Description
In proceedings against a firm of solicitors it was alleged that the solicitors had failed properly to advise the Claimant in respect of a transaction where she effectively lost the interest in her home and certain endowment policies, shares and pensions. When her husband had been accused of obtaining money be deception from a third party, she was told their house and savings would need to be sold to save him from prison. Her husband's solicitor prepared draft documents recording her agreement to give up her interest in the house and savings. She sought advice from the Defendant where she was advised to proceed with the transaction following a short meeting. At a subsequent meeting she and her husband provided the solicitors with a mortgage, charges over certain shares and a deed in favour of the third party. One of the defendant's partners witnessed her signature on the document and certified that it had been explained to her and she understood them. Her evidence was that she had received no advice at all. H er husband was subsequently convicted and she began divorce proceedings. When her husband died, the third party enforced her rights under the mortgage and the property was sold. The Claimant brought proceedings alleging a failure to advise her properly. During the trial of the claim, the judge heard evidence from the Claimant and then stopped the trial finding that there was no case for the solicitors to answer. On appeal the Court of Appeal emphasised the importance of the observations of Lord Nicholls in Royal Bank of Scotland v Etridge (No 2) as a very good guide to the appropriate approach where an individual sought advice from a solicitor about an intended provision of security for the sole financial benefit of someone else in a close personal relationship with them, subject of course to the fact of each case. The purpose of a solicitor giving advice was not simply to protect the client, but also so that the other parties could rely on his involvement to counter any subsequent set-aside application. Eve n though a meeting was short and free of charge it did not divest the solicitors of his duty to ensure that the client understood the effect of the documentation and was free of undue influence or misrepresentation. In the circumstances of the case, the solicitor should have advised the Claimant to investigate the possible implications of the criminal proceedings further. Active case management of the sort taken by the judge was appropriate in some cases. However it was a high-risk course that was only to be taken in a very clear case.
