Tales Of The Unexpected: The Solicitor's Duty To Advise On Matters Incidental To A Retainer

Author:Mr Jonathan Watmough
Profession:Keystone Law
 
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The legal services market is more competitive now than it has ever been: not only are there more practising solicitors than ever before, but there are also more non-solicitors providing legal services than ever before. For the consumer, this may be regarded as a positive development, delivering greater choice and, comparatively, lower fees. However, for practitioners it has increased the pressure to deliver legal results more swiftly and more cheaply than ever before.

While the need to achieve efficiencies in time and cost may well be championed by those who regard it as a sign that the legal profession has become much more modernised and client orientated in its approach, which it has, it can have adverse implications in the context of risk management.

In recent years there have been a string of negligence claims against solicitors, where clients have complained not of the solicitor's failure to comply with his or her express instructions, or indeed of the pro-active steps taken by the solicitor in that regard, but of the solicitor's failure to consider and advise upon incidental issues, for which he or she was not specifically instructed.

Leading authority

One of the leading cases in this area is Credit Lyonnais SA v Russell Jones & Walker (A firm).

Here, the claimant bank wished to exercise a break option contained within a 25-year lease of retail premises in Kent. Pursuant to clause 12, the lease could be terminated by the claimant on the third anniversary of the term ("the Termination Date") by giving the lessor not less than six months previous written notice and upon payment by the claimant of the sum of £11,500, such payment to be made not later than the Termination Date.

The claimant initially instructed the defendant to seek an extension of the Termination Date for a period of 12 months. However, it later wrote to the defendant advising that it wished to exercise the break option pursuant to clause 12 and instructing it to serve the required written notice.

Meanwhile, the claimant prepared to make the termination payment of £11,500 and requested an invoice from the lessor. However, this was not forthcoming and, in the event, the Termination Date passed without any payment having been made. The lessor then refused to accept late payment.

As a consequence of remaining saddled with the lease, the claimant alleged that the defendant should have realised the risk posed to it by clause 12 and should have warned it of the time critical...

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