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Solicitors: Beneficiaries’ rights – breach of duty of care

Studholm Feltham v Freer Bouskell
15 July 2013
High Court (ChD)

In this case, the Claimant brought a negligence action against the Defendant firm of solicitors under the principle set out by the House of Lords in White v Jones back in 1995.  Helen Smith reviews the judgment which raises some interesting points regarding a solicitor’s liability and how a Court evaluates loss in such circumstances.

Facts

The Claimant’s step-grandmother, Hazel Charlton, had instructed the Defendant since 1990 and the Defendant had drafted several wills on Ms Charlton’s behalf during this period. In all of Ms Charlton’s previous wills the Claimant was not the intended beneficiary. In January 2006 the Claimant telephoned the Defendant and instructed the Defendant, on Ms Charlton’s behalf, to prepare Ms Charlton’s new will. The Claimant and the Defendant had not spoken previously. By this time, Ms Charlton was now living in a nursing home. Under the new will it was proposed that the Claimant would inherit the majority of Ms Charlton’s estate in lieu of the beneficiaries named in Ms Charlton’s previous wills. Shortly after, the Defendant accepted the instructions, on the basis that Ms Charlton’s testamentary capacity would have to be established first.

In order to confirm Ms Charlton’s testamentary capacity, the Defendant instructed a doctor to provide a report on this issue. The doctor saw Ms Charlton in early February 2006 and assessed that she did have testamentary capacity. The doctor did not provide his report to the Defendant until early March, by which time the Defendant had spoken twice to Ms Charlton, regarding matters other than her new will. At trial the Defendant gave evidence that he had concerns that the Claimant was trying to take advantage of Ms Charlton and decided not to proceed with the instructions to prepare a new will, unless Ms Charlton raised the issue. By 13 March 2006 the Defendant had not prepared the new will and, as a result, Ms Charlton asked the Claimant to draft the new will instead. The new will was drafted by the Claimant and signed by Ms Charlton on 24 March 2006. Ms Charlton died the following month.

Following Ms Charlton’s death, the Defendant wrote to the beneficiaries of Ms Charlton’s previous wills and, in effect, encouraged them to challenge the new will. Such a challenge was made and a settlement was reached between the previously intended beneficiaries and the Claimant. As a result, the Claimant brought a claim in negligence against the Defendant for damages to include the Claimant’s settlement monies paid out to the previously intended beneficiaries and her legal costs of defending the challenge.

Findings

In line with previous authority, Mr Charles Hollander QC held that the Defendant was negligent in failing to carry out the instructions to prepare the new will promptly, particularly when there may be an issue as to Ms Charlton’s testamentary capacity. Whilst the Defendant may have had genuine concerns regarding the Claimant’s intentions, it was not adequate to do nothing, save if Ms Charlton informed him to draft the new will. The Defendant should have contacted the doctor to ask that he provide his report earlier and made an appointment with Ms Charlton to discuss the new will and her instructions. Had the Defendant carried out the instructions, the Defendant would not have written to the previous beneficiaries and the challenge to the new will was likely not to have been made. The Claimant was therefore awarded a substantial sum in damages in respect of her loss as a result of the settlement with the previous beneficiaries, plus her legal costs in relation to the challenge to the new will.

Interestingly, there was no previous authority regarding the issue as to how to evaluate the Claimant’s loss in this White v Jones scenario and Mr Charles Hollander QC commented that this may be an area for the Court of Appeal to consider in due course. Mr Charles Hollander QC considered this issue with reference to the principles set out by Stuart-Smith LJ in Allied Maples Group Limited v Simmons & Simmons (1995) which held that the assessment of the question as to what a third party would have done should be assessed in percentage terms. Mr Charles Hollander QC considered that it was appropriate to treat the testator as a third party and evaluate what the testator would have done, but for the Defendant’s negligence, in percentage terms. Moreover, he was satisfied in this case that no percentage reduction was justified.

Comment

  • The decision of Mr Charles Hollander QC was perhaps unsurprising on the facts of this case and it emphasises a solicitors‟ duty in such circumstances to carry out instructions promptly and, where there is an issue as to a testator’s mental capacity, to gather all relevant information to assess the position on an expedited basis.
  • In respect of the evaluation of the Claimant’s loss, it will be interesting to see whether this does become an issue to be considered by the Court of Appeal in the future and whether they will follow Mr Charles Hollander QC‟s approach in similar circumstances.

Contact

For further information please contact Helen Smith, Associate, DWF Fishburns on 020 7220 5235

By Helen Smith

This information is intended as a general discussion surrounding the topics covered and is for guidance purposes only. It does not constitute legal advice and should not be regarded as a substitute for taking legal advice. DWF is not responsible for any activity undertaken based on this information.

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