Although litigators are usually much better at making attendance notes than their corporate counterparts, it is less common to make attendance notes of successful settlement discussions. This can mean, however, that the solicitor is exposed to liability if the client changes their mind.

In Fraser v Bolt Burdon (2009), one case in a series relating to the settlement of litigation, the High Court considered whether solicitors had been right to advise their client to accept a settlement offer, at the door of the court, of £200,000 plus costs in relation to a claim said to be worth between £15,000 and £1.4 million.

The facts of the dispute stretch back 30 years. Miss Fraser made a medical negligence claim against the health authority which ran St Bartholomew's Hospital ("St Bart's") in relation to the withdrawal of prescriptions of various drugs, in 1982, alleging that the abrupt withdrawal of the drugs caused her serious psychological disturbances. 

In 1985, Miss Fraser retained Parlett Kent ("PK") in relation to her claim against St Bart's. However, due to PK's negligence in issuing the writ, St Bart's successfully defended the claim on limitation grounds.

Miss Fraser subsequently commenced proceedings against PK for their failure to commence proceedings against St Bart's in time, retaining Bolt Burdon ("BB"). In the context of the claim against St Bart's, Miss Fraser received advice from counsel that the likely value of the claim against St Bart's was around £15,000. Notwithstanding this, and the fact that loss of chance principles applied to her claim against PK, Miss Fraser claimed that her inability to pursue the claim had caused her losses of almost £400,000, later revised to more than £1.4 million, including damages for psychiatric injury caused by the loss of the claim against St Bart's. 

PK admitted liability but disputed causation and loss. Various settlement offers were made, but none was accepted until the morning of the first day of the trial when PK offered £200,000 plus costs. On the advice of BB and the barristers instructed, Miss Fraser accepted that offer. However, she later commenced proceedings against BB, who added the barristers as third parties, in which she claimed the settlement was lower than any reasonably competent solicitor could have advised accepting, also alleging that BB had put her under undue pressure to accept the offer.

HHJ Seymour QC set out in detail the standard of care to be expected of solicitors and barristers in these circumstances, by reference to familiar authorities such as Bolam v Friern Hospital Management Committee (1957) and Saif Ali v Sidney Mitchell & Co (1980). The judge concluded that, where advice has been given without skill and care "it is no answer that the advice to settle, or not, was a matter of judgment, or had to be given without an opportunity for calm reflection."

Having analysed the merits of Miss Fraser's claims against both St Bart's and PK, the judge concluded that he was completely satisfied that the advice given to Miss Fraser to accept the offer was extremely good advice. Miss Fraser's case on just about every issue in the PK action was attended by considerable difficulties. The judge's view was that Miss Fraser's prospects of establishing liability against St Bart's had been no better than 60 per cent and that it was probable that her evidence on the effects of the prescription withdrawal would have been rejected. He concluded that there was a good chance that the value of the St Bart's Action, if 100 per cent successful, would be assessed at around £15,000. The claims based on the alleged psychological consequences of the negligence of PK faced significant difficulties as a matter of law and as a matter of fact. 

This case is an extreme example of a situation commonly faced by litigators. It is not unusual for a client who appears content, or at least in full agreement, with the terms of a settlement to suffer "post-settlement remorse" and end up regretting the decision, sometimes much later. This can be a particular risk when the settlement takes place at the doors of the court: after a period of reflection with the pressure off, the client may see the position through different eyes.

What can be done to try to avoid these situations arising? Fraser v Bolt Burdon offers practical guidance in that respect because BB were able to produce very full attendance notes of their discussions with Miss Fraser in relation to their and counsel's advice as to why the settlement offer was a good one, and the reasons for their advice. There is almost always an element of judgment and experience involved in giving advice with regard to settlement but it will be far easier to satisfy a court that reasonable skill and care has been exercised in reaching that judgment where it can be shown that the relevant considerations have been articulated and recorded. 

Although litigators are generally much better at keeping attendance notes than their transactional counterparts, there is often a failure to make attendance notes following settlement. Most likely this is because there is a tendency on the part of the solicitor to think that the settlement agreement itself records what has happened, and secondly there is a natural desire to consider the case closed following settlement and to move on to the next thing. However, a clear file note should help to dispel any complaint that the client did not understand the advice or was put under pressure to settle when what they wanted was to stand and fight. It can be particularly important where an unusual term is included in the settlement, or the client's views of the litigation were unreasonable. Where counsel is involved, why not email a copy of the file note to them and ask them to confirm that it is an accurate record? If clear and comprehensive attendance notes are available, if the worst happens and a client should bring a claim, then this can assist to deal with the claim at an early stage in a summary judgment application (as demonstrated in another recent case Webb v MacDonald & Another (2010)). 

Where time permits, advice with regard to settlement should obviously be in writing and the client's express approval obtained. That luxury may not be available for a settlement at the court door. In those cases, an attendance note is essential, better still if it is followed up by a confirmatory letter. Claims such as that in Fraser very often follow after a significant delay when the case has been long forgotten. A letter on the file written immediately after the settlement confirming the advice given and the reasons for settling, if it has gone unchallenged at the time, will make it much harder for the client to change its mind later - and if it does, the credibility of the claim may be fatally undermined.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.