Conduct and service

When is an undertaking not an undertaking?Allegations of breaches of undertaking or failure to comply with the terms of undertakings which have been given frequently cause problems, both for the profession and the Office for the Supervision of Solicitors (OSS).

When giving or accepting an undertaking, great care should be taken not only with its precise wording, but also in ensuring that it can be fulfilled by the donor without relying on action by someone else - especially someone over whom the donor has no control.It should always be borne in mind that not only is failure to comply with an undertaking a matter of professional misconduct, but, when it is given by an employee on behalf of the firm, it is also binding personally on any and all of the firm's partners.

In a case considered by the compliance & supervision committee, M had been contracted by D to do work in connection with a house that D was building and intended to offer for sale.

D had failed to pay M, who eventually instructed GHI & Co to chase payment of the outstanding monies.

Negotiations took place between GHI & Co and D's solicitors, who were also acting in the sale of the property.

The negotiations resulted in D's solicitors offering an undertaking to pay the money owed by D from the final stage payment of the sale monies upon its receipt from the purchaser's solicitors.

By that time, only the final payment remained outstanding.In the event, because of alleged construction defects (which were nothing to do with the work done by M), the final stage payment was never made.

When D's solicitors failed to respond to enquiries from GHI & Co about payment.

GHI & Co then complained to the OSS alleging a breach of undertaking by D's solicitors, who, in response, maintained that the undertaking was conditional upon their receiving the final stage payment, which they had never received.

The compliance & supervision committee agreed that the undertaking was conditional, but in the circumstances decided that the solicitors should have told GHI & Co that the monies had not been received, and rebuked them for the failure to do so.

l Every case before the compliance and supervision committee is decided on its individual facts.

These case studies are for illustration only and should not be treated as precedents.