These arrangements are becoming increasingly common, with the rise of litigants in person, and “un-bundling” of legal services, including litigation generally and family proceedings. In this case, the defendant solicitors were asked to tidy up a consent order for settlement of a matrimonial dispute.
The claimant sued her solicitors, alleging negligence and breach of contract, because she claimed that they had failed to advise her fully about the terms of the order. The claimant was an experienced accountant, and although a previous firm of solicitors had been advising her, the divorcing couple were acting without solicitors in putting together a consent order themselves. They lodged this for approval by the County Court.
However, the District Judge refused to approve this order, due to lack of precision in the wording. The claimant then instructed the defendant solicitor to amend the draft consent order, to put it in to a form likely to be approved by the County Court. The defendant solicitor duly amended the draft consent order, which the Court approved.
The claimant subsequently regretted the consent order. She made a claim for professional negligence on the basis that the solicitors had failed to advise or warn her against entering into the order.
A District Judge heard four days’ evidence. The claim was dismissed on the basis that the “retainer” or terms of engagement was limited – the defendant solicitor was under no duty to give such advice or warnings.
The solicitors were held to have been working within the limits of a restricted engagement and not to have broader duties to advise on the merits of the claimant’s case, the agreement, or her opportunities for a better outcome. Because of the limited retainer, the solicitors owed no duty to enquire further or to advise that the agreement may be unfair or that there had been no investigation of the husband’s finances.
That sort of advice was not reasonably incidental to the retainer because the claimant:
The claimant appealed to the Court of Appeal. Jackson LJ gave the lead judgment. He reviewed the authorities relevant to limitation of retainer and summarised the key principles:
5. The solicitor and client may, by agreement, limit the duties which would otherwise form part of the solicitor’s retainer.
6. It is good practice for the solicitor to confirm such agreement in writing.
The judgment includes a timely summary of the extent of a solicitor’s duty to advise. It highlights the importance of recording the limits of a retainer in a client care letter when providing unbundled legal service, which are becoming increasingly popular.
Paul Sykes is a Director in our Disputes Management department. For further information regarding professional negligence contact Paul.Sykes@lf-dt.com
Please note this information is provided by way of example and may not be complete and is certainly not intended to constitute legal advice. You should take bespoke advice for your circumstances.