01332 226601
No two cases are the same and care must be taken both with taking client’s instructions and the drafting of the legal deed itself.
A trusts error
In the first case, a law firm was negligent in how it drafted a tax planning scheme. The deceased in Gosden & Anor v Halliwell Landau [2021] EWHC 159 wanted to establish a tax mitigation scheme by which her London property would pass on her death to her son. The son and his wife were trustees, though she reserved the right to live at the property during her lifetime.
The firm drafted the trust documents, but the scheme was incomplete as it failed to restrict the testator’s ability to sell without the trustees’ consent. A restriction should have been registered against the property title at HM Land Registry.
However, three years before she died, the testator entered into a civil partnership and sold the property without her son’s knowledge. He did not discover the sale until after his mother’s death when he made enquiries of the firm about the property trust. A successful professional negligence claim followed.
The court’s ruling on the claim itself was handed down in January 2020 but the recent decision on quantum is important for its approach to the appropriate level of damages on the facts.
The default position is such that damages should be determined at the date the wrongful act occurs or when the loss caused by the breach arises. The question in this case was, at what date did the claimants’ loss crystalise?
The judge agreed with the claimants’ argument that the default position should be departed from. He concluded that it was at the date of the deceased’s death in 2013 that the loss effectively crystallised.
The estate protection scheme had been intended to take effect from the date on which D died and to take another date would lead either to under- or over-compensation.
Negligent will
A series of errors involving non-lawyers at another firm led to dispute that could have been avoided. In Mundil-Williams v Williams, 2021 EWHC 586 Ch, the testator left his farmhouse to his son and daughter-in-law in his 2014 will.
The law firm took his instructions, specifically a secretary who took handwritten notes before typing up a detailed file note along with a standard form completed during the client meeting in which she recorded the key details. These included his intentions as to what was to happen to his residuary estate on death – particularly the farmhouse.
A paralegal was tasked with preparing the will but she wanted some clarification and had a chat with the testator by telephone. However, in what became rather like an expensive case of Chinese whispers, the ‘instructions’ she received differed significantly from the instructions originally given to the secretary.
This resulted in a will that failed to reflect the testator’s intentions, even though he signed it at the firm’s office. The critical mistake in the will, as identified by the court, was the inclusion of the farm in a particular clause when it should, instead, have been left to fall into the residuary estate.
Unsurprisingly, a dispute arose after his death as to the effect of the will. At issue was whether the testator knew and approved its contents. The court ruled that he did not – he had seriously misunderstood its provisions. Practitioners would do well to read the ruling for its 14-point list of reasons for coming to its conclusion. But then, how was the problem in this case to be resolved in practice?
The court decided not to admit an earlier will from 1990 given that it did not reflect the testator’s latest clear intentions. However, rectification of the invalid will was not an option because the issue of rectification had not been raised.
So, the court decided to make an order excluding some of the words from the 2014 will – and admit the amended version to probate.
