Ombudsman's casebook

A monthly column of examples from the Legal Services Ombudsman casebook

From time to time, solicitors run into trouble and are either unable or unsuitable to continue in practice.

The consequences for clients are serious, and in some cases the circumstances surrounding these events can be quite unusual, as the following recent cases illustrate.

Double trouble

Ms S and her brother were the main beneficiaries of their uncle's will.

The executors were a solicitor and Ms S's mother.

Ms S's mother instructed the solicitor executor to transfer the estate proceeds to her own solicitors, T & Co.

Before T & Co completed distribution of the monies, the senior partner was declared bankrupt and the practice was then taken over by U & Co.

U & Co claimed to be under a duty to collect fees owed to T & Co and, unless these were paid, it refused to release the estate monies as well as wills, pension and insurance policies and deeds relating to a family trust.

Eighteen months passed without progress, and in the meantime Ms S's mother died.

Ms S complained to the OSS about U & Co's stance.

After a brief investigation, the OSS decided that the solicitors were correct to exercise a lien on the monies and documents.

It said that Ms S's mother had been notified by U & Co of its takeover, but the OSS said that the solicitors were not under a duty to notify Ms S or her brother of the change, as they were not the clients of the solicitors.

While the ombudsman was investigating Ms S's complaint about the OSS's decision, it became apparent that all was not well at the firm of U & Co.

In fact, the senior partner at the firm had been declared bankrupt, its offices abandoned and vandalised, and the Society had intervened in the practice.

There was no sign of the estate monies, nor of the disputed documents.

The ombudsman decided that the OSS's decision on the service aspects of Ms S's complaint was reasonable, as she and her brother were not the solicitors' client, but that it had failed to investigate the conduct aspects of her complaint.

Accordingly, the ombudsman recommended that the OSS reconsider.

Chasing rainbows

Mr & Mrs A's relatives purchased a house in the late 1950s and, in 1994, ownership was transferred to Mr A and his brother.

The firm of B & Co acted for the family throughout and it also stored the title deeds for safe keeping.

Unfortunately, in 1996, following the death of the firm's sole practitioner, the practice was intervened in by the Law Society.

In 1997, Mr A decided to sell the house and Mr & Mrs A contacted the Society and its intervention agents C & Co to ask about the deeds.

The news was not good.

According to C & Co and the Society, the deeds were destroyed when the cellar in which they were stored was flooded.

However, the Society advised that a new firm of solicitors should be appointed to reconstitute the title and the costs would be paid by the Solicitors' Compensation Fund.

D & Co were duly instructed by Mr & Mrs A.

The solicitors set to work on the problem.

Unfortunately, after two years and three attempts at recreating the title to the property, the best they could achieve was a possessory title.

By this time, a buyer had been found for the house, but his solicitor was not prepared to accept the poor substitute for absolute title.

So, the buyer's solicitor made his own enquiries about the fate of the deeds.

In a matter of days, the buyer's solicitor found that the original deeds had not been consigned to a watery grave in the cellars of B & Co.

In fact, they were deposited with another firm of solicitors which practised in the same building as the intervention agents, C & Co.

The Office for the Supervision of Solicitors (OSS) received a complaint from Mrs A that D & Co's work had been negligent and shoddy and this had resulted in stress and inconvenience, as well as the loss of an earlier sale.

Eventually, a report on the service provided by D & Co was put to an adjudicator.

One of the issues the adjudicator was asked to consider was the apparent ease with which the original title deeds had been found by the buyer's solicitor.

The adjudicator said that D & Co had made what enquiries it could and 'that there was little point chasing rainbows' - it was merely good fortune that the deeds had turned up.

The adjudicator decided that the OSS could not interfere with the solicitors' judgement about what action to take to trace the deeds.

However, he found that the solicitors had provided an inadequate service in that they had delayed and had used an incorrect Land Registry form.

The ombudsman decided that the adjudicator had made wrong assumptions about the lengths to which D & Co had gone in its quest for the deeds.

In fact, the solicitors had not made enquiries of the intervention agents, nor of the Society, as the adjudicator thought.

The ombudsman concluded that far from 'chasing rainbows', the buyer's solicitor had made sensible enquiries and, in less than a week, had found not an unlikely pot of gold at the end of the rainbow but the original title deeds.

The ombudsman recommended that the OSS reconsider the complaint.