Firm avoids negligence claim after it is ruled time barred

In a recent case of Elliott v Hattens Solicitors, the Court of Appeal ruled that a professional negligence claim against a firm of solicitors was statute barred as the loss has occurred more than six years prior to the date of issue of proceedings.

In this matter, Lord Justice Newey ruled that the limitation period began not on the date of the incident, but instead when the lease was executed and the law firm negligently failed to obtain a guarantee nor advised the client about the need for insurance.

The court heard that the client here, Kelly Elliott acted on a transaction of leasing her property in Grays, Essex and granted an underlease to a man named Jamie Malster, with the intention to obtain a guarantee from Mr Malster’s parents for his obligations under the lease. In pursuance of their instructions, Hattens prepared the documents in February 2012 but failed negligently to name Malster’s parents as parties to the underleases nor advised the claimant the need to obtain insurance.

A fire broke out at the property later in November 2012, which effectively destroyed the buildings on the site. Mr Malster subsequently vacated the property without undertaking repairs and left the claimant without any recovery for the uninsured losses and which further caused a loss of rent.

The claimant, Mrs Elliott attempted to sue the local firm Hattens for damages in April 2018 but was prevented by the Limitation Act from pursuing a professional negligence claim against her solicitors’ firm after she waited more than six years after the lease and underlease was executed but less than six years after the fire. Mrs Elliott’s case had proved that the cause of action in tort had not been accrued until she suffered consequential damage, upon the date of the fire.

In the circumstances, Hattens accepted that they failed to exercise ‘reasonable skill and care’ in drafting the documents and advising Mrs Elliott Hattens but pleaded that the claim was statute-barred. Hattens argued that the claimant suffered damage “as soon as the lease and underlease were executed” which placed them in a “measurably less advantageous position”.

Supporting the decision, Lord Justice Newey stated that despite the case highlighted as a “flawed transaction”, the claimant would still have taken a lease and granted an underlease of the premise to Mr Malster had there been no negligence. Assuming that Mr Malster guaranteed his obligations and Hattens had not been negligent, it is to be assumed that the claimant would have been warned of the need to insure the property.

The judge held that Ms Elliot’s negligence claim should be not be treated any differently and ruled that it should be statute-barred in its entirety, allowing Hatten’s appeal.

Read the full judgment here: Elliott v Hattens Solicitors (a firm) [2021] EWCA Civ 720

What is a limitation period?

The law sets out deadlines for bringing legal claims, which are referred to as limitation periods. The purpose of limitation periods is to prevent legal claims from being brought too long after the cause of action accrued. The length of the limitation period varies with different types of legal claim.

Professional Negligence Limitation Date

If based on contract, 6 years from the date of the breach of contract (section 5 of the Limitation Act 1980)

If based on the common law tort of negligence, 6 years from the date the Claimant suffered a financial loss as a result of a negligent professional (section 2 of the Limitation Act 1980)

Importance of time limits in professional negligence claims

The judgment here clearly shows how a claimant can suffer a loss at the same time of the negligence, but may not be aware of this. A claim in tort will normally become time-barred six years after the cause of action accrued. The availability of a limitation defence runs from the date of the transaction and not from a later date when the client becomes aware of their loss.

Where a party has a strong case, but the limitation period has expired, the claim will be likely to fail. Even in unusual circumstances, where a party is prevented from issuing its claim in time for reasons beyond its control, the court has no discretion to extend the limitation period in this type of claim. It is, therefore, crucial that limitation issues are considered at the outset of any potential claims.

You should seek legal advice as soon as possible to avoid your claim becoming time barred.

My conveyancing solicitor has been negligent

A solicitor must hold a greater professional standard of care in servicing their client’s affairs however solicitors on occasion fail to act in their client’s best interest.  As a matter of conduct, solicitors are highly regulated and owe their clients a contractual, statutory and tortious duty of care. The last thing you expect when you hire a professional is for them to be negligent.

Professional negligence claims against members of the legal profession tend to be complex in nature and argument. Professional indemnity insurers will often instruct a specialist City of London law firm to defend claims vigorously, thus it is essential to take legal advice at the outset from our expert professional negligence team.

We understand as lawyers where solicitors go wrong and where solicitors have failed to act upon their client’s instructions.

How much is my professional negligence claim worth?

Quantification of losses is a significant part of any negligence claim. It is likely that expert evidence will be required to ascertain losses (usually from a surveyor, valuer or forensic accountant). A general rule of thumb is that the starting point will be the reduction in the value of the property as a result of the negligence from the conveyancer.

Instruct Specialist Professional Negligence Solicitors

We are a specialist City of London law firm made up of Solicitors & Barristers operating from the only law firm based in the Middle Temple Inn of Court adjacent to the Royal Courts of Justice. The firm is made up of exceptional lawyers who are practising solicitors and barristers supported by high quality paralegals, legal apprentices and other legal support staff. We regularly work in conjunction with leading Queen’s Counsel and junior barristers from chambers predominantly in London near to our own chambers in Middle Temple.

Our team can provide the best expertise in advising on claims for compensation against professionals that have fallen below the standard expected, which causes clients financial or personal losses. We are experienced in bringing you successful claims against negligent solicitors, barristers, financial advisors, surveyors, valuers, architects, tax advisors and IFAs.

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