Solicitor – professional negligence – Duty of care – Claimant instructing defendant firm of solicitors in conveyancing transaction – Defendant instructed to investigate title to property including all necessary planning consents – Claimant purchasing property without planning consents to park HGV lorries to rear – Claimant suing defendant for loss and damage resulting from professional negligence – Whether defendant acting in breach of duty – Whether any breach of duty resulting in loss to claimant – Claim allowed in part
In 2005, the claimant engaged the defendant firm of solicitors to act on its behalf in connection with its purchase of a property known as Packhorse Place in Bedford. The defendant was instructed to investigate the title to the property to ensure that all necessary planning consents were in place and/or that the title to the property was otherwise free from encumbrances. After the claimant completed the conveyance in November 2005, it was discovered that the property did not have the necessary planning consents permitting it to park HGV lorries on an area to the rear of the property.
The claimant brought an action against the defendant alleging professional negligence, namely, breach of contract, negligence and/or breach of fiduciary duty. The claimant contended that, had it known of the restriction, it would not have gone ahead with the purchase. It claimed that, in reliance on the defendant’s advice, it had exchanged contracts and completed the purchase with the result that it had suffered loss and damage, including diminution in the value of the property. The defendant denied that it was in breach of duty and argued that the claimant would have gone ahead with the purchase in any event.
The main issues for the court were whether the defendant had been in breach of duty and, if so, whether that breach had given rise to any loss to the claimant. The claimant did not suggest that the defendant was under a duty to provide detailed planning advice but said that it was under a duty to inform the claimant of the planning position to enable the claimant to seek specialist advice if necessary.
Held: The claim was allowed in part.
A solicitor owed his client a duty of care in both contract and in negligence to exercise reasonable skill, care and diligence in relation to the work he undertook. The extent of a solicitor’s responsibilities was derived from his retainer. He was under no general obligation to expend time and effort on issues outside the scope of that retainer but if, in the course of doing that for which he was retained, a solicitor became aware of a risk, or a potential risk, to his client which it was reasonable to assume the client did not know about it was the solicitor’s duty to inform the client.
The standard expected of a solicitor in the performance of that duty was to be assessed against the reasonably competent practitioner having regard to the standards normally adopted in his profession. A solicitor who did not follow the guidance contained within the Law Society’s Conveyancing Handbook, in particular, paragraphs 24.3.2, 24.3.3, and 24.3.4 of the 12th edition (published in 2004), was not exercising reasonable care. It was no excuse for a solicitor to say that he did not know his client’s intentions as it was up to him to find out. It was the duty of a solicitor to ask the client appropriate questions designed to ensure that the solicitor was aware of the client’s relevant circumstances and intentions, and that the client had all the relevant information and understood the legal consequences: County Personnel Ltd v Alan R Pulver & Co Ltd [1986] 2 EGLR 246 and Credit Lyonnais SA v Russell Jones & Walker [2002] EWHC 1310 (Ch); [2002] 2 EGLR 65; [2002] 33 EG 99 considered.
In the present case, the defendant owed the claimant a duty of care to investigate the title of the property and, in particular, to investigate the planning position. The claimant had not suggested that the defendant was under a duty to provide detailed planning advice; merely that his duty was to inform the claimant of the planning position so that the claimant could seek specialist advice if necessary. On the facts, the defendant was in breach of duty in failing to give proper advice as to the planning status of the property.
However, the full position with regard to the status of the property for planning purposes had not emerged until the end of September 2005 when the full significance of the need for planning consent for haulage, for vehicle repairs, and for HGV contract parking should have been apparent to the defendant. By that time, the claimant was already too committed to the purchase, and also under too much pressure of time to deliver vacant possession of its other premises, to have backed out of the purchase. On the balance of probabilities, that it would not have done so. Accordingly, the claimant succeeded on breach of duty but failed on causation.
Geraint Jones and Laura McGinty (instructed by Direct Access) appeared for the claimant; Neil Hext (instructed by Bond Dickinson, of Bristol) appeared for the defendants.
Eileen O’Grady, barrister
