Corporation Leasing v Irwin Mitchell: High Court Dismisses Professional Negligence Claim

What did the High Court decide?

In Corporation Leasing & Finance Limited v Irwin Mitchell LLP [2026] EWHC 2785 (KB), Mr Justice Mansfield dismissed CLF’s claim against Irwin Mitchell LLP (IM). The approved judgment was handed down on 30 October 2026.

CLF alleged that IM had acted negligently while advising on an existing claim to enforce security over a property and a separate professional negligence claim against CLF’s former solicitors, referred to in the judgment as RPL. The allegations included failures in pleading, advice about the strength of the underlying debt evidence, advice on settlement and the omission of an interest provision from an earlier settlement agreement.

The judge concluded that IM’s advice was not negligent. Counsel had been properly instructed and had given advice that was reasonable and not glaringly wrong. IM was therefore entitled to rely on that advice. The court also found no realistic prospect that CLF would have achieved a better settlement or a better result at trial.

How did the dispute arise?

CLF had provided invoice-discounting finance to a business associated with Stephen Raby. In 2012, Mr Raby and Jane McCann entered into a guarantee and legal charge in favour of CLF, with security over Lammas Lodge, a property they jointly owned in Esher, Surrey. After the business failed and the debt was not repaid, CLF began an order for sale claim against them.

RPL had originally acted for CLF but came off the record shortly before the scheduled trial in 2016. CLF then instructed IM. The order for sale claim was settled in principle in October 2016 and formally documented in May 2017. CLF later brought a professional negligence claim against RPL, alleging failures connected with the safeguards for a transaction involving potential undue influence and the advice given about settlement opportunities.

That claim against RPL was settled in May 2019. CLF subsequently alleged that IM’s handling of the litigation had caused it to accept an undervalued settlement or lose the opportunity to obtain a better outcome at trial.

1. 2 February 2012 CLF, Avanex and Mr Raby entered into a facility agreement, alongside a guarantee and legal charge involving Mr Raby and Ms McCann.
2. August 2014 CLF commenced the order for sale claim to enforce the security over Lammas Lodge.
3. September 2016 CLF instructed Irwin Mitchell after RPL came off the record.
4. 21 October 2016 Terms were reached in principle to settle the order for sale claim, including payment of £270,000 to CLF.
5. 19 May 2017 The order for sale settlement agreement was signed.
6. 22 May 2019 CLF’s professional negligence claim against RPL and RPL’s fees claim were compromised.
7. 30 October 2026 The High Court dismissed CLF’s claim against Irwin Mitchell.

Why was proof of the debt central?

A central difficulty was whether CLF could establish the amount it said was owed. The sum demanded in 2012 was £881,261.38. The court examined the ledgers, bank statements and discounting reports relied on to support that figure and found significant shortcomings in the material.

The principal ledger was not produced until May 2019, around seven years after the debt had originally been claimed. The earlier running-account ledgers did not identify the parties to individual payments, and there was no satisfactory explanation of when or by whom the records had been produced, how they had been compiled, or which systems they came from.

The bank statements also raised concerns. They did not identify the bank, account holder or account number; their provenance was inadequately explained; and two copies contained different redactions. The available discounting reports did not cover the whole period in dispute. The judge considered that a competent lawyer would have been concerned about how those documents might appear at trial.

CLF also relied on a certification clause in the 2012 guarantee and charge, which it argued made a certificate of the amount due conclusive evidence of the debt. The judge considered the wider context, including the allegations made in the underlying proceedings and the fact that the clause and any certificate had not been pleaded in the order for sale claim. The existence of the clause did not make the evidential risks disappear.

The court also rejected reliance on a supposed “vouching” exercise. It found that the exercise had not in fact taken place, and that CLF had not given IM clear evidence during the retainer that it had been completed or that it had produced results on which the solicitors could rely.

What did the court say about settlement advice?

CLF argued that IM had underestimated the prospects of its professional negligence claim against RPL. It said that the certification clause and the documentary evidence should have led to a more positive assessment, and that a separate claim concerning an alleged additional liability provision should have been pleaded.

Mr Justice Mansfield found that IM and counsel had reasonably identified serious problems with proving the underlying debt. Those problems affected the value and prospects of the claims against RPL. The court also rejected the argument that the later Etridge-related claim could be treated as a strong, independent route to recovery regardless of the debt evidence.

On the proposed additional liability provision, the judge found that the evidence did not establish a proper basis for concluding that the provision had been instructed in the way CLF alleged or that the proposed claim had realistic merit. In any event, the claim would have depended on proof of the underlying case and on showing relevant delay or obstruction. The judge considered it reasonable for IM and counsel to regard the proposed claim as having little, if any, settlement value.

“The claim is dismissed.”

Mr Justice Mansfield, concluding the approved judgment

The judge concluded that the advice to settle the professional negligence claim against RPL was reasonable in all the circumstances. There was no realistic prospect that RPL would have agreed to pay more, and no realistic prospect of a better result had CLF proceeded to trial. The judge considered that the outcome would, in all likelihood, have been significantly worse for CLF.

Why did the interest clause claim fail?

The remaining allegation concerned the earlier order for sale settlement. CLF said IM should have advised it to include a clause providing for interest if the settlement sum was not paid on time.

The judge accepted that an interest provision might, with hindsight, have benefited CLF given the time taken to complete the settlement steps. However, that did not establish negligence. There was no reason to think that Ms McCann or Mr Raby would have agreed to such a term, particularly when the settlement also required property interests to be transferred and the parties had to complete a series of steps.

The court also took account of the litigation position at the time. A security for costs application was imminent and the trial was only weeks away. IM and counsel considered that CLF was likely to lose both the application and the trial. CLF’s director had the opportunity to consider the settlement terms before the agreement was signed, and the judge noted that CLF was itself a sophisticated commercial lender.

There was a further problem with the pleaded case: the settlement agreement did not specify a payment date, and the evidence did not establish that Mr Raby or Ms McCann had breached its terms. The judge therefore found that IM was not negligent in failing to propose an interest clause. Even if there had been a breach of duty, there was no realistic chance that the other parties would have accepted the proposed term or that CLF would have refused the settlement and achieved a better result.

What does the judgment mean for solicitors?

The decision illustrates the importance of assessing settlement advice against the information and risks available at the time, rather than with the benefit of hindsight. A client’s later dissatisfaction with the outcome does not, by itself, establish that the advice fell below the standard of a reasonably competent solicitor.

It also underlines the practical importance of reliable source records when a claim depends on proving a substantial debt. Where ledgers, bank records and supporting documents have unclear provenance or unexplained gaps, those weaknesses can affect the prospects of the underlying litigation and the value of any related professional negligence claim.

Finally, the judgment confirms that solicitors may generally rely on properly obtained counsel’s advice, while retaining their own responsibility to exercise independent judgment. In this case, the court found no basis to conclude that counsel’s advice was obviously or glaringly wrong, and dismissed the claim in full.