Contact and Third Parties
At one time a solicitor’s duty to his client was determined by the terms of the retainer, i.e. the contract between them. However, it is now firmly established that a solicitor owes a duty of care in negligence both to his clients and also to third parties within the scope of the “neighbour” / proximity principle.
In 1978, the Supreme Court held that a solicitor owes a duty of care to a beneficiary of a will. There is sufficient relationship of proximity. The duty applies, regardless of whether there is a contract or not.
If a solicitor undertakes to act professionally without reward, the duty will nonetheless exist. He knows or ought to know that a third-party will rely on his professional skill and care.
It is established that the seller’s solicitor has a duty of care to the purchaser when responding to enquiries raised by the buyer’s solicitor. This is notwithstanding that the purchaser is independently advised. In answering requisitions on title he will owe a duty of care to the purchaser.
Solicitor’s Duties
The duty of care requires a relevant professional person carries out his duties as a suitably qualified member of the profession would. He should consider common practices which involve obvious and unnecessary risks. Pure economic loss caused by negligent advice or the negligent provision of a service, may be recovered in negligence.
The solicitor’s duties are generally defined and limited by common practice in the relevant area. In a claim for solicitor negligence, expert evidence by experienced solicitors practising in the area will be offered to define the duty, in the event of a dispute. Notwithstanding the above exception, it a solicitor act in accordance with the standard and normal practice in the area, he is unlikely to be held negligent.
The solicitor’s duty will not be discharged merely by following instructions. The duty of care in a professional advice setting requires the solicitor to be proactive in using his special skill and knowledge where appropriate, to identify and point out risks to his client. Where there are potential problems and it is appropriate to make further investigations and follow up, he should do so.
He should consider the circumstances and legal implications as they apply, and bring matters to his client’s attention as appropriate. The solicitor should consider the client’s personal circumstances and advise on the appropriateness of a particular course of action. Even if a case has apparent merits, it may be imprudent for the claimant to pursue it, in his particular financial circumstances
Solicitors
A solicitor undertakes a range of activities in which solicitor negligence could arise. They include acting in transactions, advising, drafting, selecting counsel, acting on the advice of counsel. The role is varied. Within the last 20 to 30 years, most solicitors have specialised in particular areas of practice. New areas of practice have developed and many solicitors are specialists in the areas of practice, which barely existed two decades ago.
Where a solicitor gives incorrect advice on a clear and well-established point of law, it will generally be negligent. If the law is less clear, then he may not be liable if his advice is reasonable, although it later emerges that it is incorrect.
A solicitor is not liable for negligence, where he is not in breach of his general duty of care, but is in breach of a particular obligation under his contract, which would not exist but for the contract. He may, of course, be liable for breach of contract.
A solicitor may be negligent if he fails to give advice in relation to a transaction, or to fails to give particular advice. A solicitor may be liable in negligence where he has failed to make appropriate inquiries and discover certain matters, which with due care he would have discovered or having so discovered them, failed to communicate the same to his client, where relevant.
Solicitor Negligence and Litigation
A solicitor may be negligent in relation to litigation in several ways. Solicitor negligence could arise if the solicitor breached his duty of care in the failure to commence, prosecute or in the negligent prosecution or defence of a claim. A common basis of negligence is the failure to commence proceedings which should have been taken, prior to the expiry of the Statute of Limitations 1957 (or the 1991 and the 2000 amendments) time limit.
However, a solicitor’s responsibility may be limited to what counsel advises. Generally, where a solicitor instructs competent counsel and acts on his advice, he will not be liable for negligence. A solicitor is not liable for the negligence of counsel and conduct of the case. A solicitor may be negligent in failing to select a competent or appropriate counsel. Although this is the traditional position, blind adherence to counsel’s advice may be negligent in some cases.
Solicitor negligence could also come from a solicitor exposing his client to costs. In some cases, the failure to provide a letter of engagement setting out costs and other risk factors may be negligent. It may be negligent to fail to make or accept a lodgement made.
Many cases of negligence arise from failures in communication. It may be negligent to fail to take instructions and put them into effect. It may be negligent not to liaise with a client and advise him of the position in the case.
Solicitor Negligence and Transactions
Conveyancing gives rise to many cases of negligence. Solicitors owe a duty of care to their own client in relation to the conduct of sale and purchase transactions. The solicitor may owe a duty of care in conveyancing matters to the other party. This may occur in replying to enquiries. The seller’s solicitor must proper instructions and take due care in replying to the buyer’s solicitor.
There have been many instances of professional negligence claims, where property has been purchased with a defect which affects its value, such as the absence of necessary easements or covenants which limit its use or development.
The general principles of negligence apply. A solicitor must act with due care and skill, having regard to the practices and standards of the profession. It may be negligent to follow the standard and practices of the profession, where there is an obvious defect in those practices. If the practice carries obvious risks, notwithstanding that it is standard practice, it may be capable of constituting negligence.
There have been a number of negligence cases involving intoxicating liquor licenses. The law on licensing has technical aspects, which may have arbitrary effects. If a solicitor fails to investigate and ascertain the true nature of the licence, it may impact severely on the value of the premises.
A number of cases have involved the failure by a solicitor to advise that a survey should be undertaken upon the purchase of second-hand property. There may be a serious or catastrophic loss for the buyer in the event there are serious defects in the property. In some cases, the solicitor failed to advise his client to obtain a structural, where a financial institution has undertaken a high-level valuation, which had reassured the client.
The failure by a solicitor to comply with an undertaking is professional misconduct. Apart from liability in negligence, the obligation created by an undertaking may be enforced directly by order made on foot of summary application to the High Court.
Subsequent to the collapse of the property market in 2008, a number of cases involved alleged negligence on the part of buyer’s solicitors in accepting undertakings by solicitors for the seller, who subsequently failed, fraudulently to satisfy them. Notwithstanding that it was standard practice to accept the undertakings of another solicitor, the uncritical acceptance of undertakings and in particular failure to follow up on compliance was negligent.
Solicitors’ Fiduciary Duties
Solicitors, as fiduciaries, have duties to avoid conflicts of interest. Where there is a conflict of interest, a solicitor should not act. He should advise his client to take independent legal advice. In some cases, a solicitor may act where he has disclosed the conflict of interest and where his client has given informed consent to his continuing to so act. However, the solicitor should not readily assume that this is appropriate.
Solicitors owe fiduciary duties to their clients. They may not abuse or take personal advantage of the circumstances or situation created by the relationship of solicitor and client. This would include profits made from his position. A solicitor who breaches this duty may be obliged to account to his client for all benefits received. This liability is not limited to compensation for loss actually incurred.
Standard of Care
The standard of knowledge required of a solicitor is that of a reasonably competent solicitor. Key areas of law should be known. However, a solicitor is not obliged to know the contents of every statute or law. In appropriate cases, however, he will be obliged to research and ascertain the relevant point, either directly or with the assistance of counsel.
Many professional negligence cases against solicitors involve the failures to commence legal proceedings within the time limit provided by the Statute of Limitations, where a solicitor has been instructed in a matter. The failure to issue proceedings within the time limit provided by the statute will mean that his client is barred from taking action.
Where a transaction involves a complex document such as a lease, there is an onus on the solicitor to explain the implications of its key terms and conditions. If the lease contains unusual clauses or clauses which impact on the claimant’s proposed use of the premises, it is likely to be negligent to fail to explain and communicate them.
A solicitor is not generally obliged to advise on the commercial merit of matters. He may be obliged to explain the effect of documents. However, he is not generally obliged to advice in relation to the wisdom or otherwise of a particular transaction.
Damages and Causation for Solicitor Negligence
Notwithstanding that the solicitor may have failed in a duty of care, he will not be liable unless this can be demonstrated in the balance of probabilities to have caused the claimant’s loss.
Causation will often be an issue in professional negligence claims against solicitors and barristers. The claimant must (for example) show that on the balance of probabilities, he would have acted differently but for the negligent advice.
Where claims arise from the acquisition of property, the measure of damages will generally be the difference in value between the diminution in value as a result of the negligence. This may be the difference between the actual market value with the known defect in the marketplace and the price paid.
Where a solicitor’s negligence in the course of a litigation transaction, the measure of damages will depend on what the claim would have realised if the relevant action was properly prosecuted. It may be necessary to consider the prospect or probability of winning.
The prospects of success for a lost claim require analysis of the probabilities and contingencies. Account may be taken of the possibility of a settlement.
Immunities of Advocate Removed
Traditionally barristers were immune from liability for negligence and other civil wrongs in course of their practice. The rule traditionally applied both to the preparation for litigation and the conduct of the case itself. The rationale for the immunity was the absence of contractual obligation in a barrister’s retainer and the undesirability of re-litigating cases after the event. The courts held that there was a public interest in the finality of litigation.
Over the last 40 years, the courts in common law countries have reduced the immunity of barristers. In 1979, the immunity was restricted, so that it applied only to work intimately associated with the conduct of the case. It was to have no wider application than absolutely necessary in the interest of administration of justice.
In 2000, the House of Lords reconsidered the matter again and removed immunity for barristers in both civil and criminal cases. The decision was based in part on the negligence principles and in the protections in the European Convention on Human Rights, which had been made part of the law in the United Kingdom. The House of Lords considered that the justifications for retention of the immunity were insufficient in modern circumstances.
It was argued that barristers in legal proceedings, should have complete freedom to act without fear of sanction or litigation. Parties and witnesses are largely immune from defamation liability, provided that they act in good faith. Witnesses as such, do not have a duty of care to the parties. The duty to the court and duty to speak the truth requires that they should have no fear of claims for defamation or negligence arising out of their evidence.
The Irish courts have not yet addressed the issue of immunity of advocates. In view of the reversal of the traditional position in England and Wales and other jurisdictions, it is likely that the Irish courts will follow suit.
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