Solicitor failed to advise on “obvious risks” of off-plan property schemes

An experienced solicitor who specialises in residential and commercial property law has been reprimanded by the Solicitors Disciplinary Tribunal (SDT) for failing to advise on the “obvious risks” of four off-plan property development schemes. The solicitor failed to adequately advise clients investing in property development schemes about the high risks inherent in the schemes. Although a solicitor is not obliged to travel outside his instructions and make investigations that are not expressly or impliedly requested by the client, the risks of the schemes were precisely the types of risks that the solicitor ought to advised his client.

Solicitors are highly regulated and owe their clients a contractual, statutory and tortious duty of care to act in their best interests. We understand as lawyers where solicitors go wrong and where solicitors fail to act in their client’s best interests to effectively act upon their client’s instructions.

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 and therefore it is essential to take legal advice at the outset from our expert professional negligence team.

The Background

The lawyer was an experienced solicitor who specialised in residential and commercial property law, including property developments. He had generally acted for developer clients, but also for buyers in off-plan schemes. The allegations involved his role when acting for buyers in relation to four “fractional” property development schemes.

The solicitor accepted that he had not provided adequate advice to his clients but the Tribunal noted that at the time he considered he had complied with his obligations. Nevertheless, whilst not intended, the harm was foreseeable given the solicitor’s level of experience.

Was the solicitor’s advice inadequate?

Yes, the SRA regarded the property schemes as inherently risky and even though the client care letter stated that independent advice should be sought on the schemes, an inexperienced client will need and will be entitled to expect that solicitor to take a much broader view of the scope of the retainer and of his duties than will be the case with an experienced client.

Advice as to risks was at the very least capable of having a material bearing upon the decisions that these clients made. In the event, clients did not receive that advice and so were unable to make such informed decisions. Where some clients might have decided that it was not in their best interests to invest, they have been deprived of that opportunity and instead faced the risk of losing the whole of their capital.

The advice provided and representations given were so inadequate as to be incompetent. Moreover, the Respondent wrongly considered that because (in his view) some of his clients were sophisticated, therefore they did not require relevant advice

SRA v David Hayhurst (Case no. 12072-2020)

Download the SDT Judgment

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.

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Can I challenge my solicitor’s bill?

In addition, unlike many other law firms, we have an experienced legal costs team, who specialise in challenging the reasonableness of bills/invoices rendered by your previous solicitor. We find that in many professional negligence claims, clients are not happy with the service they have received and in tandem the price that they have paid for the sub-standard work completed.

If you consider that your bill (i.e. invoice) is overpriced for the work that you instructed to be done, our expert costs team can help you to understand the reasonbaleness of the bill(s) and if appropriate, challenge the bill in addition to any professional neglgience claim.

Can I challenge my solicitor’s bill and start professional negligence proceedings?

This is a relatively contentious area. Challenging a bill is commenced in the Senior Courts Costs Office (SCCO), whereas commencing professional negligence proceedings (if the claim is for more than £100,000) is in the High Court.

One of the Court’s overriding objectives in the Civil Procedural Rules is to save time and expense. The Court generally do not condone claimants commencing parallel proceedings and if costs proceedings are commenced in the SCCO, and the pre-action protocol for professional negligence is ongoing, the SCCO will likely order a stay of the costs proceedings in order to enable the parties to comply with the pre-action protocol for professional negligence. However, this varies depending on the individual facts of a case.

No win No fee for solicitor and own client costs disputes

We specialise in costs disputes at the Senior Courts Costs Office (SCCO) proceeding under the Solicitors Act 1974. That is why we can offer a no win no fee agreement to clients once we have had sight of the relevant papers (and ideally a detailed bill of costs). This means you do not have to pay us anything should your solicitor’s bill not be reduced.

We will advise you on the merits of reducing your solicitor’s invoice. Discuss the merits of early protective without prejudice settlement offers. We draft Points of Dispute (for clients) and Points of Reply (for solicitors). We will Represent you at any directions hearing, preliminary issues hearing and the detailed assessment hearing before the SCCO.

Looking for a solicitor that can offer a DBA in your professional negligence claim?

When you instruct us to resolve your legal problem, your case will be dealt with by highly qualified and experienced lawyers. We understand the importance of promoting and furthering individual access to justice particularly during these unprecedented and uncertain economic times. Our work on ensuring DBAs are accessible to all has made the national headlines and is the subject of a leading UK High Court case.

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.

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