Insurance covers the financial risk of a claim, but the reputational damage can be far-reaching.
Today’s outcomes-focused regulation places client outcomes squarely at the centre of the regulatory focus. But it’s not only the outcome that is important – how lawyers arrive at the end result is also important. A recent High Court ruling illustrates the need to consider whether advice to a client should be put in writing and the associated risk of a claim.
The key principles undergirding outcomes-focused regulation make clear what is expected of solicitors. These include requirements to provide a proper standard of client service and to carry on the business “effectively and in accordance with proper governance and sound financial and risk management principles”.
In this case, a professional negligence claim against a senior partner of a Kent firm followed alleged failures to pass on legal advice from counsel to the client. The claim failed but it leaves salutary lessons for lawyers on risk areas in practice management, particularly client relations and service.
What’s the background?
A Norfolk businessman instructed Knights Solicitors in relation to a proposed development that he opposed. A judicial review was unsuccessful. The businessman and his company then brought a claim against Knights for professional negligence and breach of contract – seeking a refund of their legal fees.
The claimants argued that the JR was “doomed from the outset”. They argued that had they been properly advised and, particularly, had they been told of counsel’s apparent pessimistic view of the chances of success - they would not have gone ahead with the claim
At issue was whether a solicitor could be negligent in failing adequately to convey the views of counsel instructed in a case.
The businessman and Matthew Knight, the firm’s senior partner, gave different recollections in evidence, but neither was found to have been trying to mislead the court (the events had taken place five years previously and likely to be remembered differently though genuinely). In the event, the judge preferred the evidence of the Mr Knight as being the most plausible.
Knights did not accept that counsel’s advice was not passed on, stating that it was “adequately relayed orally” to the businessman by Mr Knight. They said this was not outside of the range of steps a reasonably competent solicitor could take - a view accepted by the judge on the facts.
While the damages claims failed, the judge said that “with the benefit of hindsight, things could have been done differently and that advice and other information that was conveyed, on occasions, orally could have been provided in writing. That may have avoided this litigation”.
The judge made the following observations which solicitors will find useful in practice: “There is no rule of law that solicitors must provide counsel's views in writing rather than to convey them orally to a client.”
In reaching his decision, the judge relied heavily on the ruling in Harwood v Taylor Vinters (a firm)  EWHC 471. To paraphrase, there are many circumstances in which it is desirable and or convenient for a solicitor to give advice in writing, for instance to give the client opportunity to reflect on the advice. But there are also many advantages in passing on the advice verbally.
The “only hard and fast rule” is that you should give “whatever advice a reasonably competent solicitor would in the particular circumstances of the case, and give it clearly and so that the client appears to understand it".
This principle extends to communicating counsel’s advice – it does not always have to be in writing and it may depend on the nature of the advice.
But it’s clear from this recent ruling that it would be best to err on the side of caution and communicate legal advice, including advice from counsel, in writing to minimise the risk of a dispute.