Negligent Solicitor Case Study: High Court rules on date of assessment of loss

In Gosden and another v Halliwell Landau and another [2021] EWHC 159 (Comm) a claim of £985,300 has been awarded in damages after the firm of solicitors negligently failed to register a restriction against a property at HM Land Registry. Negligence on behalf of the defendant firm of solicitors was established and it was accepted that damages should reflect the value of the property.

The interesting point to note about this judgment is that the default position in professional negligence cases, is that damages should be determined in tort at the date at when the loss caused by the breach of duty occurs. In this case, the parties could not agree when the actual loss crystallised. In his judgment Judge Pelling QC departed from the default position and stated that the Estate Protection Scheme was clearly meant to take effect from the date at which the deceased passed away, it was at that date that the true loss occurred. Without departing from the default rule, the Claimant would have been under-compensated were an earlier date to have been used to assess damages and overcompensated were the date of the trial to have been used.

We are specialist professional negligence lawyers with expertise in claims against specialist property solicitors and licenced conveyancers. If you have a claim, contact our expert team as soon as possible as all litigation has strict time limits which you must adhere to.

The Facts

The claim was brought by the claimants against the first defendants, a firm of solicitors and the second defendant, a solicitor who was at all material times a partner in the first defendants, for damages for professional negligence in the implementation of a proprietary tax mitigation scheme known as an Estate Protection Scheme (“EPS”), by which it had been intended that a property owned by Dr Jean Mary Weddell (Deceased) would pass on her death to the first claimant, or (at the option of the Deceased) a class of intended beneficiaries consisting of the claimants and their children, with substantially less tax (mainly Inheritance Tax [“IHT”]) being payable than if the Property had been disposed of by will.

The property remained registered in the sole name of the Deceased but was subject to a trust of which the claimants and Deceased were trustees which was created for the purpose of carrying the EPS into effect. The Property was sold in 2010 by the Deceased in breach of trust without the knowledge or consent of either claimant, each of whom, together with the Deceased, were trustees of the Trust.

The Judgment

In the earlier judgment, the judge concluded that the defendants had been negligent in failing to register a restriction at HM Land Registry in order to protect the interest in the property of the beneficiaries of the EPS.

In the circumstances of the case, it was appropriate to assess the claimants’ loss at the date of the deceased settlor’s death, not the date when she sold the property in breach of trust. In his judgment Judge Pelling QC said that the reason for departing from the default position was that the EPS was meant to take effect from the date at which the deceased passed away because it was at that date that the true loss occurred. Judge Pelling QC also made reference to the fact that the Claimant would have been under compensated were an earlier date to have been used to assess damages and over compensated were the date of the trial to have been used.

Download the Judgment here

Can I make a negligence claim against a solicitor or barrister?

Legal professionals such as solicitors and barristers are highly trained and rigorously regulated by the Solicitors Regulation Authority (SRA) and the Bar Standards Board (BSB) respectively. A high level of trust is placed upon such lawyers by their clients. If a lawyer fails to deliver the service to the standard expected of a reasonable professional in that speciality field, then a client has every right to bring a complaint (and court proceedings) if financial or personal loss is suffered as a result.

How can a lawyer be negligent?

Professional negligence occurs where a professional fails to perform his responsibilities to the required standard.
A claim brought by the professional’s client may be based on one or more of the following:

  • Breach of a contractual term (express or implied).
  • Breach of duty of care owed in the tort of negligence.
  • Breach of fiduciary duty.
  • Breach of statutory duty.

Where a duty is owed in contract or tort, you must establish that there has been a breach of that duty. You must show that the professional did not comply with the requisite standard owed. Broadly speaking, negligence is established if the professional has made an error which no reasonable member of his profession, operating in similar circumstances, would have made. Where such errors cause a financial loss, claims can be pursued against the relevant lawyers.

What are the basic requirements to claim negligence?

The tort of negligence has three basic requirements. All of these must be evidentially proved on a balance of probabilities (ie that they are more likely than not):

  1. Duty of care – The defendant owed the claimant a duty not to cause the type of harm suffered.
  2. Breach of duty – The defendant breached the duty owed.
  3. Causation – This has two elements, both of which must be proved ie (a) factual causation in that the claimant must prove, but for the defendant’s negligence, they would not have suffered loss and (b) legal causation or remoteness in that the defendant’s negligence was the legal cause of loss.

Common Examples of Solicitor Negligence

Examples of common claims against solicitors, barristers, patent attorneys and licenced conveyancers include:

  • Failing to provide correct legal advice: a claim can be brought if a lawyer has provided a negligent legal opinion, relied upon by a claimant, which has led to personal or financial loss.
  • Failing to fully investigate or properly evidence the claim: solicitors and direct access barristers may be negligent in not gathering all pertinent information to ensure a claimant’s case is successful e.g. by not obtaining witness statements which supports the version of events.
  • Failing to fully warn the client on the risks: for example a solicitor will be negligent if a specific risk warning that a tax avoidance scheme might fail.
  • Missing a limitation date leading to a claim becoming time-barred: if the original claim had merit, then a claimant is entitled to pursue the errant solicitor or law firm for their loss of chance of success in the claim.
  • Failing to comply with a court order or deadline: if your claim has been struck out by the court after your solicitor or barrister breached an order of the Court (e.g. an unless order), then you may have a claim against the legal professional for poor performance of the litigation.
  • Poor performance of instructions: failing to adequately investigate title to property when acting for the buyer of a property; failing to advise on burdens affecting a property e.g. restrictive covenants, adverse rights burdening the property, failing to register a mortgage/debenture at Companies House if acting for a buyer client company.

What is the time limit for commencing a claim against a solicitor or barrister?

When it comes to ascertaining the limitation date for a particular claim, there are a number of factors to consider. In simple terms, the limitation period is six years from the accrual of the cause of action (section 2, Limitation Act 1980).

However, if the six year time limit has passed but you have only just discovered the effect of any latent damage, then the limitation period may be extended to three years from the date of knowledge (section 14A, Limitation Act 1980).

Time limits and limitation periods are essential to adhere to in litigation. Missing a limitation period is fatal to the chances of success of any claim and will leave a claim statute barred.

Looking for a solicitor that can offer a no win no fee agreement?

When you instruct us to resolve your legal problem, your case will be dealt with by highly qualified and experienced lawyers.

Damages-Based Agreement (DBA) is an arrangement whereby legal fees are only payable in the event the instruction is successful. We are open to offering DBAs as a means of furthering access to justice to individuals or companies that have a strong legal claim that cannot otherwise be pursued due to the costs of obtaining expert legal advice.

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. The strength of the legal teams available to our clients helps ensure matters are progressed efficiently and the very best results are obtained for our clients.

Book an Initial Consultation with our Professional Negligence Lawyers

Do you have a claim against a professional? If you want expert legal advice, do not delay in instructing us so we can assess the legal merit of your case.

We can often take on such claims on a no win no fee basis (such as a Conditional Fee Arrangement or Damages Based Agreement) once we have discussed the claim with you and then assessed and advised you on the merits of the proposed professional negligence action.

Our expert legal team of leading Professional Negligence Solicitors & Barristers can provide urgent help, advice or representation to you. Just call our Professional Negligence Lawyers on 02071830529 or email us now.

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LIMITATION ACT 1980 – WARNING

The Limitation Act 1980 sets out strict statutory deadlines within which you must bring litigation claims. Your legal rights will become irreversibly time-barred if you fail to take legal action (or defend a claim on time). Therefore, you should seek specific legal advice about your legal dispute at the very first opportunity so that you understand the time you have left. Failure to take advice or delay in taking action can be fatal to your prospects of success.

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