Most cases settle: why a likely compromise determined a £100,000 negligence award

When valuing a lost litigation opportunity, should the court focus on what might have been awarded at trial—or what the parties would probably have agreed in settlement?

In MPP (Services) Ltd v Ratio Law Solicitors LLP [2026] EWHC 2852 (Comm), His Honour Judge Stephen Davies approached that question through the commercial realities of litigation.

The court awarded £100,000 plus interest following a solicitor’s drafting error affecting security for a claim of £180,000. Central to the assessment was the judge’s conclusion that, without the error, the underlying dispute would probably have settled.

The judgment illustrates how the likelihood of compromise can shape the value of a lost litigation opportunity—and why mediation belongs at the centre of a realistic assessment of a dispute.

The background: a failed care home venture

MPP was an investment company controlled by Steven Reel and Stephen Carroll. They entered into a venture with an experienced children’s care home manager to establish children’s homes.

MPP provided funding and organised properties and conversion works. The manager was to contribute her expertise and subsequently run the homes.

Planning difficulties prevented two properties in Cheadle from being used as intended. An alternative proposal involved using a house owned by the manager, but the relationship broke down before that alternative could succeed.

MPP maintained that the manager had agreed to provide a legal charge over her house as security for £180,000, comprising wasted expenditure and a £20,000 loan. She disputed the alleged liability and the circumstances in which she had signed the charge.

The drafting error and the actual mediation

MPP’s draft charge identified the £180,000 sum. During amendments, its solicitor inadvertently removed the wording identifying that sum, leaving the executed charge without any statement of the amount secured.

The solicitors admitted that this was a breach of duty.

The manager subsequently challenged the charge. MPP eventually received advice that her argument that it was void for uncertainty was realistically unanswerable. At mediation, MPP agreed to cancel registration of the charge.

MPP then brought a professional negligence claim against its solicitors.

The question: what would have happened without the mistake?

The negligence claim required the court to value the opportunity MPP had lost.

That meant considering a hypothetical situation in which the legal charge had been effective. Would MPP have recovered £180,000 through litigation? Would the manager have successfully resisted some or all of the claim? Or would the parties have compromised?

The judge found that a valid charge would not have made the entire £180,000 an indisputable debt. The manager could still have challenged the underlying liability and the amount secured.

However, his assessment did not stop at predicting the outcome of a trial. He considered whether a trial would probably have happened at all.

“Most Business and Property Division cases do settle before trial”

The judge expressly identified the fact that:

““most Business and Property Division cases do settle before trial””

as one of his reasons for concluding that the underlying dispute would probably have settled.

That observation was supported by his assessment of these particular parties.

They had, in fact, managed to settle at mediation, although in circumstances where MPP had been advised that the defective charge would almost certainly defeat its position. The judge regarded MPP’s directors as pragmatic businessmen who would not willingly spend money against sensible legal advice.

He also considered the manager’s incentives. Although the dispute had a personal dimension, the charged property was no longer her home. She would have wanted to avoid the risks of bankruptcy and reputational damage while continuing her career.

Taken together, these factors led the judge to conclude that compromise was the likely outcome even if the drafting error had never occurred.

Why the likely settlement was £100,000

The next question was what that hypothetical settlement would probably have involved.

The judge considered the strength of the underlying claim, the available equity in the property, the costs of litigation and the practical means of funding a payment.

MPP had incurred approximately £27,000 in costs by the time of the actual settlement. Had the charge been effective, the parties would still have faced litigation over liability and the amount owed.

There was also limited headroom within the property equity to recover substantial costs, particularly if a contested trial had been followed by a forced sale.

The judge concluded that the most likely outcome was an all-inclusive payment of £100,000, funded by the manager remortgaging the property. He identified one possible justification for that figure as the £70,000 in fees paid to her, the £20,000 loan and interest.

The damages therefore reflected the value of a likely negotiated recovery. They did not simply reproduce the face value of the proposed security.

The trial alternative supported the same valuation

The judge also checked his conclusion against the alternative possibility that the underlying dispute had proceeded to trial.

MPP had fairly good prospects of establishing liability and recovering a good proportion of the £180,000. Nevertheless, liability and quantum risks, further litigation costs and the expense of recovering equity through a forced sale meant that the value of the lost chance would not realistically have been much different from £100,000.

The likely settlement was therefore central to the award, with the trial scenario providing a further check on its commercial realism.

This was not a penalty for failing to mediate, nor a general rule that damages must be limited to a settlement figure. It was a factual assessment of what this lost opportunity was worth.

What this means for mediation

The judgment recognises something familiar to commercial litigators and mediators: the probable destination of a dispute is often a negotiated agreement.

If settlement is likely, parties benefit from examining its realistic terms before substantial further costs accumulate. A useful assessment considers more than the best possible judgment. It asks what each party could reasonably accept, what risks they face and how an agreement could be funded.

Mediation provides a structured opportunity to undertake that exercise. It allows parties to explore the relationship between legal merits, costs, available assets and practical payment arrangements.

In this case, the court itself had to reconstruct the compromise that would probably have been reached. For parties currently involved in a dispute, mediation offers the opportunity to make that decision themselves.

At ProMediate, we help parties assess litigation risks and explore commercially realistic settlements in business and professional negligence disputes.

[]Based on the judgment supplied in MPP (Services) Ltd v Ratio Law Solicitors LLP [2026] EWHC 2852 (Comm), handed down on 6 November 2026. Read the judgment on BAILII. ↩