The House of Lords has overturned an Appeal Court decision dismissing a negligence action against a solicitor in relation to a property transaction.
The Law Lords, headed by Lord Bingham, allowed an appeal by William Johnson, the director of a property development company whose action against solicitor Gore Wood & Co was struck out as an abuse of process.
Mr Johnson instructed Gore Wood on behalf of one of his companies, Westway Homes Ltd, in connection with the proposed purchase of land at Burseldon in Hampshire. The company had planned to develop the land, but the project was complicated by the fact that the title to the land was to some extent doubtful and access to the land was dependent upon acquisition of a strip of land owned by a third party.
Westway claimed that it suffered substantial loss on the deal as a result of advice given by Gore Wood, and sued the solicitor for damages. The action was compromised, and Gore Wood paid Westway £1,480,000 and costs of £320,000.
However, Johnson claimed that because he had retained Gore Wood to advise and act for him personally as well as for his company, the firm also owed him a duty of care. He claimed that duty had been breached and launched a personal claim against the solicitor.
The High Court upheld his right to bring that action, but the decision was reversed by the Appeal Court. Now the Law Lords have unanimously allowed Johnsons appeal against that decision, although they also ruled that he should not be allowed to claim damages for several items, including pension payments and mental distress and anxiety.
PLS News 18/12/00
