The best examples of solicitor negligence are to be found in the case law reports and in specialist authoritative texts. However, while these sources in combination provide helpful categorisation and referencing, as well as extensive detail, they are only accessible on a private subscription basis and at considerable cost.
In this article, and with unrestricted access, we provide examples of solicitor negligence across a range of different legal practice areas. Further, and in each case, the example given is in summary form, both for ease of understanding and for reader efficiency.
While the examples of solicitor negligence that follow are intended to provide a useful insight into the different ways in which these types of claims can arise, they are by no means exhaustive. Indeed, the capacity for human error, even at a professional level, is such that to do otherwise would be impractical.
It should also be noted at the outset that allegations and claims of solicitor negligence are often highly fact sensitive. This means that although the outcome in one case can provide an indication of the likely outcome in another, considerable care is required when conducting any comparison.
Successful case examples of solicitor negligence
Starting on a positive note, at least from a Claimant perspective, we first set out those carefully selected examples of solicitor negligence which resulted in a finding of liability on the part of the solicitor and a consequential damages award in favour of the Claimant:
1. Solicitor negligence – conveyancing
Historical claims data provided by market insurers of solicitors has consistently shown that more claims against solicitors arise from conveyancing than from any other area of legal practice. As a result, case examples of solicitor negligence are numerous.
· Mansion Estates Ltd v Hayre & Co (2016)
In Mansion the Claimant had instructed the Defendant firm of solicitors to act for it on both its purchase of development land and its simultaneous sub-sale of part of that land. However, after completion, the Claimant discovered that the terms of the sub-sale restricted its access to the retained land, which in turn adversely affected its ability to develop the retained land.
The Claimant subsequently issued proceedings against the Defendant for solicitor negligence, alleging that not only had the Defendant failed to attach the correct plan to the conveyancing documents, but that it had failed to advise the Claimant on the potential to reduce its liability for Stamp Duty Land Tax (‘SDLT’).
In response, the Defendant asserted that it had attached the plan it had been given by the Claimant, that it had in fact warned the Claimant of the restrictions arising from that plan and that it had received the Claimant’s instructions to proceed with it regardless. The Defendant also asserted that there was no opportunity to reduce SDLT. In doing so, the Defendant relied upon two attendance notes of its discussions with the Claimant and a letter it had allegedly sent to the Claimant.
In giving judgment, the court concluded that it was implicit from the defence that the Defendant accepted that it owed a duty of care to the Claimant to advise on the issues blighting the retained land and that, in any event, such a duty was incidental to the Defendant’s retainer, as was a duty to calculate SDLT accurately.
The court also found as a matter of fact that the Claimant had given the Defendant the correct plan and that it would not, therefore, have been necessary for the Defendant to have advised on any restrictions. However, and fatally, the Defendant had then attached the wrong plan. In light of these findings, the court also found that the attendance notes relied upon by the Defendant were not accurate and misrepresented the true events.
In addition, the court determined that the structure of the transaction was such that a concession was available to the Claimant in respect of SDLT. Alternatively, and if it was not, it determined that alterations could and would have been made by the Claimant to secure such a concession. In these circumstances, judgment was entered for the Claimant in the sum of £229,970.
Further examples of solicitor negligence in conveyancing can be found in our related articles: Five Common Conveyancing Errors (Residential) and Five Common Conveyancing Errors (Commercial).
2. Solicitor negligence – wills & probate
Although research suggests that fewer than 40% of the adult population in the UK have a will, given the size and composition of the UK population, this still means that a large volume of wills do exist. In part at least, this also explains why there is a significant body of examples of solicitor negligence in this area.
· Gray v Buss Murton (1998)
In Gray, the Claimant brought a claim against the Defendant firm of solicitors in her capacity as both beneficiary and executrix under the will of George Akehurst.
Mr Akehurst had been a successful businessman and the owner of a fairly large house, known as ‘The Glen’. After the death of his wife, he had developed an attachment to the Claimant, whom he modestly referred to as his companion and housekeeper. Unfortunately, the relationship was not one of which Mr Akehurst’s son approved and after an acrimonious exchange, Mr Akehurst decided to alter his existing will.
Mr Akehurst undertook the alterations himself, using his existing will as a precedent. Amongst other changes, he sought to bequeath The Glen and various chattels to the Claimant absolutely and to remove any entitlement on the part of his son. Having done so, he asked the Claimant to get it checked by the Defendant.
Upon attending the Defendant’s office, the Claimant met with Mr Lightfoot, a trainee solicitor. Precisely what instructions Mr Lightfoot received and what advice he gave in relation to the altered will was in dispute. However, the meeting concluded with the Claimant (mis)understanding that both the creation and composition of the will was valid, and Mr Lightfoot having satisfied himself only as to the validity of the former.
In the event, and following Mr Akehurst’s death, it was held by judicial pronouncement that while the will was correctly executed and valid, it did not bequeath The Glen to the Claimant absolutely. As this was both contrary to Mr Akehurst’s intentions and the advice the Claimant believed she had received from Mr Lightfoot, she commenced a claim for damages for professional negligence against the Defendant.
At trial the court considered that Mr Lightfoot, with the advantage of the legal training and understanding that he had acquired, should not only have apprehended the potential for misunderstanding by the Claimant, but should also have done more to clarify the scope of the advice that the Claimant was seeking from him. The court further concluded that had Mr Lightfoot done so, the will would have been re-drafted so as to achieve Mr Akehurst’s intended bequest of The Glen to the Claimant.
For further commentary on the mistakes commonly made by solicitors and will writers undertaking wills and probate work, please see our related article: Negligent Will Writing & Probate – Five Common Mistakes.
3. Solicitor negligence – litigation
The rules and procedures governing civil litigation in England & Wales are both extensive and complex and it is not difficult to fall foul of them. When this happens, the ability to pursue perfectly valid claims can be lost. Unfortunately, delay in these circumstances is a common feature.
· Pearson v Sanders Witherspoon (1999)
In Pearson the Claimant was the owner and operator of a petrol station, to which he had commissioned Ferranti International plc to reconstruct the forecourt and install the latest computer-operated pumps.
In June 1988, and several years after completion of the construction works, the Claimant issued proceedings against Ferranti for petrol losses caused by leaking tanks or computer error. Little was done to progress those proceedings and in December 1992 the Claimant instructed a new firm of solicitors and then again in 1993.
In 1994, and after Ferranti had appointed administrative receivers, the Claimant issued further court proceedings against it, which were consolidated with the first action. In 1996, and unchallenged, the Claimant obtained judgment against Ferranti for £1,063,707.10. However, by that stage Ferranti had no assets and so the judgment debt was irrecoverable. The Claimant then issued a claim for solicitor negligence against the first and second firm of solicitors he had instructed in his dispute with Ferranti.
Following a trial, Mr Justice Gage found that from December 1988, when the Claimant settled a preceding claim issued against him by Ferranti, it was incumbent upon the First Defendant to progress the Claimant’s claim with all reasonable speed and that in failing to have done so, the First Defendant had acted negligently. The judge also found that had the First Defendant not acted negligently, a trial would have occurred in January 1992 and that the delay was the dominant and effective cause of the Claimant’s loss.
However, on appeal, the Court of Appeal held that it was not until the First Defendant had become aware of a newspaper report in 1991, which raised doubts about the financial future of Ferranti, that it came under a fresh duty to act swiftly and that, had it done so, a judgment could have been obtained in June 1993, around six months prior to the appointment of administrators. The court additionally held that the true value of the Claimant’s claim against Ferranti was approximately £100,000 and that against this, he would have had a 75% chance of successfully obtaining judgment and a 50% chance of enforcing that judgment. Accordingly, it ordered the First Defendant to pay damages to the Claimant in this action of £37,500, less Ferranti’s outstanding costs, plus interest.
4. Solicitor negligence – matrimonial
Relatively speaking, examples of solicitor negligence are less common in connection with divorce and matrimonial disputes. However, that may suggest a lack of detection, rather than a lack of occurrence.
· Patricia Beswarick v JW Ripman & Others (2001)
In Beswarick the Claimant instructed Mr Ripman, the First Defendant and a partner in the firm of solicitors named as the Second Defendant, to represent her as petitioner in divorce proceedings.
The underlying matrimonial proceedings, and the financial negotiations associated with them, that gave rise to the claim were prolonged and, at times, acrimonious. After 26 ½ years of marriage and having discovered that her husband was having an affair with her friend and work colleague, the Claimant sought legal advice from the Defendants on separation. This necessitated provision to be made for the disposal of the matrimonial home, the maintenance of two of her three children (‘Children’) and the division of various chattels.
On the basis of the advice she received, the Claimant ultimately agreed to a ‘clean-break’ order (‘Order’) which, amongst other matters, provided for the payment by the husband to the Claimant of a lump sum of £35,000. This was to be paid in part by the transfer of the net proceeds of sale of the former matrimonial home and the payment of £2,000 upon the return by the Claimant to the husband of certain identified items of property removed by her from their yacht.
At the time the Claimant agreed the Order, and with her consent, the Children were living with her ex-husband. However, this changed the following year when the Children returned to live with her. Unfortunately, no financial provision had been made for this eventuality within the Order and, as a result, the Claimant was unable to secure maintenance payments from her ex-husband.
The Claimant subsequently commenced proceedings for solicitor negligence against the First and Second Defendants (collectively ‘Defendants’) alleging, amongst other matters, that they had acted negligently by (i) advising her that she should consent to the Order, which contained inadequate capital provision and failed to cater for the probability that the Children would return to live with her; and (ii) failing to act in her interests so as to secure the return of her chattels.
In a detailed and lengthy judgment, the court held that the Claimant’s recollection of events had been influenced by her determination to achieve a better financial outcome in her current claim and by way of damages, than that achieved by the Defendants on her behalf and that, judged objectively, it could not be said that the Defendants did not act competently in agreeing the lump sum component of the Order.
However, the court also found that the Defendants had been negligent in failing to apprehend the potential for, and failing to make any financial provision for, the Children deciding at a later date to reside with her. In addition, the Defendants had failed to advise the Claimant as to the absence of any provision within the Order for the division of chattels and had instead assumed, unreasonably, that this would be resolved in due course by a separate agreement between the parties.
Having determined that, absent the Defendants’ negligence, the Claimant would have been entitled to maintenance by way of a periodic payments order and have received payments over a 5 ½ year period, the court awarded damages of £30,500, to include the estimated value of the chattels that the Claimant was unable to recover.
5. Solicitor negligence – personal injury
Much like residential conveyancing, personal injury litigation has in many instances become an industrial exercise, resourced by a production line of paralegals and legal technicians. While this often reflects the economic profile of the claims, it does increase the risk of professional negligence.
· Charles v Hugh James Jones & Jenkins (1999)
In Charles, the Claimant had been a pillion passenger on a motor-cycle that was involved in a collision with a lorry. The Claimant suffered serious injuries and instructed Goldstones solicitors to pursue a related personal injury claim on her behalf. Although liability was admitted by the driver of the lorry, little was done to progress the claim. The Claimant then instructed the Defendant firm of solicitors but, very shortly after receiving Goldstones’ litigation papers and unbeknown to the Defendant, the claim was automatically struck out for delay.
The Claimant subsequently commenced a claim for solicitor negligence against the Defendant, which admitted liability for allowing the original action to become struck out. However, it disputed the level of damages claimed against it and the matter proceeded to trial.
At first instance, the court found that had the original claim not been struck out, damages would have been assessed at a notional trial in January 1996. In assessing the Claimant’s loss, the court also relied on medical opinions obtained after the notional date of trial, which recorded a subsequent deterioration in the Claimant’s condition, and refused to discount the Claimant’s damages award to reflect the risks generally attendant on litigation.
On appeal by the Defendant, the Court of Appeal endorsed the approach taken by the court below. More particularly, it held that while a judge’s task was to assess damages that the Claimant would have recovered at the notional trial date, in appropriate circumstances, a judge may well be assisted in coming to a view as to the damages which would have been awarded at the notional trial date, by knowledge of what had in fact occurred. Further, and in this case where both the driver of the lorry and the Defendant had admitted liability, there was no risk attendant on the litigation so far as liability was concerned which would warrant a discount to the damages awarded.
6. Solicitor negligence – corporate
Corporate transactions are often complicated and time-sensitive and these features combined increase the risk of solicitor negligence. Where mistakes do occur, the financial losses can be significant, as can the costs of any related professional negligence claim.
· Wellesley Partners LLP v Withers LLP (2014)
In Wellesley the Claimant was an executive search agency operating predominantly in the investment banking sector. In 2007 it decided the time was right for further expansion and it identified Addax as a potential investor. The Claimant instructed the Defendant to advise on and prepare the documents needed to complete the investment, which itself necessitated an amendment of the Claimant’s existing LLP agreement.
In due course, Addax’s solicitors circulated an amended draft LLP agreement which, amongst other matters, provided that after 42 months from the date of the agreement, Addax could issue an Exercise Notice which would unwind half of its investment in the Claimant. Unfortunately, and without having appreciated the significance, the Defendant further amended this provision, so as to permit Addax to issue an Exercise Notice from the date of the agreement and for a period of up to 41 months thereafter. Despite other amendments to the draft agreement, this provision remained unchanged and eventually formed part of the signed LLP agreement.
As a result of the global financial crash that followed, and approximately 12 months after entering into the LLP agreement, Addax served an Exercise Notice requiring the Claimant to terminate its membership in relation to 50% and refund 50% of its $4.75m investment. Litigation then followed, which was eventually settled on terms that provided for payment to Addax of various sums in satisfaction of its interest in the Claimant.
The Claimant subsequently commenced a claim for solicitor negligence against the Defendant, primarily asserting that it had amended the Exercise Notice without instruction. Although this was denied by the Defendant, the judge at first instance found on the evidence that there was no conceivable reason why the Claimant would have initiated such an amendment and that the Defendant must have either misunderstood or misremembered the instructions that it had received. On this basis, and this basis only, he considered that the Defendant had indeed been negligent.
As to the losses suffered by the Claimant, the judge concluded that it was entitled to recover damages of £1,612,313, representing the lost chance to achieve those profits that the Claimant would have enjoyed from a continued investment by Addax and wasted management time. Both the Claimant and the Defendant appealed.
On appeal, and amongst other matters, the Court of Appeal held that the judge had been wrong to apply the tortious test for remoteness, rather than the more restrictive test in contract. Nevertheless, this did not affect the result. It also held that the judge had been correct to apply loss of chance principles to the Claimant’s claim for loss of profits and it refused to interfere with his assessments. Accordingly, and save for a modest increase to the damages awarded for wasted management time, the outcome at first instance was unchanged.
Unsuccessful case examples of solicitor negligence
Not all case examples of solicitor negligence end in an award of compensation and assessing the merits of a particular case and its likely outcome is a complicated and involved exercise.
In the interests of balance and objectivity, we also provide the following case examples where the Claimant’s claim was ultimately unsuccessful:
1. Solicitor negligence – conveyancing
· Boateng v Hughmans (2002)
In Boateng the Claimant had been a secure tenant of a ground floor flat of a property which was otherwise vacant and in disrepair. As an alternative to undertaking the necessary repairs, the landlord invited the Claimant to purchase its freehold interest in the property for £65,000.
As the Claimant did not have the necessary funds to accept the invitation, he decided in turn to invite a third-party builder to finance the purchase, convert the property into three flats of which he would retain one, and then to re-sell the freehold interest to him.
The Claimant retained the Defendant firm of solicitors to advise and represent him in the proposed transactions. Following negotiations, contracts were then simultaneously exchanged for the purchase of the property by the Claimant for £65,000 and the sale of the property by the Claimant to Balancan Ltd, a developer, for £109,250. Amongst other terms, the contract with Balancan provided that Balancan would seek planning permission to develop the property into three flats and that Claimant would vacate the property when building works commenced.
Balancan funded its purchase by way of a loan granted by Nationwide, which was secured by a legal mortage over the property. This was accompanied by a consent form which the Claimant signed and which postponed his rights over the property to those of Nationwide.
Regrettably, relations between the Claimant and Balancan then broke down and Balancan went into liquidation. Thereafter, Nationwide sold the property to Gracegrove Estates Ltd, which in turn obtained an order for possession.
In a subsequent claim for professional negligence against the Defendant, the Claimant alleged that the Defendant had failed to advise him in various respects, including that he should not part with the freehold interest in the property without first obtaining better security.
Both at first instance, and on appeal, the court agreed that the Defendant had breached its duty of care. Each concluded that any reasonably competent solicitor would have drawn to the Claimant’s attention the fact that the contract with Balancan exposed him to the inherent risk of being left without any interest in the property, and any effective pecuniary remedy, in the event that Balancan became insolvent before completing the proposed construction work.
However, neither court considered that satisfactory or sufficient evidence had been adduced by the Claimant to persuade it that he would have enjoyed a different outcome had the Defendant advised as it should have done. Amongst other matters, the Claimant had not established that the directors of Balancan would have provided personal guarantees or that he would instead have simply sold the property on with vacant possession.
2. Solicitor negligence – corporate
· Luffeorm Ltd v Kitsons LLP (2015)
In this case Luffeorm Ltd, incorporated by its directors, Mr and Mrs Coles (collectively and for convenience ‘Claimants’), had decided to purchase the leasehold interest in a public house in Devon known as the Highwayman’s Haunt. Having agreed to purchase the lease from its current owners for £130,000, the Claimants instructed the Defendant to act on their behalf in connection with the purchase of the leasehold business.
Contracts were exchanged and the sale was completed in April 2011, at which time the Claimants commenced trading. However, after one of the vendors took over at a nearby public house in July 2011, trade quickly diminished. This ultimately caused the Claimants to dispose of the lease in July 2012 for £69,950, causing a significant loss to them.
In due course the Claimants commenced a claim against the Defendant for solicitor negligence. In essence, they alleged that the Defendant had failed to advise them (i) of the risk of trade being diverted in the absence of a covenant within the purchase contract preventing the vendors from competing with them; and (ii) to ask that such a covenant be included.
At trial, the Defendant accepted that it had not warned the Claimants about the risks they faced or the absence of such a covenant. While accepting that the Defendant had no obligation to advise the Claimants on the commercial wisdom of the transaction, the court did consider that the Defendant should have drawn the absence of any trade restriction to the attention of the Claimants and that in failing to do so, it had been negligent.
Nevertheless, the court also found on the evidence, and as a matter of fact, that the Claimants were keen to complete their purchase as quickly as possible and that even if the Defendant had acted competently, the Claimants would have proceeded as they did, without seeking such a covenant. Accordingly, the claim was dismissed on causation grounds.
3. Solicitor negligence – personal injury
· Perry v Raleys (2017)
In Perry the Claimant was a retired miner, who had been afflicted with Vibration White Finger (‘VWF’), a condition known to cause a reduction in grip strength and manual dexterity in the fingers and, in turn, the ability to carry out routine domestic tasks such as gardening, DIY or car maintenance.
In 1999 the Department of Trade & Industry set up a scheme to compensate miners suffering from VWF (‘Scheme’). Subject to satisfying various claim criteria, the Scheme made provision for the payment of two main types of compensation, similar in nature to awards for general and special damages in personal injury claims.
In 1996, and before the Scheme was introduced, the Claimant instructed the Defendant to pursue a claim for VWF on his behalf. In 1999, and following the introduction of the Scheme, the Claimant agreed to settle his claim in return for a payment of £11,600. However, he later discovered that this sum effectively represented the value of his general damages claim and that no claim had been submitted by the Defendant for special damages.
In 2009 the Claimant issued a claim for solicitor negligence against the Defendant. Damages of £17,300.17 plus interest were claimed, representing the value of the special damages award he had allegedly lost the chance to obtain. Before trial, the Defendant admitted that in failing to submit a claim for special damages it had acted in breach of duty. However, it nevertheless asserted that it had not caused any loss.
After a two-day trial, and based on the evidence before him, the judge concluded that the Claimant had not in fact suffered any significant disability as would have entitled him to a special damages award. He therefore dismissed the Claimant’s claim with costs. While the judge’s conclusions were subsequently reversed by the Court of Appeal, they were later restored following a further appeal to the Supreme Court.
Comments
All of the examples of solicitor negligence provided above are actual cases, rather than hypothetical ones. The range of examples will hopefully demonstrate the array of different scenarios in which claims for solicitor negligence can arise and of which the examples given are but a snap shot.
The unsuccessful examples of solicitor negligence will hopefully highlight that in order to secure any meaningful damages award, a Claimant must do more than prove that the solicitor in question has made a mistake: the Claimant must also prove that the mistake was causative of loss, both as a matter of fact and of law.
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