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by • October 2, 2013 • Probate, WillsComments (0)469

Professional Negligence and the Wills and Probate Practitioner

NOTE: This article was published in October 2013 and reflects the law as it stands on the date of publication and not at any later date.

Negligence where solicitor prepares an invalid Will

Assume the following scenario:

  1. A testator executes a Will (“Will 2”) revoking a previous Will (“Will 1”).
  2. Will 2 is set aside in a probate claim, brought by the beneficiaries of Will 1, on the grounds of lack of testamentary capacity, want of knowledge and approval and/or undue influence.
  3. The beneficiaries of Will 1 obtain an order for costs in the probate action against the defendant beneficiaries/executors of Will 2, but the order cannot be enforced (e.g. because the defendants were publicly funded).
  4. The personal representatives or beneficiaries of Will 1 then bring negligence proceedings against the solicitor who prepared Will 2 alleging that the solicitor was negligent in preparing Will 2 for a testator:
    1. whose lack of capacity would have been revealed if sensible precautions had been taken (such as following the golden rule); and/or
    2.  where it ought to have been apparent that the testator did not know and approve of the Will, e.g. because the solicitor took instructions from a third party; and/or
    3. where the solicitor failed to take due precautions against undue influence, e.g. by taking instructions in the presence of a beneficiary who is subsequently found to have exercised undue influence.

Professional negligence claim

 

As the beneficiaries of Will 1 have incurred irrecoverable costs in bringing the probate action to set aside Will 2, it might be thought that they would have a professional negligence claim against the solicitor who prepared Will 2.

This is precisely what happened in Sifri v Willis [2007] WTLR 1453. The testator made two Wills in favour of his wife. These Wills were set aside in a probate action, brought by the testator’s daughter as the beneficiary of a previous Will, on the grounds of want of knowledge and approval. The solicitor had failed to ascertain from the testator what his true instructions were, and had taken instructions from the testator’s widow.

The daughter was able to recover her costs, as damages, from the solicitor in a professional negligence claim. The solicitor accepted liability.

As the Judge commented, if a solicitor fails to take instructions from the proposed testator, takes them instead from a third party, does not check to see he has understood his instructions properly, and does not keep proper notes of his instructions, it is reasonably foreseeable that a challenge to whatever Wills are executed as a result will ensue, and that the costs thereby incurred are foreseeable.

Rule 2(1)(d) of the Solicitors Code of Conduct provides that a solicitor must refuse to act where instructions are given by someone other than the client, or only by one client on behalf of others in a joint matter. The solicitor must not proceed without checking that all clients agree with the instructions given. Solicitors must take instructions from the testator.

LESSONS: Take final instructions from the testator, not anyone else. Beware of “interpreters” and intermediaries.

The solicitor should also take steps to ensure that the contents of the Will are brought home to the testator. The Will should be read to the testator, and the testator should read it in the presence of the solicitor. The solicitor should ask non-leading questions so as to be sure, as a result of a rational two-way discussion in which the testator has a positive input, that the testator genuinely understands and approves the contents of the Will. This process should be properly recorded in an attendance note.

 

The correct claimant

 

There is a trap for the unwary which is illustrated by the case of Worby v Rosser [2000] PNLR 140. The testator made two Wills, the first in 1983, the second in 1989. The 1989 Will was set aside in contested probate proceedings on the grounds, inter alia, of lack of testamentary capacity. The claimants (who were beneficiaries of the 1983 Will) brought a negligence claim against the solicitor who had prepared the 1989 Will alleging that he owed a duty to them, as beneficiaries of the 1983 Will, to take reasonable care to ensure that the testator had testamentary capacity. The claimants claimed damages equal to the irrecoverable costs of the probate action.

The claim was dismissed on the basis that the beneficiaries had suffered no loss. There was a Court order that the beneficiaries’ costs should be paid out of the estate, with the result that the beneficiaries were recompensed for their personal loss.

The suggestion was that the personal representatives would have had a good claim, personal representatives being the proper parties to claim for losses to the estate. Indeed, it has subsequently been confirmed that, in the circumstances of Worby v Rosser, personal representatives have a good claim to recover damages for the benefit of the estate (Corbett v Bond Pearce  [2001] WTLR 419, at 430D-E).

 

The Golden Rule

 

In Re Simpson (1977) NLJ 487 Templeman J said that:

In the case of an aged testator or a testator who has suffered a serious illness, there is one golden rule which should always be observed, however straightforward matters may appear and however difficult or tactless it may be to suggest that precautions be taken: the making of a will by such a testator ought to be witnessed or approved by a medical practitioner who satisfied himself of the capacity and understanding of the testator, and records and preserves his examination and findings.

The value of a medical opinion is that a friend, or a non-medical professional adviser, such as a solicitor, may fail to detect defects in mental capacity which would become apparent to a trained and experienced medical examiner who understands the test for testamentary capacity (Cowderoy  v Cranfield [201 1] EWHC 616 (Ch), at para. 137).  If a medical opinion is obtained certifying capacity, this may go a long way to avoid a subsequent probate claim based upon lack of capacity.

 

Judicial criticism where failure to observe the golden rule

 

In Key v Key [2010] EWHC 408 (Ch) Mr Key, an 89 year old farmer made a Will, 10 days after the unexpected death of his wife of 65 years, providing for the bulk of his estate to be divided between his two daughters. In stark contrast, under his previous Will, his estate had been left, subject to his wife’s life interest, equally between his two sons. A solicitor (Mr Cadge) had, 2 days before, attended upon Mr Key at his home, at the request of one of the daughters, Mary. Mary accompanied Mr Key to the solicitor’s offices on the day when he executed his Will.

The Court found that Mr Key was devastated by the recent death of his wife when he made his Will. This amounted to a severe affective disorder which on its own, or together with the mild dementia from which Mr Key was suffering, deprived him of testamentary capacity.

Alternatively, even on the assumption that Mr Key had capacity, the Will was nonetheless invalid on the grounds of want of knowledge and approval. Mr Key had not applied his own mind and decision-making powers in apparently agreeing to his daughter’s assertion that his existing Will was unfair and that he should change his Will so as to leave his remaining property to his daughters.

The solicitor was roundly criticised by the trial Judge. His failure to observe the golden rule had “greatly increased the difficulties to which this dispute has given rise and aggravated the depths of mistrust into which his client’s children have subsequently fallen”.

If, therefore, the testator’s sons (the successful claimants in the probate action) had not been able to enforce a costs order against the daughters (the unsuccessful defendants), the sons might have had a professional negligence claim against Mr Cadge.

 

Failure to follow golden rule not necessarily fatal

 

A failure to follow the golden rule will not necessarily mean that the Will is invalid for lack of capacity. As Sonia Proudman Q.C. said in Allen v Emery [2005] EWHC (Ch) 2389, at para. 24:

It is undoubtedly a desirable precaution, and one which can save a deal of trouble in the future, for a solicitor to observe the golden rule where there is the possibility of dispute as to testamentary capacity. Failure to do so, however, is not in my judgment determinative; the rule is no more than prudent guidance for a solicitor … Ultimately capacity is a question of fact like any other which the Court must decide on the evidence as a whole.

 

Hawes v Burgess

 

In Hawes v Burgess [2013] EWCA Civ 74 Mrs Burgess was 77 and was suffering from dementia of modest severity. She made a Will leaving her estate to her two daughters, excluding her son, Peter, with whom she was on good terms. The trial Judge found that, if Mrs Burgess had intended to disinherit Peter, she would have told him.

Peter challenged the Will on the grounds of lack of testamentary capacity, and want of knowledge and approval. He relied upon expert evidence that Mrs Burgess was suffering from dementia. Most materially, the solicitor had not observed the golden rule. He merely relied upon his own judgment that Mrs Burgess appeared to be capable. However, he had not even met her before he took her Will instructions. He did not, therefore, have anything to judge her capacity against.

The incapacity claim succeeded at first instance (as did a claim based on want of knowledge and approval).

 

Court of Appeal decision

 

However, the Court of Appeal preferred to decide the case on the grounds of want of knowledge and approval. Considerable doubt was cast on the trial Judge’s decision on testamentary incapacity, despite the failure of the solicitor to observe the golden rule.

 

As the Court of Appeal emphasised, it is a very strong thing for a court to find that a testator lacked testamentary capacity when:

(a)  the Will was prepared by an experienced and independent solicitor following a meeting with the testator;

 

(b)  the Will was executed by her after the solicitor had read and explained it;

 

(c)  the solicitor considered that the testator was capable of understanding the Will; and

 

(d)  the terms of the Will are not, on their face, inexplicable or irrational.

A Will, executed in these circumstances, should only be set aside “on the clearest evidence of lack of capacity” (para. [60]). The mere failure to observe the golden rule did not in itself amount to the clearest evidence of incapacity.

The expert evidence of incapacity was also given little weight. The Court of Appeal expressed doubt as to whether evidence of lack of capacity from a medical expert who had never actually met or examined the testatrix would be sufficient to trump evidence of capacity from the solicitor who had prepared the Will.

 

Litigator’s perspective

 

Hawes v Burgess gives some support to solicitors advising the PRs and beneficiaries of a Will which is challenged on the grounds of testamentary incapacity, where the golden rule has not been observed. If a competent solicitor prepared a rational Will, having no serious reason to doubt the testator’s capacity, there will be strong grounds for resisting the challenge to the Will.

Another lesson arising out of Hawes v Burgess is that caution should be taken about giving too much weight to non-contemporaneous medical evidence of incapacity. The evidence of a competent solicitor, who prepared the Will, that the testator appeared to be capable, may be more persuasive.

Evidence of lay witnesses should, however, be given great weight. In Re Wilkes [2006] WTLR 1097 the testatrix had suffered two significant strokes. The Will (which was prepared by a solicitor) was challenged on the grounds of incapacity. A consultant physician, who had never met the testatrix, gave evidence by reference to the testatrix’s medical records. The expert concluded that, when the testatrix gave instructions for and executed the Will she had widespread brain damage as a consequence of having suffered a number of strokes.

The Court, nonetheless, concluded that there was sufficient evidence of capacity from independent witnesses, relating to the testatrix’s ability to recall the birthdays of all her children and grandchildren, her capacity to engage in meaningful conversations, to read newspapers, to enter into a newspaper bingo game, and to make a joke at the solicitor’s office.

 

Private client solicitor’s perspective

 

For a private client solicitor, the lesson of Hawes v Burgess is to observe the golden rule. A solicitor should always have the rule in mind in the case of a hospitalised, or recently hospitalised, testator, particularly if the Will represents a significant departure from previous Wills, or is otherwise likely to be controversial.

At the very least, the solicitor in Hawes should have advised Mrs Burgess that it would be a sensible precaution, in order to avoid any challenge to the Will, to consult a doctor to certify capacity. If the doctor had certified capacity, the probate claim (which went to the Court of Appeal) might have been avoided.

There is little to be lost by the solicitor at least advising that the rule be observed, where the testator’s capacity is reasonably in doubt, but is not clearly absent. The solicitor should seek to persuade the testator of the value of a medical certification of capacity in preventing costly and unpleasant litigation after the testator’s death.

If the testator declines to agree to a doctor being brought in, the solicitor will have done his duty. A solicitor cannot be in breach of duty in failing to make inquiries of a doctor if the testator has not authorised the making of such inquiries (see Public Trustee v Till [2002] WTLR 1169, para. [25]). The solicitor would be acting properly and competently in advising a testator as to the consequences of not obtaining medical confirmation of capacity, and in recording such advice. Of course, this assumes that the testator has capacity to decide whether or not to consult a doctor.

 

Negligence claim where Will upheld

 

There is an interesting, and unresolved, question of whether a solicitor, who has failed to observe the golden rule, could be liable in negligence to the beneficiaries of the Will, even if the Will is upheld and the testator is found to have had capacity.

The beneficiaries and/or personal representatives of the challenged Will will have incurred costs in successfully defending the probate claim. A losing party may escape an order to pay the costs of the successful party in full, if and to the extent that the circumstances afforded reasonable grounds for investigation (see Kostic v Chaplin [2007] EWHC 2069). There may have been reasonable grounds for investigation (at least up until the exchange of expert evidence) if the golden rule was not observed.

Therefore, the successful beneficiaries and/or personal representatives might not succeed in obtaining an order that the losing parties pay their costs in full. Alternatively, the successful beneficiaries may obtain an order for costs, but not be able to enforce the costs order.

In principle, the successful beneficiaries could be entitled to recover their unrecovered costs from the solicitor who failed to observe the golden rule, if it can be established that those costs would have been saved if the golden rule had been observed (because there would then have been no reasonable grounds for investigation). However, there is no case on the point.

 

Cases of urgency

 

In Wharton v Bancroft  [2011] EWHC 3250 (Ch), Mr Wharton, who was terminally ill, made a death-bed Will in contemplation of marriage, leaving his entire estate to his partner, Maureen, of 32 years. The Will was prepared by a solicitor, Mr Bancroft, who read it to Mr Wharton before execution. Immediately after executing the Will, Mr Wharton married Maureen. He died a couple of days later. Mr Wharton’s children claimed that the Will was procured by Maureen’s undue influence, even though she had not been present when instructions were given to the solicitor. The claim failed. One of the arguments in support of the undue influence claim was that Mr Bancroft had not followed the golden rule. Norris J had this to say, at para. [110]:

I consider the criticism of Mr Bancroft for a failure to follow “the golden rule” to be misplaced. His job was to take the will of a dying man. A solicitor so placed cannot simply conjure up a medical attendant. He must obtain his client’s consent to the attendance of and examination by a doctor. He must procure the attendance of a doctor (preferably the testator’s own) who is willing to accept the instruction. He must make arrangement for any relevant payment (securing his client’s agreement). I do not think Mr Bancroft is to be criticised for deciding to make his own assessment (accepted as correct) and to get on with the job of drawing a will in contemplation of marriage so that Mr Wharton could marry. I certainly do not think that “the golden rule” has in the present case anything to do with the ease with which I may infer coercion. The simple fact is that Mr Wharton was a terminally ill but capable testator.

Although the claim was of undue influence, and not of lack of testamentary capacity, Norris J’s comments are of application to incapacity claims. A solicitor is not necessarily to be criticised for making his own assessment of capacity where there is a need for urgency, e.g. because the testator is terminally ill and would not consent to the delay occasioned by instructing a doctor.

 

Doubts as to value of medical evidence procured pursuant to golden rule

 

There is, in any event, a real doubt as to the value of medical evidence obtained from a GP in observance of the golden rule. Most GPs or other medical professionals – even if they are prepared to assist (which they are often not) – do not have the specialist expertise to assess testamentary capacity. In Perrins v Holland [2009] EWHC 1945 (Ch), para. 59, Lewison J cast doubt on the medical validity of the golden rule:

 

Dr Gross stressed that the assessment of a person’s cognitive capability is a task of great difficulty. He suggested that a medical practitioner such as a specialist MS liaison nurse, or a GP might not be capable of the task, which could really only be adequately undertaken by a specialist neurologist. Even for a specialist neurologist the determination of testamentary capacity was, in his view, a very difficult exercise. I may say that his evidence cast considerable doubt on the medical validity of the so-called “golden rule that in case of doubt about testamentary capacity a lawyer should call in a GP. It is also striking that during the course of the history of Robert’s illness no one (including medical practitioners) was willing to give an opinion on whether he actually had mental capacity. Nor was Robert tested to determine the extent of such cognitive defects as existed.

This must surely be correct: many GPs will not have the requisite skill to test testamentary capacity. In one sense, the testator’s GP is the person best placed to assess the testator’s capacity, as the GP will have knowledge of the testator’s health and circumstances. However, the GP may not have sufficient specialist expertise.

 

However, if a specialist neurologist is to be enlisted this may involve considerable delay and expense. If the testator is aged, or seriously ill, delay in executing the Will will not be attractive. Indeed, the solicitor could be liable in negligence to the disappointed beneficiaries, if the solicitor is responsible for unreasonable delay in procuring execution of the Will, and the testator dies in the meantime (see White v Jones [1995] 2 AC 207). One solution may be for the Will to be duly executed and witnessed, and then be re-executed by the testator, and witnessed by the specialist.

 

PROFESSIONAL NEGLIGENCE LITIGATION IN WILL AND PROBATE MATTERS

 

White v Jones

 

A classic instance of professional negligence in the context of Wills arises where a solicitor fails to prepare the Will for execution promptly, and the testator dies before it is executed.

In White v Jones the testator quarrelled with his two daughters, and executed a Will cutting them out of his estate. He was then reconciled with his daughters. On 17 July 1986 the defendant firm of solicitors received a letter from the testator asking them to prepare a new Will to include legacies of £9,000 each to his daughters. The testator died on 14 September 1986, without the new Will having been put in place (59 days after receipt of the letter of instruction). The defendant firm of solicitors were guilty of negligent delay.

The issue was whether the negligent solicitors owed a direct duty of care in tort to the daughters as disappointed beneficiaries who, but for the solicitor’s negligent delay in preparing the Will for execution, would have received legacies of £9,000 each. The argument against liability was that the solicitors’ only duty was to the testator pursuant the solicitor-client retainer, i.e. in contract. The daughters’ claim was for pure financial loss in respect of a lost expectation of benefit under a Will. Such a claim could, on previous authority, only be made in contract, not in tort. However, there was no contractual relationship between the firm of solicitors and the daughters.

 

Despite the absence of any contractual relationship between the solicitor and the beneficiaries, the daughters were awarded a cause of action in tort to recover damages equal to the value of the legacies to which they would have been entitled under the Will (£18,000).

 

The rationale is set out in Lord Goff’s judgment. The assumption of responsibility by the solicitor towards his client extended to the intended beneficiary who (as the solicitor could reasonably foresee) might, as a result of the solicitor’s negligence, be deprived of his intended legacy in circumstances in which neither the testator nor his estate will have a remedy against the solicitor.

 

The essence of the duty to the beneficiaries is the duty of the solicitor to ensure that effect is given to the testator’s intentions to benefit third parties, i.e. potential beneficiaries (per Chadwick L.J. said in Carr-Glynn v Frearsons [1999] Ch 326, at 337E). Therefore, there will only be a breach of duty in tort to the claimant beneficiaries, if there is also a breach of the retainer with the testator.

 

Quantum of damages

 

In a standard White v Jones case, the claim will be to such amount as the claimant would have received if a valid Will had been executed. If the claimant would have been entitled to a legacy or residuary gift, which would have been reduced by estate liabilities, the claimant is only entitled to damages equal to the entitlement as reduced by such liabilities.

The duty is not a duty to take care to ensure that the specific legatee receives his legacy; it is a duty, in relation to the relevant property, to take care to ensure that that property forms part of the testator’s estate so that it can pass to the intended beneficiaries on death (Carr-Glynn v Frearsons [1999] Ch 326, at 337).

Credit must be given for any benefit under any Will that is admitted to probate; for the value of any interest under an intestacy; and for any ex gratia payments made made by the beneficiaries of such a Will.

 

Discount for uncertainty of benefit under Will

 

What if the claimant is one of a number of beneficiaries of a will trust?

In Trusted v Clifford Chance [2000] WTLR 1219 the claimant was one of 9 members of a discretionary class of beneficiaries. The submission that the claimant should be entitled to 1/9 of the value of the fund was rejected. The court must fairly assess the value of the expectation that has been lost. This is no doubt correct, albeit that it may give rise to difficult valuation issues. Some beneficiaries might have been more likely to have benefited than others. The valuation exercise may be easier where the claimant has, say, been left the remainder interest under a trust, subject to the life interest of the testator’s spouse.

In Gray v Richards Butler [2000] WTLR 143 Lloyd J suggested (obiter) that where, due to the solicitor’s negligence, a Will, containing a Will trust with a power of appointment in favour of a class of beneficiaries, the trustees should bring the claim for the benefit of the class as a whole. However, he stated that this was a problem which would have to be faced in some future case.

Problems could arise if, say, the trustees will not bring proceedings. However, the trustees could then be joined as defendants to proceedings commenced by the disappointed beneficiary.

 

Limitation

 

The disappointed beneficiary’s cause of action accrues on the death of the testator. That is no doubt the case in a delay case, where no Will is prepared before the testator’s death (Bacon v Howard Kennedy [2001] WTLR 169).

It is probably also the case where a Will has been defectively executed (see Nouri v Marvi [2010] PNLR 7).

The primary limitation period in tort is 6 years (s. 2 of the Limitation Act 1980), i.e. 6 years from death.

However, where the primary limitation period has expired, it may be possible to extend the limitation period pursuant to section 14A of the Limitation Act 1980. That section applies to actions in tortious negligence, and provides for a secondary limitation period to run for 3 years from “the starting date”, i.e. the earliest date on which the plaintiff or any person in whom the cause of action was vested before him first had both the knowledge required for bringing an action for damages in respect of the relevant damage and a right to bring such an action.

However, this is subject to a 15-year longstop from the date on which there occurred any act or omission which is alleged to constitute negligence and to which the damage in respect of which damages are claimed is alleged to be attributable in whole or in part (s. 14B of the Limitation Act 1980).

The 15-year time longstop applies even if one of the plaintiffs is under a disability, being a minor or incapable during the whole or part of that period (Limitation Act 1980, s. 28A(2).

The 15-year time-limit does not apply where any fact relevant to the claimant’s right of action has been deliberately concealed from him by the defendant (Limitation Act 1980, s. 32(1)(b), 32(5)). In such a case, the limitation period is 6 years from the date when the plaintiff could reasonably have discovered the relevant fact.

The 15-year longstop applies even if the cause of action has not yet accrued (s. 14B(2)) and, therefore, even if the 6-year time limit from the date of the testator has not expired. There may, therefore, be a limitation defence even before the expiry of 6 years from the date of death if, say, a defective Will was executed more than 15 years ago.

 

It may be arguable that the last occurrence of any omission, alleged to constitute negligence, is on the date of the death of the Deceased, on the basis that there was a continuing duty up until his death to draft a valid Will. However, it is questionable whether any such continuing duty is owed, or that there was a continuing retainer to advise about matters relating to the Will (see Bell v Peter Browne & Co [1990] 2 QB 445).

 

Possibility of a change of mind by testator

 

Assume that:

(a)  The testator gave instructions to a solicitor to prepare a Will benefiting B;

 

(b)  The solicitor delays for a unreasonable period and the testator dies before the Will is executed; or

 

(c)  The testator makes a Will which, due to the negligence of the solicitor, is defectively executed; and

 

(d)  There is evidence that the testator was having second thoughts about benefiting B at some time between instructions and death.

 

The solicitor might have a defence to a negligence claim if it could be established that the testator had changed his mind before death, and would not have executed a valid Will benefiting B . This would break the chain of causation. However, it is not sufficient to show that a degree of equivocation had set in Humblestone v Martin Tolhurst Partnership [2004] PNLR 26).

Alternatively, there could, in theory, be a discount for the possibility of a change of mind. However, in a number of cases, the Court has declined to apply such a discount.

In White v Jones [1995] 2 AC 207 the Court of Appeal awarded the full amount of the legacies to which the claimants would have been entitled under the Will which the solicitor was instructed to draft. No deduction was made for any prospect of a last minute change of heart even though there was a suggestion of this (see 228A-E). The House of Lords did not say anything on this point.

In Bacon v Howard Kennedy [1999] PNLR 1 it was argued that damages should be reduced to take into account the contingency that the deceased would not have  executed any Will sent to him or that he would have altered it. This was not accepted.

In Humblestone v Martin Tolhurst Partnership no discount was applied for the possibility that the testator might have changed his mind and not made the Will in question, where Mann J held that there was “at most a degree of uncertainty, and arguably not even that.”

 

Third party claims against estate

 

Assume that:

(a)  The testator has given instructions to a solicitor to leave the whole of his estate to his lover, leaving nothing to his long-suffering wife;

 

(b)  The testator dies before the Will is executed, or makes a Will which is set aside on the grounds of formal invalidity;

 

(c)  If the Will had been validly executed, the wife would have had a good claim for reasonable financial provision under The Inheritance (Provision for Family and Dependants) Act 1975, or to set aside the Will on the grounds of undue influence of the lover; and

 

(d)  The lover sues the solicitor in negligence for the loss of the benefits under the Will which the solicitor was instructed to draft.

In principle, damages could be reduced to reflect the contingency that the wife would have succeeded in a 1975 Act claim, or an undue influence claim. However, in Horsfall v Haywards [2000] WTLR 29 the Court declined to make any such reduction where the claims were merely speculative. There was, for instance, insufficient evidence before the court in relation to the 1975 Act claim. Things might have been different if evidence had been presented to the Court of the wife’s financial circumstances, and of other matters supporting a putative claim under the 1975 Act by the wife, together with a statement from the wife that she would have pursued the claim.

 

In Bacon v Howard Kennedy [1999] PNLR 1 the Court refused to reduce the damages for the speculative chance that, if the claimant had pressed the solicitor to prepare the Will, the Will would have been set aside on the grounds of undue influence.

 

 

Claimant’s claim against the estate

 

 

Assume that:

 

(a)  A wife gives instructions that her half share in the matrimonial home be left to her children, but on terms that her husband be permitted to occupy the matrimonial home, and any replacement property, for life.

 

(b)  Due to the negligence of the solicitor, the Will is not executed before the death of the wife, or is not executed properly.

 

(c)  The wife’s half share in the matrimonial home passes to her children absolutely under the last valid Will.

 

(d)  The husband brings a negligence claim against the solicitor claiming damages equal to the value of a secure right to occupy the matrimonial home, and any replacement property, for life.

 

The solicitor might defend the negligence claim on the basis that the husband has a good claim under the 1975 Act against the children (who may be his as well) for an order permitting him to occupy the matrimonial home, and any replacement property, for life. The insurers may even offer an indemnity in respect of the costs of the claim.

 

The husband may be reluctant to bring legal proceedings against his own children. The children may not be willing to concede the claim, because they wish to retain the right to realize the value of their half share, or to insist that half the sale proceeds be paid to them if their father wishes to sell the matrimonial home and move elsewhere. They may have grounds for defending the claim if their financial circumstances are poor.

 

There is no authority on the point. However, it might be reasonable to expect the husband to bring 1975 Act proceedings against the children, with the benefit of an indemnity as to costs, assuming that the husband had a good claim under the 1975 Act.

 

One possible solution would be for the children to appoint independent solicitors, and for the husband’s solicitors to negotiate an agreement to pay a sum of money to the children (subject to being indemnified by the solicitors) in satisfaction of his 1975 Act claim. If the settlement sum is reasonable, the husband could then claim that sum from the solicitors.

 

 

Failure to implement testator’s instructions

 

A common complaint is that the testator has given instructions to a solicitor to draft a Will benefitting B, but that the solicitor has negligently failed to include such a provision in the Will.

In Walker v Medlicott & Son [1999] 1 WLR 727, at 731H, 738A) the claimant was a niece of the testatrix. She claimed that the testatrix had instructed a solicitor to draw up a Will leaving her house to the claimant. There was ample evidence that the testatrix had informed the claimant and 9 other persons that she had left her house to the claimant. She had even made a note, prior to visiting the solicitor, as a reminder to leave her house to the claimant. However, the testatrix’s Will did not include a specific devise of the house to the claimant, only a less favourable gift of a 1/6 share of her residuary estate including the house.

The Court held that it was necessary to establish by “convincing evidence” that instructions to include a gift of the house to the claimant had been given to the solicitor. The difficulty was that the testatrix was dead; the claimant was not present when instructions were given; and the solicitor had no specific recollection of the meeting at which instructions were given.

The solicitor was found to be honest, had made a detailed attendance note which corresponded with the contents of the Will, and had given reliable evidence as to his usual practice in preparing a Will. Based on that practice and the documentary evidence, the solicitor was convinced that the testatrix must have changed her mind and decided not to give her house to the claimant. The Judge was entitled to attach weight to the solicitor’s evidence. It was also possible that there had been a genuine misunderstanding between the testatrix and the solicitor. Therefore, the allegation of negligence was not proved.

 

Mitigation by rectification

 

There was a second ground on which the claimant failed in Walker v Medlicott & Son [1999] 1 WLR 727. The claimant had failed to mitigate by bringing rectification proceedings.

Pursuant to s. 20 of the Administration of Justice Act 1982 if a court is satisfied that a Will is so expressed that it fails to carry out the testator’s intentions, in consequence (a) of a clerical error or (b) of a failure to understand his instructions, it may order that the Will shall be rectified so as to carry out his intentions.

An application for an order for rectification shall not, except with the permission of the court, be made after the end of the period of 6 months from the date on which representation with respect to the estate of the deceased is first taken out (s. 20(2) AJA 1982).

In Walker v Medlicott the Court of Appeal found that, if, as the claimant asserted, the Will failed to carry out the testatrix’s intentions, that must have been in consequence either of a clerical error of the solicitor in recording her instructions in his attendance note, leading to a corresponding error in the Will as drafted; alternatively, of a failure on his part to understand her instructions. On either basis the Will could have been rectified.

The key point was that the evidence in support of the negligence claim would be the same as that in support of the rectification claim. Indeed, rectification was easier to establish than negligence (on the basis that there may have been a non-negligent, but rectifiable, misunderstanding by the solicitor of the testatrix’s intentions). The claimant should have applied for rectification first, exhausting that remedy, and only sued the solicitor as a last resort.

If successful, the claimant would have inherited the house; any damages for negligence would have been confined to the costs incurred in putting right the terms of the Will (there being no bar to a White v Jones claim that the claimant also has a remedy in rectification). If, on the other hand, the application for rectification failed, so would the negligence claim also fail.

 

Advice where potential claim to rectify

 

Generally, where the claim is that the Will does not express the testator’s intentions due to a clerical error, or a failure to understand the testator’s instructions, the claimant should first commence rectification proceedings. If successful, a claim can subsequently be made in negligence against the solicitor to recover the costs of the action.

Alternatively, negligence and rectification claims could be brought in the same proceedings, with the negligence claim being stayed pending the conclusion of the rectification claim. In any event, the negligence claim should not be commenced in advance of the rectification proceedings (Re Grattan [2001] WTLR 1305, at 1311B).

However, negligence proceedings may be commenced if, for any reason, it is unreasonable to expect the claimant first to seek rectification, e.g. because of difficulties of enforcement. In Horsfall v Haywards [1999] 1 FLR 1182 the Court did not require the claimant to mitigate by bringing proceedings in Canada.

 

Rectification not available

 

In order to rectify a Will, the mistake must be one which has been caused by a clerical error or a failure to understand instructions.

However, it will often be the case that the solicitor has introduced words, to which he has applied his mind with a proper understanding of his instructions, but which (perhaps through failure properly to understand the law) do not achieve the objective which the solicitor and the testator intended (Re Selegman [1996] Ch 171, at 184).

In other words, the solicitor may have understood his instructions, and made no clerical error, but been under a mistake as to the legal meaning of a clause or provision.

In Stephenson v Stephenson [2009] WTLR 1467 a settlor created a lifetime settlement settling property upon trust for himself for life, remainder to his children.  The draftsman correctly understood that the trustees should have power to advance capital to a life tenant. The settlement contained a provision extending the statutory power of advancement in s. 32 of the Trustee Act 1925 to the whole, rather than just one-half of, the trust fund. The draftsman failed to appreciate that this provision did not give the trustees power to advance capital to a life tenant, only to persons with vested or contingent interests in capital. The settlement was rectified so as to include a power to advance capital to the life tenant.

Rectification would not have been possible in the case of a will trust. The mistake was not a clerical error, nor due to a failure to understand instructions. It was an error of law as to the meaning of a particular provision.

If, therefore, the solicitor had inadvertently failed to include a power to advance capital to the life tenant of the trusts of his residuary estate, the life tenant’s remedy would be in negligence against the solicitor. There would be no requirement to bring rectification proceedings (because they would fail).

 

Failure to take instructions

 

The life tenant would also have to demonstrate that:

(a)  The testator had, in fact, given instructions to the effect that there should be a power to advance capital to the life tenant; and

 

(b)  The solicitor had failed to give effect to those intentions in the Will as drafted.

 

It would not be enough if the testator had never given specific thought to the question of whether or not to include a power to advance capital to the life tenant. Even if the testator probably would have included such a power – if the matter had been brought to his attention by the solicitor – that is not sufficient. In other words, a failure to take instructions on an important matter may not found a liability in negligence.

According to Blackburne J in Gibbons v Nelson [1999] Ch 326 the solicitor must know (a) what the benefit is that the testator wishes to confer and (b) who the person or persons or class of persons are (in each case ascertainable if not actually named) on whom the testator wishes to confer the benefit.

The solicitor cannot know whether or not the testator wishes to include a power to advance capital to the life tenant, if that question is never asked. The solicitor cannot be liable in those circumstances because he has not acted in breach of his instructions, but failed to take them (unless, perhaps, he has some other means of knowing the settlor did intend to include such a power).

The claim might also fail on the basis that there is no convincing evidence as to what the testator would have done if the matter had been raised.

 

 

Loss to estate

In some circumstances, the effect of the solicitor’s negligence may be that the estate is deprived of an asset that would otherwise form part of the estate on the death of the client. In those circumstances, the claim for damages for loss to the estate would normally be brought by the personal representatives of the estate. However, there may be circumstances in which the claim can be brought by a specific legatee.

 

Loss to estate during administration: claim by personal representative

 

In Chappel v Somers & Blake [2003] 3 All ER 1076 solicitors had negligently failed to take any steps to obtain probate and then to get in and administer the assets of the estate for a period of 5 years. This meant that no income was derived from two properties which were unlet during that period. Those properties formed part of the residuary estate. The executrix (who had no beneficial interest in the estate) brought an action against the solicitors alleging breach of contractual and tortious duties owed by them to her.

The solicitors applied to strike out the action contending that any alleged loss had been suffered by the residuary beneficiary, to whom the properties had been devised, and not by the executrix in her capacity as such.

Neuberger J held that the executrix represented the interest of the deceased owner of the property and was, therefore, the person entitled to recover damages. During the period of administration she was the person entitled to income from the properties comprised in the estate. Those properties did not, during the period of administration, vest in the residuary beneficiary. The executrix was liable to account to the residuary beneficiary for any damages received (thus preventing any double recovery). The executrix had herself suffered a loss because she has lost the income that she would have received if probate had been obtained and the assets are administered promptly. Therefore, the proper claimant was the executrix, not the residuary beneficiary. However, the residuary beneficiaries should be joined as parties to prevent double liability.

The position was, therefore, different from White v Jones where the personal representative has no remedy because there is no loss to the estate.

In summary, the personal representative is usually the proper claimant where there is a loss suffered by a residuary beneficiary.

 

Loss to estate of property left to specific devisee

 

Where, however, loss has been suffered by the estate, and consequently by a specific devisee or legatee, the specific devisee or legatee may bring a claim.

In Carr-Glynn v Frearsons [1999] Ch 326 the testatrix owned a property jointly with her nephew. She instructed her solicitor to prepare a Will leaving her share to her niece by a specific devise. The testatrix (who was 81) died before notice of severance was given. The Will was, therefore, ineffective to pass a half share in the property to the niece.

The Court of Appeal decided that the solicitors should have advised the testatrix to serve a notice of severance on the nephew immediately, and that the testatrix would have accepted such advice.

The niece claimed damages for negligence from the solicitors on the basis that she had suffered the loss of a half share in the property. However, an issue arose as to whether she was the correct claimant.

The negligence lay in failing to ensure that an asset fell into the estate by advising that a notice of severance be served promptly. On that basis the relevant loss would appear to have been suffered by the estate, and should be claimed by the personal representatives.

However, the Court of Appeal allowed a claim by the intended specific devisee of the severable half share in a property on the basis that, if the damages were paid to the personal representatives, they would form part of the residuary estate distributable to the residuary beneficiaries, and not to the claimant as the testatrix intended. Even though the personal representatives had a remedy, that remedy would have been no use to the person whom the testatrix intended to benefit.

Presumably, therefore, if the testatrix had intended to sever the joint tenancy, and then to leave her half share to the claimant as part of a residuary gift, the personal representatives would have been the correct claimants.

Loss of personal representative by reason of distribution

Lane v Cullens [2011] EWCA Civ 547 involved a negligence claim by the administrator of an estate against solicitors for failure to warn him not to make any distributions out of the estate, given that a third party had asserted a claim to be entitled to the whole estate (which ultimately succeeded). The claimant had distributed £20,000, out of an estate of £61,000, to his brother which his brother failed to repay. The administrator was personally ordered to pay that sum. The claimant alleged that he would not have made this distribution if he had received competent advice not to do so, having regard to the claim against the estate.

The claim was struck out on the grounds that it was statute-barred. More than 6 years had elapsed since the distribution was made. However, in principle, there was a valid claim by the personal representative, in his capacity as such, in respect of the solicitor’s failure to warn him not to make a distribution, when a claim had been made, and not withdrawn, against the estate.

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