Compensation for bad legal advice varies according to the loss or damage that a client has suffered as a result.
For highflying sports entrepreneur Timothy Wright, the consequences of bad legal advice were significant. A slip-up by his solicitors – London firm Lewis Silkin – cost him the chance of recovering over £10 million from his former employer.
His six-year battle for compensation for professional negligence climaxed recently at a six-day trial at the High Court in London, when he was awarded over £2 million in damages.
The judgement in Wright v Lewis Silkin LLP [2015] EWHC 1897 (QB) (03 July 2015) tells a story of riches, glamour and drama more likely to be found in a best-selling novel than a legal case report.
Mr Wright had an enviable and successful career in the glamorous world of sports management. In 2008 the governing body of Indian cricket set up the Indian Premier League, which in a few short years has grown to be worth an estimated US$3 billion.
Wealthy figures behind one of the eight IPL teams decided they wanted Mr Wright to head up a project to develop the club commercially on a massive scale. They offered him a starting salary of £300,000, quickly rising to £500,000 a year, and shares which they said could be worth US$140 million within four years.
Shortly before Mr Wright was due to sign the paperwork, a terrorist bomb exploded in Jaipur, India, killing many and resulting in parts of India being put on red alert, and causing Mr Wright to decide to turn down the offer.
To persuade him to change his mind, he was offered a signing on fee of £250,000 and a guaranteed £10 million severance payment if his employment was later terminated. Not surprisingly, the improved package was too tempting for Mr Wright to refuse.
His solicitors weren’t given much time to draft the employment contract – just three hours. They failed to advise him to include a clause that is commonly found in international contracts – a jurisdiction clause, which specifies the country in which legal proceedings should be brought should there be a dispute.
Only three months after he started work in India, Lehman Bros collapsed and the worldwide financial crisis ensued. This ruined the plans to develop the club, whose owners effectively terminated his employment when they instructed him to return to England and failed to honour the obligations to transfer shares and pay benefits. Importantly, they didn’t pay him the promised £10 million severance package.
When Mr Wright sued his former employer in the English courts, arguments about jurisdiction – whether the claim should be heard in India, not England – caused delay, so that it took three years to get judgement against them in England, which was for over £10 million.
By that time, his former employer was insolvent, with the result that he recovered nothing from them, having spent over £1 million in legal fees.
In the negligence claim against Lewis Silkin, Mr Wright argued and the court agreed that had his employment contract contained an English jurisdiction clause, he could have obtained judgement a year sooner, in 2011.
That was significant because his former employer was not insolvent in 2011 and there was a real chance, albeit low one, that the club would have been forced by the Indian cricket governing body to settle his claim. Mr Wright was awarded over £2 million in compensation for this lost chance.
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