attendance notes of meetings and calls (in Lewis, the judge noted there was "no note of the alleged advice");
• counsel's opinion, if a barrister was instructed;
• the information the solicitor had at the time, such as financial disclosure, expert reports and the other side's evidence;
• the offers made and the terms finally agreed.

Causation: what you would have done, and what others would have done

Proving poor advice is not enough. The client must also show it caused a loss. In Perry v Raleys Solicitors [2019] UKSC 5, the Supreme Court restated the dividing line drawn by the Court of Appeal in Allied Maples Group Ltd v Simmons & Simmons (1995):

• what the client would have done with competent advice must be proved on the balance of probabilities (more likely than not);
• where the better outcome depended on what others would have done, such as the other side agreeing better terms or a judge making a different order, the court assesses the loss of a chance.

In Hall v Simons, Lord Hoffmann observed that it is very difficult to prove that a case lost after a full hearing would have been won if conducted differently, but "it may be easier to prove that, with better advice, a more favourable settlement would have been achieved." How the court assesses a lost chance is explained in loss of a chance.

Barristers can be sued too

Until 2000, advocates had immunity from negligence claims over their conduct of court proceedings. In Hall v Simons, the House of Lords ended that immunity for advocates in civil proceedings and, by a majority, in criminal proceedings too. Lord Steyn said that "the basis of the immunity of barristers has gone. And exactly the same reasoning applies to solicitor advocates."

Time limits and the process

A claim against a solicitor follows the Professional Negligence Pre-Action Protocol and is subject to strict time limits, explained in time limits for solicitor negligence claims.

What a solicitor will want from you

• The settlement agreement or consent order, and the date it was signed or approved.
• Every letter, email and note of advice you received about settling, including any counsel's opinion.
• Any disclaimer or acknowledgement you were asked to sign.
• The offers made by each side, in order, with dates.
• The information available at the time: financial disclosure, expert reports, the other side's evidence.
• What you told the solicitor about your priorities, and what you would have done with different advice.
• The date you first realised the settlement might have been poorly advised.

Run the free case check

This guide is general information about the law of England and Wales. It is not legal advice. Whether settlement advice was negligent depends on what was known and said at the time, and strict time limits apply to any claim.