Cyber Fraud Professional Negligence Dispute Resolved in Just Over Half a Day

Background

A former client pursued a claim against a solicitor following a cyber attack in which the client’s email account had been infiltrated. During the course of the transaction, the solicitor received a request appearing to come from the client asking for balance monies to be sent to a different bank account.

The difficulty was that the request was fraudulent, but it was not recognised as such at the time. The monies were sent to the substituted account and were lost. The solicitor later reimbursed the client for the missing funds, but that did not bring the dispute to an end.

The former client maintained that the incident had caused significant upset, stress, and loss of trust, and proposed professional negligence proceedings followed.

The Challenge

By the time mediation was considered, the matter had already been progressing for around two years. Both participants had engaged solicitors, and the professional indemnity insurer had appointed separate solicitors of its own. Costs were escalating steadily, while positions were becoming more entrenched.

The legal issues were only part of the problem. The former client wanted recognition of the distress caused by the incident, while the solicitor and insurer were defending a claim that had moved beyond repayment of the lost monies. Without some form of direct engagement, the matter risked continuing as an expensive professional negligence dispute driven as much by emotion as by legal analysis.

The Mediation

The mediation was conducted on a facilitative basis. Rather than focusing on evaluative testing of liability alone, the process was designed to bring the former client, the solicitor, and their respective representatives into the same space so that each could properly understand the other’s position.

That shift mattered. The former client was able to explain directly the personal impact of the incident and why repayment of the money had not, by itself, resolved the matter. The solicitor and the insurer’s representatives were able to explain their own perspective, the steps that had been taken after the attack, and the way the claim had developed over time.

Once the discussion moved away from purely positional exchanges through solicitors’ correspondence, the dispute became much easier to resolve. The mediation created enough space for acknowledgement, practical discussion, and movement on both sides.

The Outcome

A conclusion was reached in just over half a day. The dispute settled on agreed terms, avoiding the further cost, delay, and stress of professional negligence litigation.

What had been escalating for two years through multiple sets of solicitors was resolved once the participants were brought together in a structured mediation process and given the opportunity to recognise each other’s position directly.