In the context of solicitors negligence claims, how important is a breach of the Solicitor's Code of Conduct and will a solicitor be negligent if they fail to comply?

Solicitors negligence claims specialist, Emma Slade, is frequently asked, 'can i sue my solicitor for breach of the Solicitor's Code of Conduct?'. In this short article she considers whether failure to comply with the Solicitors Code of Conduct is tantamount to a negligent act.

The historic position - breach of the Code was not sufficient in itself

It has long been established that to bring a negligence claim against a solicitor, you have to show that the solicitor acted in a way that no reasonably competent solicitor with similar qualifications and experience would have done.  It’s known as the Bolam test.  But how do you establish how a reasonably competent solicitor would have acted?

As readers will probably be aware, solicitors are governed by the Solicitors Regulation Authority who regularly update the “Solicitor’s Code of Conduct” – a guide to professional conduct within the profession.  The current edition is 2011 although there have been earlier ones, its predecessor being in 2007.  A leading judge has stated that the guide, “embraces the conduct expected of a normally careful and skilful solicitor by his or her own governing body.”

It is probably a surprise therefore to read that the judge went on to say, “I have, however, come to the conclusion that a breach of the Guide cannot ipso facto and of necessity be negligent.”

The facts in that case were rather distressing.  The Claimant brought proceedings via her daughter [G], against her former solicitors.  Mrs Johnson had been a longstanding client of the firm and so they knew her and her family very well.  Unfortunately, Mrs Johnson’s mental capacities deteriorated quite rapidly, unbeknownst to G.  When G did find out, she also found out that all her mother’s savings and capital had been dissipated by her younger brother [A] in pursuit of “a secret and expensive indulgence, which, by its very nature… was too embarrassing for [G] to discuss.”  The solicitors were immediately contacted by G and A to obtain an Enduring Power of Attorney for their mother where Mrs Johnson’s mental capacity was discussed.

The first act complained of by the Claimant was that the solicitors – in breach of one of the fundamental principles of the Guide to Professional Conduct for Solicitors (as it then was) – did not check for themselves that Mrs Johnson had capacity to either instruct that such a document be prepared, that she had capacity to understand and sign such a document or check that it was validly executed.

The second act complained of was that subsequently, the solicitors accepted the brother’s instructions to sell some valuable land that belonged to Mrs Johnson.  Although the brother produced the signed Attorney, the solicitors failed to notice that the document made it clear that any decision had to be made jointly with his sister and happily accepted instructions from A only.  What they did notice though was that the document was undated and in a moment of misguided altruism, inserted the date themselves.

The inevitable happened. The land was sold (at an undervalue) and the money transferred to Mrs Johnson who gave three-quarters of it to her son. 

Court proceedings were therefore brought against the solicitors for, amongst other things, failing to satisfy themselves that the instructions for the sale of the land were the wishes of Mrs Johnson and failing to satisfy themselves that she had capacity to give such instructions.  In both instances, the Claimant relied upon breaches of the Code which resulted in the Court concluding that, breach on its own could not be conclusive of liability for negligence.  There has to be something else.

The Legal Services Act

This case was decided in 1995.  Since then we have had the Legal Services Act and specifically s176 which says that:

“A person who is a regulated person in relation to an approved regulator has a duty to comply with the regulatory arrangements of the approved regulator as they apply to that person.”

In short, a solicitor is now under a statutory duty to comply with the Code of Conduct.

Once again though, this can cause uncertainty because there is still a range of acceptable conduct within the guide itself.  You only have to read the Code to see that there are now “objectives” to be reached based upon guiding “principles”.  So what happens in those instances?

The latest decision on negligence and breach of the Solicitor's Code of Conduct

This was considered briefly in the Court of Appeal decision of Hollins v Russell & Others.  That case was actually dealing with the enforceability of conditional fee agreements (CFA) but the Court also gave guidance to costs judges where there were allegations that the CFA was unenforceable because of breaches of statutory provisions.  The details do not need to be set out here but the Court identified the problem above: the question of whether something satisfies a statutory regulation is one of degree.  Obviously, sufficiency will depend on the circumstances of each individual case but ultimately, it was concluded that conditions are met when there has been substantial compliance with what is required or at least, no material departure from it.

Again, that probably isn’t overly helpful from a solicitors negligence claims perspective, but fortunately, paragraph 107 of the judgment is.  The Court suggested that the following was the key question:

Has the particular departure from a regulation ... either on its own or in conjunction with any such other departure… had a material adverse effect either upon the protection afforded to the client or upon the proper administration of justice?  If the answer is 'yes' the conditions have not been satisfied.  If the answer is ‘no’ then the departure is immaterial and (assuming that there is no other reason to conclude otherwise) the conditions have been satisfied.”

The conclusion therefore is that if a solicitor has materially failed to comply with the SRA Code of Conduct since implementation of the Legal Services Act 2008, then it will be considered a breach of statutory duty.  Prior to then, failure to comply was not per se a breach of duty of care but if it was reasonably foreseeable that failure to comply would lead to a loss, then breach would still be found.

As for the Johnson case, the Court did ultimately find that the solicitors had been negligent.  There were too many markers that should have alerted the solicitors to the fact that all was not well – for example, the fact that the witness to Mrs Johnson’s signature was a registered mental nurse - and that whilst failure to check their instructions with Mrs Johnson herself was not, of itself, negligent, given the circumstances of the case, they had failed in their duty to protect her.

Can I sue my solicitor for breach of the Solicitor's Code of Conduct on a no win, no fee basis?

If you have suffered direct financial loss exceeding £10,000 as a result of a solicitor failing to comply with the SRA's Code of Conduct we will be happy to provide you with a free case assessment.

If the case has good prospects of success we will consider whether it is suitable for funding on a no win, no fee basis.

Emma Slade is a solicitor and partner in our professional negligence department. She specialises in solicitors negligence claims. Submit brief details by email to info@proneg.co.uk or call us on 0808 139 1595.

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