Court of Appeal orders retrial over Bevan Ashford ‘negligence’ case
A case concerning the standard of advice expected from a newly qualified solicitor in a brief, free, consultation with a distressed client is set for a retrial following an appeal court decision.
In Padden v Bevan Ashford, the Court of Appeal overruled a trial judge’s decision last year to throw out a negligence claim against a south-west law firm on the grounds that it would have imposed a ‘wholly unreasonable standard of care’ on solicitors giving free advice to clients who walk in off the street.
In 2003, Heather Padden learned that her husband was a fraudster who owed £200,000. She was told by his solicitor that the only way to save her children from seeing their father go to prison was to sign over her interest in the house, so that he could repay the money.
The solicitor told Padden to seek independent legal advice ‘for the sake of formality’, but to ignore any advice not to sign.
In a distressed state, Padden was turned away by two solicitors before Rebecca Shinner, a newly qualified solicitor at what was then Bevan Ashford in Tiverton, agreed to see her. During a meeting lasting no more than 15 minutes, Padden outlined her situation and Shinner advised her not to sign. When Padden said she still intended to do so, Shinner commented: ‘I hope your husband is worth it’.
Shinner did not charge Padden for the session.
A few weeks later, Padden took the relevant documents to Bevan Ashford’s Exeter office, where partner Gary Mackay witnessed their signature and certified that the consequences had been explained.
Padden subsequently sued Bevan Ashford, claiming it had failed to advise her properly. The trial judge threw out the claim after the first day of her evidence, finding that she had not established any breach of duty by the law firm. He said that to ‘foist’ a duty to give full advice ‘on a solicitor who simply agreed to see someone off the street without an appointment [is] an absurdity’. To expect Ms Shinner to do more, in a short, free session, than to tell Padden not to sign, would ‘impose a wholly unreasonable standard of care on the solicitor’.
But in the Court of Appeal last month, Master of the Rolls Lord Neuberger found the trial judge had been wrong to ‘write off’ Bevan Ashford’s role at the second meeting, and had been ‘overimpressed’ by the fact that Padden’s consultation with Shinner was short and free of charge.
Neuberger said solicitors in such circumstances were under a duty to advise that a short consultation was inappropriate, and further investigation was needed. He said Padden might well have chosen not to proceed had she learned that in reality her husband, who was sentenced to five years’ imprisonment in 2005 for obtaining £2m by deception, was unlikely to avoid incarceration.
The case has been remitted to Bristol District Registry for retrial.
Bevan Ashford demerged in 2004 to form two firms, Ashfords and Bevan Brittan. Ashfords is acting as solicitors to Bevan Ashford in defending the claim; Bevan Brittan has no involvement in the case.
Read Rachel Rothwell's blog on the case.
Comments
damned if we do and damned if
damned if we do and damned if we don't - this young solicitor did nothing wrong.
Another case where judges
Another case where judges consider solicitors to be wrong no matter what.
Of course solicitors should not "help" people where they are not paying-barristers never do.
That's the end of free advice
That's the end of free advice then
Of course, had the person
Of course, had the person giving the advice not been a solicitor, there would have been no point in taking action, because there would have been no insurance policy to cover it.
Another reason why legal advice should be delivered by a limited company acting as "legal advisers"-when there is a problem the company just goes bust. Under current legislation this is entirely possible-and indeed preferable.
I personally cannot see what
I personally cannot see what the firm did wrong in respect of the advice that was provided to Mrs P. Let us remember that the re-trial is based on the court of first instance 'getting it wrong'. The judge at the first hearing applied the wrong test and summarily dismissed the case, not at all helping Bevan Ashford's case.
No decision in respect of the alleged negligence has been made.
Here's hoping for some common sense in the re-trial and the correct application of the test as to what the true extent of a solicitor's duty of care is in these circumstances.
p.s. I don't work for Bevan Ashford - truely impartial view being expressed.
I don't pretend to know the
I don't pretend to know the real detail of this case but it does seem, on the face of it, that it would be extremely unfair if the retrial were to find negligence.
Details
If you want the details, read the judgment: http://www.bailii.org/cgi-bin/markup.cgi?doc=/ew/cases/EWCA/Civ/2011/161....
The decision of the first instance judge was obviously unsatisfactory and the appeal was correctly allowed. No finding of negligence has yet been made.
at para 51 of the judgement
at para 51 of the judgement the judge assumes that because the claimant was not told until the end of the short meeting with the trainee that there was no charge for the first half hour she would have assumed that she would be paying. What planet is he on? If we did not tell someone to expect a charge in advance of a meeting, especially a short initial chat, there is no doubt that LeO would say the potential client had every right to assume it would be free and we could not justify any charge!
One has to feel some sympathy for the firm, who did not make a penny out of the claimant, and are now facing a protracted claim and huge costs. The moral of the story is never, ever try and help a distressed potential client, who turns up off the street demanding to see a solicitor immediately, with a bit of quick free advice and a 'one off' letter (which clients so often wonder why you can't just do and charge a few quid for).
IMO the firm made two foolhardy errors; the first was that the trainee sent a letter from the firm on behalf of the claimant, purporting that she had been advised on and consented to the transfer of assets (when in reality she had not even formally instructed the firm or put them in funds to enable them to consider the matter properly and provide her with adequate advice). Secondly, the partner witnessed documents containing an attestation that the claimant had been advised and understood the implications when he could not have known this, as he had not advised her himself, was presumably unaware of the trainee's (inadequate) involvement, and simply accepted the husband's assertion that she had been seen by another solicitor without knowing what such solicitor had advised.
The trainee should have advised the claimant not only that she could not do more than say ‘do not sign’ in a 5/10 minute cursory look at documents / chat in reception but that it was necessary to make an appointment to come in for a longer meeting and then, if she wished the firm to do any formal work for her such as sending letters, she must formally instruct them and receive terms of business plus confirmation of instructions and advice in writing beforehand. If the claimant insisted that she did not have / refused to take the time to do that, then she should have been told that the firm could not help her. The same with the partner, who should have said he could not witness documents containing an attestation that the claimant had been advised, without taking the time to see her on her own and advise her / discuss what advice she had apparently received elsewhere; again, something which would take a bit of time and therefore require a formal retainer, payment and file record. At the very least, a retainer and file should have been set up to record in writing, by way of a disclaimer signed by the claimant, that she had been advised against proceeding without further consideration in order to enable proper advice to be given, but wished to proceed anyway, and these circumstances could also then have been explained in the letter to the other side, so that they would have been proceeding in the knowledge that the claimant had not in fact had satisfactory advice. Again, if the claimant wasn't prepared to pay for this service, the firm should have declined to do anything.
We all get people turning up in reception like this, waving documents and demanding immediate attention, but it is in their interests, and the firm's, to insist on a proper meeting and consideration of the matter. The reality is that this costs money, which no-one wants to pay! The trial judge was right to say that it would be absurd to foist a duty of care on a solicitor to advise beyond 'do not sign' in a free 5/10 minute off the cuff chat with someone off the street. However, any reasonable solicitor would also stress that a fuller appointment was needed. There appears to be no evidence (so far) that the trainee recommended this. She may have done so, the claimant declined, and then the trainee prepared a badly worded letter.
It’s interesting to note elsewhere in The Gazette this week the suggestion that firms charge £7 for 5 mins of advice to help address the loss of legal aid. This is the crux of the problem; legal work is rarely that simple. People want their legal problems sorted out immediately and cheaply but also properly. All understandable but in terms of their expectations as to just how quickly and cheaply a PROPER job can be done, they are all too often woefully unrealistic these days. If the claimant in this case had been charged £7 for 5 mins of advice in which the solicitor simply said 'all I can say in 5 mins is do not sign, we actually need at least a couple of hours or so to advise you more fully and deal with documents, say £200 or so' she would have probably have complained that she was charged £7 for nothing! If you're going to charge anything at all you surely have to set up a retainer with terms and a CCL etc - hardly worth it for £7!
In fact, this case suggests that you might need to do all that even where you are not charging anything if you are going to so much as glance at a document a potential client brings in. It really makes me wonder whether I should continue to give free advice at the law centre once a month. In any case, I am certainly going to remind all my staff that they are not to give any whatsoever to potential clients of our firm without arranging a proper consultation with first, or if it really is an emergency, insisting they read a copy of our pre free consultation letter in reception prior to speaking with the solicitor. That way they should always receive it, and I am now going to make sure that the letter disclaims any liability for reliance on advice given in a free initial meeting before formal instructions are accepted and advice recorded in writing!
Yes
All good points. But I doubt that the SRA (or the courts) would stand for a letter which disclaimed any liability for reliance on advice given in a free initial meeting. Aside from anything else, that would be a breach of Outcome 1.8: you cannot exclude or limit your liability to your client to less than £2 million, that being the minimum level of compulsory insurance cover. According to Chapter 14 of the Code of Conduct, "client" means the person for whom you act and includes former and prospective clients. If you're giving advice to someone, whether during a free initial consultation of for £1,000 an hour, that person is a client.
So, if you haven't got enough information to give advice with confidence, don't give any advice; or give the advice through a Law Centre, so that any resulting claim falls to be dealt with under the Law Centre's professional indemnity insurance policy.
the death of the free half hour?
Thank you to Anonymous on Sun, 22/01/2012 - 04:13 for some important and concerning points in response to my earlier post. I will have to rethink the disclaimer idea and indeed whether we should continue to offer any initial free meeting at all. One does wonder how a 'prospective client' and a 'client' are to be distinguished, as it seems the regs define them as the same thing. So many firms currently offer free initial meetings to attract formal instructions and I can't really see this practice going, despite this case highlighting the risks, although the cost of doing so may start to become disproportionate.
I also wonder what effect it might have in the new more competitive and accessible ABS market we've been told to expect, with initial free drop in / telephone advice etc, presumably being given out by cheaper unqualified / inexperienced staff touting for the real business. The claim is so often bandied about that a lot of legal work is simple stuff, form filling and box ticking that cheap unqualified staff can do in order to drive down the cost to the consumer. Some stuff maybe, generally the stuff that most existing firms already delegate. Often, though, knowing which box to tick actually requires a detailed consideration of circumstances, knowledge of the law and appropriate application of it. If a prospective client can have a free initial chat with a junior / inexperienced employee in a shopping centre outlet and without ever going on to instruct formally and become a 'real' client, subsequently sue for allegedly negligent advice given because we cannot disclaim liability for this part of the process, then unless the firm is willing to run the risk, the initial advice is going to have to be given by someone who knows their stuff, and in addition a detailed record will now need to be kept, in order to guard against expensive claims which would drive up the cost of offering the advice in the first place! Of course, this all adds cost to the process, and there we are, back to the point that doing a job properly requires time, care and attention and knowledge gained through qualifications and experience and concentration on quality not quantity of cases (speculation, but the latter being perhaps why the partner in the case signed in haste without due consideration?). The problem in this case arose through mistakes on the part of both an inexperienced trainee (or just qualified I think), and an experienced partner, probably because the client was not paying anything and they rushed things and failed to appreciate that something which seemed simple on the surface was actually much more complex. If legally qualified people can make such mistakes, how much more frequent are such cases likely to occur when swathes of unqualified and inexperienced staff hit the scene?
I decided years ago that
I decided years ago that these one-off bits of advice for clients about mortgages etc. on their homes was simply not worth the risk.
I totally point blank refuse to even talk to anyone who wants advice about "signing" any such legal document - Joe Public never wants to pay a fee for this, is usually 100% urgent and hassle, and then he/she or their lender would sue the pants off you.
ANY LAWYER GIVING EVEN AGREEING TO SEE A CLIENT IN THIS TYPE OF SITUATION IS PLAIN BARKING MAD!!!!!
"Client"
You could invite the SRA to issue some guidance on what "client" means, though I suspect that they will say that it means precisely what Chapter 14 says: current client, former client or prospective client. In any event, anyone to whom you give advice (free or otherwise) is obviously owed a duty of care (whether or contractual or tortious) and I would think that the chances of a court holding that a disclaimer is effective to negative that duty (or any alleged reliance upon that advice) are minimal (not least because the court will know that you have professional indemnity insurance). The Bevan Ashford case amply illustrates the risks: even if the case against them is dismissed at a re-trial, they will have spent a lot of time and energy defending it.
Bear in mind also that the Provision of Services Regulations 2009 require solicitors (and some others) to make available to clients information about their professional indemnity insurance (including the contact details of the insurer). This obligation does not depend upon the client intimating any claim against you: Regulation 11(b) requires the information to be made available or supplied in good time before the conclusion of the contract with the client (or, where there is no written contract with the client, before the service is provided). Here is the Society's Practice Note on the Regulations:
http://www.lawsociety.org.uk/productsandservices/practicenotes/servicesr....
Thank you to Anonymous on
Thank you to Anonymous on Mon, 23/01/2012 - 03:13 for helpful comment. My own firm's pre appointment letter provides details of our PII. I appreciate that one cannot disclaim liability for negligent advice, however, could some sort of provision not be included in a pre appointment letter to at least try to address the issue raised in the Bevan Ashford case of the trainee/NQ allegedly not stressing to the claimant that a short initial meeting would be insufficient to gather enough information and explore matters adequately, such that any initial advice given pre formal instructions would be qualified accordingly. This would only have helped BA if such a letter had in fact been given to the claimant in advance of her 'off the cuff drop in' meeting with the claimant but if they had had a policy of insisting that all enquiring clients are required to read such letter before even a 5 minute chat in reception (which is obviously to be avoided in any event), then at least that should have helped discharge that duty as identified by the Judge.
Never try to help
No good deed goes unpunished
Pre-appointment letter
I think the problem with such a letter is that it would not be tailored to the particular circumstances: in effect, it would be assuming that you would not receive (during the short meeting) enough information to enable proper advice to be given. If the letter were on correct on that point, surely you should not be venturing any advice any at all? And, if the letter were wrong on that point, on what basis could you claim that it covered the situation and that you should be entitled to rely on it? See paragraph 48 of the judgment in Padden v Bevan Ashford.
I do agree that it is prudent to make clear to "drop-in" clients that there is a limit to the usefulness of any views which you can express without a full picture of the relevant situation, but I do wonder how far that is going to get you if the client later sues you for giving wrong or inadequate advice. The answer, I suspect, is not very far at all. The safer course would be probably be to follow up the meeting by writing to the client to identify the areas where you need further information in order to provide advice upon which he/she may rely.
I would add that it seems to me that these are precisely the sorts of practical questions on which the Law Society should be issuing advice and guidance to practitioners.
Let this be a warning...
of things to come from the "consumers" who were once "clients" especially in recessionary times. She was advised NOT to sign! What can be plainer than that? Lessons learnt - never give free or brief advice to a distressed client. Best to say that you cannot deal with the matter in a short period of time and ask the client to come back for a longer appointment and payment on account after all ML enquiries have been undertaken. If they refuse, simply refuse to act. It's not worth the aggravation. As we have been hounded time and again about improving the quality of our client care, equally we should take on our clients with care and think of ourselves first and the unforseen risks involved. I sincerely hope that common sense prevails at the re-trial. Good luck to Bevan Ashord.
Let's not get carried away
I hope Bevan Ashford do win the case at the re-trial. But the real point of the Court of Appeal was not that "we think Bevan Ashford were definitely / almost / possibly / certainly negligent". The point was that the trial judge stopped the case too early, and jumped to conclusions that seem on the face of it to be incorrect.
There is more to this - much more - than meets the eye, and I'm afraid that's obvious when you read the judgment.
If the newly qualified young solicitor really did give free, off-the-cuff advice on the 28th April over 5 minutes without an appointment:-
1) Why was she also writing and faxing letters to third party solicitors based on that advice three days later on the 1st May?
2) Why did those letters go beyond stating that advice had been given, but say that the "transaction should be completed as quickly as possible"?
3) How did the same client come to visit again, nine days after that, on the 10th May, and meet a partner? Was that again without an appointment?
4) How did Bevan Ashford's name get put into the mortgage documentation and deeds / certificates which were drawn up?
5) Why did the partner in the firm sign a certificate which stated that the claimant had NOT just had a five minute appointment with a young newly qual., but had been given thorough and detailed legal advice and understood the nature and effects of the transactions?
6) Why did the partner in the firm ask the client if she wanted legal advice?
7) Why did the partner in the firm accept it when a third party (the client's husband) told the partner that the client did not need to be advised?
8) Why would any firm undertake all of the above free of charge?
Of course none of the above in any way whatsoever makes out a case of negligence, but there are questions to be asked. I often give free "off the cuff" type advice to people who come in - usually when it simply isn't worth it trying to set them up as a client, client care them, etc. There is no way on this planet that I would then go on write letters free of charge, make a further appointment free of charge, certify mortgage deeds free of charge, agree to my firm being named in those deeds free of charge, sign a certificate to say I had given legal advice free of charge, offer to give that legal advice free of charge.
I suspect that I am not alone in that.