Negligence

"The leading rule for the lawyer, as for the man of every other calling, is diligence. Leave nothing for to-morrow which can be done to-day." (Abraham Lincoln)

The Bar Code of Conduct is surprisingly quiet on the issue of barristers keeping up to date with the latest sensations to appear from the higher courts. Paragraph 708(c) states:  

"A barrister when conducting proceedings in Court must ensure that the Court is informed of all relevant decisions and legislative provisions of which he is aware whether the effect is favourable or unfavourable towards the contention for which he argues."

And, of course, in the first three years' of practice, newly qualified practitioners are required to complete 45 hours of CPD, including at least 9 hours of Advocacy Training and 3 hours of Ethics (the "New Practitioners' Programme"). After the first three years of practice, barristers are required to undertake 12 hours of CPD each year (the "Established Practitioners' Programme").

There is nothing, however, that suggests that barristers should be up to date with the law. It is taken for granted of course, lest the shame of turning up to court, with your opponent furnishing a skeleton argument dripping with the latest offerings from their Lordships while you sheepishly tear up your own out of date version.

Two recent decisions however, bring into sharp focus what can occur when due diligence is not adhered to.

In Burke v Chapman and Chubb (a firm) [2008] EWHC 341 (QB), the claimant claimed damages for professional negligence or breach of contract by the defendant firm of solicitors in the conduct of her divorce proceedings and claim for ancillary relief. The wife asserted that during the marriage to her husband she had provided the deposit for the purchase of the former matrimonial home and contributed towards the purchase of the husband's business premises. The wife instructed her solicitors to apply for injunctive relief under s.37 MCA 1973.  The solicitors advised her to defer the application for a decree absolute until the financial matters had been settled and that advice was later reiterated. A caution was registered against the business address, the joint tenancy of the former matrimonial home was severed and an order made under s.37. The wife was made aware of a letter from the Inland Revenue to the husband that stated that arrangements were being made for a statutory demand to be served which might lead to the filing of a bankruptcy petition. The petition was filed but the husband failed to mention it at the final hearing in the ancillary relief proceedings. The final order included a property adjustment order in favour of the wife but the following month a bankruptcy order was made against the husband, with the result that the ancillary relief order was incapable of being met. The wife submitted that her solicitors should have advised her of the impending bankruptcy and its effects on the claim for ancillary relief stating a loss of £190,000.00.

Pendel J held that a competent solicitor should have foreseen a risk that the insolvency of the husband might adversely affect the ancillary relief claim. A solicitor foreseeing the risk ought to have warned the wife of it and advised her of it. However that would not have been enough to prevent the occurrence of loss, unless there was something that the wife could have done if she was armed with that information. There were no prospects of a negotiated settlement given the nature of the correspondence. The solicitors ought to have advised the wife that that to avoid the effects of the bankruptcy she should achieve an early settlement and should consider relaxing at least one of the measures that the wife had taken to freeze the assets that the husband could have used to pay his debts. It was doubtful that the wife would have followed the advice. The only realistic prospect of guarding against the husbands bankruptcy was to accelerate the ancillary relief proceedings. However it was doubtful that an earlier hearing could have been obtained. Therefore even if there was a breach of the duty to advise the wife of the additional steps that should have been taken to safeguard her position with respect to the ancillary relief claim, breach of that duty did not cause her to suffer the loss of which she complained , or any other loss. The question was whether a solicitor had failed in his duty of care. That question must be addressed in the light of facts known to the solicitor, or that ought reasonably to have been known by him at the time when he gave, or neglected to give, the advice in question. It cannot be addressed in the light of the facts that came to light, or the events that transpired, only subsequently.

In Williams v Thompson Leatherdale (A Firm) [2008] EWHC 2574 (QB), the claimant divorcee claimed damages from her solicitors and her barrister for professional negligence. The wife had retained her solicitors to advice on her proposed divorce from her husband. The solicitors instructed counsel to advise on a financial settlement. Counsel negotiated a settlement agreement for the wife three months before the decision in the House of Lords case in White v White [2001] AC 596, which changed the approach of the family courts to orders of financial provision. Under the consent order the wife received the matrimonial home and £1.28 million in two lump sum payments, as a clean break settlement. The wife subsequently lost this money in a property development scheme. At the time counsel was aware of the pending decision in White, but neither he nor the firm of solicitors mentioned the case or its possible favourable implications to the wife and counsel advised the wife on the law as it stood. The wife signed the agreement. Eight months later counsel advised the wife at a conference with the husband and his advisors, and the settlement terms were embodied in a consent order made nine months after that. The wife received less then she asked for but expressed herself satisfied with the settlement and relieved that she achieved the clean break she wanted. The wife submitted that (1) counsel was negligent in failing to appraise her of the possible implications of White, thus preventing her from making an informed decision on whether to wait until it was finally decided before settling her claim, and that if she had been aware of the implications she would have waited and thereby achieved a significantly higher settlement; (2) the firm of solicitors ought to have withdrawn the consent order, advised her concerning White, explained that the settlement could be changed or that she could pursue her claim in court, or sought counsel's advice about the implications of White.

Field J held (1) Counsel had been negligent in failing to advise the wife of the possible implications of White, but the wife had failed to show that she had suffered any recoverable loss. By the time of the conference with her husband, counsel was under a duty to explain to the wife that there was a real, but far from certain, possibility that the decision in White would benefit her. Counsel had not merely erred in his judgment which error would  have given rise to liability in negligence (Saif Ali v Sydney Mitchell & Co. [1980] AC 198 applied). It was for the wife not counsel to decide whether to go for a clean break, or to await the decision in White. Counsel was not under a duty to advise the wife to suspend negotiations until after the decision in White, and if he had advised that she ought to continue with them and not wait, that would not have been negligent. Counsel could have refused to express a view as to what the wife should do, and had he advised her that in his assessment she should proceed with the negotiations, that advice would not have been negligent. There was no indication in her evidence of what the wife would have done if counsel had advised her of the potential implications of White. The wife was shown to be an unreliable witness, but on the evidence generally, it was clear that she would not have postponed, but would have been happy to conclude the agreed settlement. The wife wanted a clean break and a new life with another man, a new career, and a particular house. Further the wife feared that the husband's business would fail, and wanted to avoid having a conflict with him. She also wanted to avoid disclosure of her bank statements. (2) The firm did not have a duty to withdraw the application for a consent order and advise the wife on White, or to instruct counsel to advise. The firm was entitled to rely on counsel's advice. The firm was not obliged to operate a system that alerted them to any appellate judgment concerning family law (??) In any case, the solicitors' partners were absent when White was decided and for some time afterwards. The wife had failed to show that she would have repudiated the settlement agreement if the firm had done as the wife submitted they should have done.

The Williams case brings back memories of S v S. In S v S (Ancillary Relief: Consent Order) [2002] 1 FLR 992, the wife petitioned for divorce after a marriage  of 26 years, a few months after the husband sold his company. Two days before the divorce was made absolute a consent order was signed with respect to the wife's claim for ancillary relief. The terms of the order which were fully implemented, stated that the former matrimonial home be transferred to the wife free of the mortgage; that she be paid a lump sum of £800,000.00 representing a clean break; and that provision be made for child maintenance and costs. The following month the speeches in White were delivered and 6 months later, after reading articles about the case in the newspapers, the wife applied to set aside / appeal the consent order.

Bracewell J held dismissing the application, that as a general proposition a change in the law may constitute a supervening event, within the meaning of Barder v Caluori [1988] AC 20, however the supervening event must be an unforeseeable one. White was a landmark case, was anticipated to be so and the wife and her advisors knew or ought to have known that. If with diligent enquiry the supervening event could have been ascertained prior to its occurrence then a person who failed to make the appropriate enquiry could not impugn the order.

Solicitors and counsel are in the same position as any other professionals. They are required to exercise reasonable care and skill. The test being what the reasonably competent practitioner would do having regard to the standards normally adopted by his profession. Lawyers are liable in respect of errors as no reasonably well informed and competent member of the profession could have made - but not for errors of judgment. Whether something was a mere error of judgment or amounted to negligence will depend on the subject matter, the context, the nature of the decision made or omitted, and any professional guidance or general practise there may be (Saif Ali v Sydney Mitchell & Co. [1980] AC 198).

The solicitors in the Burke case and counsel in the Williams case got off lightly as there was no loss proven. The foreseeability test having been satisfied.

It is, however, difficult to reconcile the idea that the negligence found proven (that counsel should have informed the wife that the decision in White was pending and later,  what the decision meant) had not also attached to the failure on the part of counsel to advise the wife to suspend negotiations or even to advise to continue without waiting. Surely it is counsel's duty to give advice on the law and its effects on the client's case. In Williams, didn't that duty extend to actually advising on the best way forward for the client i.e. suspending negotiations, even if the client refuses to take on the board the advice and does something else. The judgment of the House of Lords, if memory serves me right, was eagerly awaited by the entire bar. Was it going to be half/half or not I seem to remember? The judgment having been sent down, it changed the outlook of practitioners throughout the land. That being so, how can the courts condone ignoring it, when in the midst of negotiating a settlement. Coleridge refused to give judgment in Charman until a similarly groundbreaking appeal was heard by the Lords in Miller. Thorpe LJ refused to give judgment in another case until after White was decided.

It seems that luck as much as anything prevented counsel from being further penalised in Williams. The overall tenor of the judgment is one of the wife being ultimately unreliable with her own agenda. One wonders had she not been whether the court could reasonably say that a reasonable and competent counsel or solicitor be allowed to not offer practical advice in the light of the decisions of the House of Lords, in a particular case. How is that crossing over to an error of judgment a la Saif Ali? Is this not a licence to ignore their Lordships?

Keeping up to date is an essential tool in the bar's armoury in facing the challenges mounted by the government's determination to eradicate the bar. Look no further then Family Law to avoid stinging criticism and case reports about your own cases. But it does seem illogical having satisfied yourself that you do know what the state of the law is then you need not implement its effects by offering practical solutions in your own cases.

(c) Paul Pavlou 2009