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No Letter? No Care? - Emma Slade is taken aback by a solicitor's suggestion that they didn't owe their client a legal duty of care and can't therefore be sued.
There aren’t many responses that a Defendant can make that cause me to do a double-take, but when I read a Letter of Response this week and saw what the Defendant was trying to argue, it made me blink. Twice.
For those not already “in the know”, a Letter of Response is a stage in the Pre-Action Protocol for Professional Negligence where the defendant sets out why they believe the claim against them is unlikely to succeed: A 'Defence' in other words
In this particular instance, I had written a Letter of Claim to the Defendants (D), who are a firm of solicitors, saying that my Client (C) had instructed them March 2014 to see whether or not C had a claim. There was some urgency about C’s request as they were concerned that a former employee had stolen some valuable information belonging to C and was trying to profit from it. Unfortunately, D sat on the matter for a considerable period of time before doing anything and by then, the damage had been done. I was therefore saying that D had been negligent in failing to act swiftly after they were instructed and so the loss my client suffered was their fault.
Even though there is correspondence on D’s file confirming that they would call for the papers (which they did) and “advise on merits” of the claim, the two-blink inducing response was that they did not consider themselves “formally instructed” by C until they had sent out their Client Care letter some seven months later. As a result, they said they did not owe C any legal obligations (a 'duty of care' as lawyers call it). Because a Defendant cannot be considered negligent unless they owe a 'duty of care' D said that our claim was unfounded.
In over twenty two years of practice, I have yet to receive a Letter of Response which goes along the lines of ,“oops, terribly sorry. We got it wrong. When do you want the cheque?” Defendants defend, its the natural response, even when they have too clutch at straws, but I certainly didn’t expect this defence.
Why is that? It would appear logical that until a solicitor sets out the terms of their retainer, a contract hasn’t been established, so the solicitor doesn’t owe the client a duty of care. But can that be right?
Put simply, no.
If we look at contract law, whilst it is ideal to have a written contract (or in this instance, Terms & Conditions of Business), it is not critical. The Courts will look at the actions and intentions of the parties. This was established as a legal principle as far back as 1885 in the case of Bean –v- Wade but can be summed up by saying that a contractual retainer may arise:
“In a situation where the parties act as if the relationship of solicitor and client existed, although there is no express agreement to that effect, the court will readily hold that there is an implied retainer to be inferred from the parties' conduct.”
But what about in tort?
In the 1990 case of Caparo –v- Dickman, the House of Lords, set out a three stage test:
(i) Could harm be foreseeable if the solicitor did not take care?
(ii) Did the parties have a sufficiently close relationship (proximity)?
(iii) Is it fair, just and reasonable to impose that liability?
In each of those instances, I would say “yes” so far as my case was concerned. C had gone to D for advice and given the facts of the case, if D did not act with reasonable speed, C's case would be prejudiced. C made it clear that they were going to rely on the advice and given that D offered to obtain the evidence and “advise on merits”, I think that any Court would say that it was 'fair, just and reasonable' to impose that liability.
But that isn’t the only case I am relying on. I could start citing cases like Hedley Byrne –v- Heller or Customs & Excise –v- Barclays Bank which make it clear that a duty of care is owed when one of the parties assumes a level of responsibility, but there is a more recent case I have plumped for: Burgess –v- Lejonvarn which is a decision out of the Court of Appeal in 2017. In that case, an architect provided her services free of charge and so claimed she did not owe the claimants a duty of care. The Court disagreed and said:
“the fact that the services were gratuitously provided did not mean that they were informal or social in context and the services were all provided in a professional context and on a professional footing.”
Accordingly, the architect owed the claimant’s a duty of care.
Once I got over the eye-blinking trauma, I drafted a lengthy letter to go back to D citing all of the above and inviting them to concede that, in the circumstances and in light of the case law, they did in fact owe a duty of care to my client when they agreed to “advise on merits”, rather than when they sent out their retainer letter.
I’m rather looking forward to seeing how they respond now. Could be interesting.