Johnson v Firth

The appeal concerned a claim for professional negligence brought by the appellant, Mr. Johnson, against the respondent, his former solicitor, Ms. Firth. Mr. Johnson alleged that Ms. Firth had negligently advised him to settle a motor accident insurance claim prematurely and for an undervalue. The appeal was heard by Gleeson, Payne, and Brereton JJA of the Court of Appeal of New South Wales.

The central legal issues before the court were whether Ms. Firth had breached her duty of care to Mr. Johnson by advising him to accept the settlement offer, and if so, whether that breach had caused Mr. Johnson to suffer loss. Specifically, the court had to determine if Ms. Firth's conduct in advising on the settlement fell below the standard of competent professional practice, and whether Mr. Johnson would have accepted the settlement offer even if he had received different advice, considering his financial circumstances and the risks associated with his claim. The court also considered the applicability of section 5O of the *Civil Liability Act 2002* (NSW) to Ms. Firth's conduct.

The Court of Appeal found that Ms. Firth had not breached her duty of care. The court noted that Ms. Firth had provided clear and repeated advice discouraging a premature settlement at an undervalue, despite Mr. Johnson's pressing financial difficulties and desire for a swift resolution. The court accepted that an early settlement could be prudent given the risk of future disclosure of information detrimental to the claim. Furthermore, the accepted offer was not so unreasonable as to warrant a warning against acceptance. Regarding causation, the court held that even if Ms. Firth had provided different advice, it was not established that Mr. Johnson would not have accepted the offer. The court considered the offer to be slightly above the mid-range of potential outcomes, Mr. Johnson's precarious financial position, his clear willingness to settle, and the risk of adverse disclosures.

The appeal was dismissed, and Mr. Johnson was ordered to pay the costs of the appeal.