Solicitors are at risk

Solicitors and other professionals could face the risk of being sued directly for negligence by their clients rather than firms bearing the brunt of claims...Solicitors and other professionals could face the risk of being sued directly for negligence by their clients rather than firms bearing the brunt of claims, following a landmark case earlier this month.

In Merrett v Babb earlier this month, the Court of Appeal ruled that a chartered surveyor, John Babb, was personally liable for a mortgage valuation he had carried out more than seven years earlier.

The ruling will impact upon all professions such as assistant and associate solicitors who give specialist advice to clients on behalf of their employers.

Employees will be especially vulnerable where firms have stopped trading and have no run-off, are under-insured and cannot meet full claims, are unable to pay excesses due under an insurance policy following a negligence action, or are unable to obtain indemnity under their insurance policies because of disputes with their insurers.

Peter Maguire, a partner at City firm CMS Cameron McKenna who acted for Mr Babb and the Royal Institute of Chartered Surveyors (RICS) which sponsored the action said: The remuneration which employees receive is not commensurate with the risk of attracting a personal liability, and such an exposure is unlikely to have been contemplated by them.

A petition has been lodged at the House of Lords.John Armstrong, chief executive of the RICS said: The RICS has many members working in small practices who might be similarly at risk.

We believe that it is in the public interest for the issues to be considered by the House of Lords.

Many other professions could be affected by the Court of Appeals decision and are therefore supporting an appeal.Jeremy Fleming