PROFESSIONAL NEGLIGENCE
WHITE v JONES LIABILIITY IN CONTEXT OF WILLS, TRUSTS AND TAX
A.
WHITE V JONES
A.1.
Nature of White v Jones liability
The purpose of this paper is to explore the nature and extent of a professional’s liability in
negligence pursuant to White v Jones [1995] 2 AC 207. In White v Jones the House of Lords
fashioned a new remedy for the benefit of the intended beneficiaries of a Will, who had been
deprived of legacies by reason of the negligence of a solicitor. Due to the solicitor’s unreasonable
delay, the Will was not prepared for execution before the testator’s death. Despite the absence of
any contractual relationship between the solicitor and the beneficiaries, the beneficiaries 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. The key point was that the testator and his estate
(who had a claim in contract) had suffered no loss, but that the disappointed beneficiaries (who had
suffered loss) otherwise had no claim. There was, therefore, a gap or “lacuna”, which the House of
Lords filled by providing, what they, no doubt, saw as a one-off remedy.
White v Jones limits liability to a case where a solicitor, or other professional, has been negligent in
failing to give effect to a client’s testamentary intentions. There is a retainer to prepare a Will. The
Will is not prepared or executed before the death of the client, or after death it emerges that the
Will is invalid or defective due to the negligence of the professional. In consequence, the intended or
disappointed beneficiaries suffer loss of the testamentary gift which the client had wanted them to
have.
However, White v Jones has been extended, by analogy, to negligence other than in connection with
the preparation of a Will, and to liability to others than the beneficiaries of a Will. The standard
elements are as follows:
(1) There is a contract between solicitor or other professional (P) and a client (C), the purpose of
which is to confer a benefit on a third party (X). The contract may involve the drafting of a
document such as a Will, a deed of gift, a trust deed; and/or it may involve the giving of
advice.
(2) There is no contract between P and X.
(3) The intention to confer the benefit may be entirely gratuitous (as in the case of a Will).
Alternatively, it may be pursuant to a contract whereby C has agreed to confer a benefit on
X, such as security for a loan, as a condition of receiving a benefit in return from X, such as
the advance of the loan (see E.8 below). In the latter case, there is a common purpose that X
should benefit from the transaction which P is instructed by C to implement.
(4) There is no conflict of interest between C and X. Often X will be a member of C’s family. If
there is such a conflict, then no liability arises.
(5) Often the benefit is to be conferred following C’s death, e.g. a legacy under a Will or a deathin-service lump sum pension benefit (see E.7 below). However, liability may also arise where
there is an intention to confer a benefit on X during C’s lifetime in circumstances where, for
some reason, that benefit is not conferred and the position cannot be rectified. C may not
be able to remedy the situation by perfecting the gift (if, for instance, he has died); or the
1
gift may have passed into the wrong hands and be irrecoverable; or a gift may have been
made into a trust which is ineffective to confer any benefit on X (see E.5 below). It is
essential, however, that neither C, nor his personal representatives, have a claim for
substantial damages (see (9) below).
(6) P voluntarily assumes responsibility for reward to C to implement C’s intention to benefit X.
P could have chosen not to have undertaken the task, but does so without any exclusion of
liability to X. It is reasonable (objectively) to treat that assumption of responsibility as also
extending to X.
(7) There is a high degree of proximity between P and X. P knows that the purpose of the
transaction is to benefit X, or a class of persons including X. X need not be named, but must
be ascertainable (see A.7 below). There is no indeterminate liability to an indeterminate
class.
(8) P can reasonably foresee that the X will suffer loss if P is negligent in implementing C’s
instructions. P knows that X is particularly vulnerable because, for instance, X is not party to
the instructions or is not independently advised and/or because X is a child and/or because X
has no other means of recovering any loss flowing from P’s negligence (see E.8 below). In
some cases, however, there will be conscious reliance by X on P’s exercise of skill and
competence and/or direct communication between X and C.
(9) Neither C, nor C’s personal representatives, has an effective remedy against P. The purpose
of the transaction will have been to benefit X. C will not, therefore, have suffered a
substantial loss by reason of P’s failure to benefit X. At best, C or his personal
representatives have a claim for nominal damages.
(10) X is the only person who has suffered loss, but does not have a cause of action unless the
court provides a remedy.
(11)The policy consideration that P, as a professional man, should be held liable to somebody for
his negligence, there being a public interest, for instance, in the efficient preparation of Wills
or similar documents. P should not be allowed to escape scot-free.
However, White v Jones cannot be used to impose a liability in any case on any person who has been
instructed, pursuant to a contract, to take a step, the effect of which is to benefit a third party. In
Wells v First National Commercial Bank [1998] PNLR 552 a company irrevocably instructed its bank
to make a payment of £275,000 to the claimant. The payment was not made. The claimant sued the
bank in negligence claiming that the bank owed it a duty of care to pay the claimant the sum of
£275,000. The claim was struck out. The Court of Appeal identified two key features of White v Jones
which rendered it exceptional: (1) the particular responsibility, or peculiar status, of a solicitor as a
professional man to draw up a Will in favour of a third party beneficiary; and (2) the absence of any
right of the testator to claim substantial damages if no benefit is conferred on the intended
beneficiary. The defendant bank was not a professional, exercising care and skill, in a matter such as
a Will. Furthermore, it seems that both the bank customer and the claimant had an effective remedy
in contract. There was a chain of agreements or contracts under which the claimant had an effective
claim. In any event, the circumstances were not exceptional. It was a commercial situation in which
the relationships between the parties were governed by contracts between themselves. There were
no dealings or communications between the claimant and the bank giving rise to any liability outside
contract.
2
A.2.
Summary
The House of Lords’ decision in White v Jones itself is analysed at A.3. The nature of the duty to the
beneficiaries is analysed at A.4: it is co-extensive with the contractual duty owed to the testator. The
requirement that the testator had a fixed, continuing intention, up to the date of death, to benefit
the claimants is examined at A.5. The duty is owed by any professional person who has undertaken
to prepare a Will (A.6) and can only be owed to ascertainable persons whom the testator wishes to
benefit (A.7).
In Part B instances of negligence are examined such as delay in preparing the Will (B.1). The case-law
is analysed for guidance as to reasonable periods of delay. Other instances of negligence are
explored: failure to chase up a client to execute the Will (B.2); inadequate advice as to execution
(B.3); failure to supervise execution (B.4); failure to check whether the Will was properly executed
(B.5); failure to secure an effective disposition of property, such as joint or trust property (B.6);
failure to include a provision in accordance with the testator’s instructions, including an examination
of the issue of whether it is necessary to mitigate by applying for rectification (B.7); failure to
ascertain the testator’s intentions (B.8); failure to give competent advice, including tax advice, in
connection with the Will (B.9); whether there is a duty to advise beneficiaries of their entitlement
(B.10); delay in obtaining a grant (B.11); failure to notify personal representatives (B.12); and breach
of duty not to act (B.13).
Part C examines the position where the professional’s negligence has given rise to a probate claim to
set aside the Will on the grounds of lack of testamentary capacity (C.1), want of knowledge and
approval (C.2), undue influence (C.3) or lack of testamentary intent (C.4). The allegation will be that
the professional ought, in the circumstances, to have declined to act. The relevant loss will be the
costs in the probate proceedings of the beneficiaries under the probated Will. As such, the action is
distinct from a classic White v Jones claim by disappointed beneficiaries of a defective or nonexistent Will for the amount of their entitlement under such a Will. The nature and extent of a
solicitor’s duty to inquire into testamentary capacity is examined, as are the circumstances in which
a solicitor should or should not refuse to act. Practical advice is given (C.1.7).
Consideration is given to the issue of whether the beneficiaries of the probated Will, or the personal
representatives, are entitled to claim the costs of the probate action (C.5). The interrelationship
between a claim for the costs of a probate action, and a claim by disappointed beneficiaries, is
considered (C.5.5). Issues of causation and loss are examined (C.5.7).
Part D deals with claims by personal representatives, and the problem of double liability. Cases of
liability to personal representatives are explored (D.1). The key characteristic of such a claim is that
the estate has suffered loss. In a classic White v Jones case the estate has suffered no loss. The
problem of double liability (to personal representatives and beneficiaries) is analysed by reference
to the decided cases (D.2). Practical advice is given as to who should be parties to a claim where the
estate has suffered loss.
Part E examines cases where White v Jones has been applied (or not as the case may be) to lifetime
transactions, or otherwise than in the context of the negligent preparation of a Will. The House of
Lords in White v Jones made a number of obiter comments to the effect that a solicitor could not be
liable for a defective lifetime gift since the client would be able to perfect the gift, or claim damages
from the solicitor, during his lifetime (E.1). This principle is examined in the case of imperfect gifts
(E.3) and misdirected gifts (E.4). A number of cases are explored where the courts have imposed
liability to third parties in respect of lifetime transactions, such as gifts to trusts which fail to confer
an intended benefit (E.5), defective pension advice (E.7), advice commissioned by one party
affecting another non-contracting party (E.8), failure to advise that notice of severance of a joint
tenancy should be served (E.9). Cases in which the courts have refused to apply a White v Jones
3
liability are also examined, such as Clarke v Bruce Lance & Co (E.10) and Cancer Research Campaign
v Ernest Brown (E.11).
In Part F there is a full analysis of the potential liability of tax-advisers to beneficiaries or personal
representatives of estates which have incurred IHT liability in respect of defective IHT lifetime
planning. The estate will incur an IHT liability where X makes a gift to X’s children, but continues to
reserve a benefit for IHT purposes. This may give rise to a claim against professionals who have
failed to advise as to such a liability, or who have failed to avoid such a liability.The leading cases of
Daniels v Thompson and Rind v Theodore Goddard are considered in detail. The issue of limitation is
addressed (F.7.4) and practical advice given as to who should bring the claim (F.7.5).
Part G considers issues such as limitation in a classic White v Jones claim (G.1), and causation and
loss (G.2). Contributory negligence (G.3) and mitigation (G.4) are also explored.
Part H examines the issue of whether beneficiaries of a trust can or should sue a professional who
has given negligent advice in connection with the trust. A claim by a beneficiary is a claim by a noncontracting party and is, to that extent, not unlike a White v Jones claim.
A.3.
The decision in White v Jones
A solicitor or professional Will draftsman clearly owes a duty in contract and tort to his client to
exercise reasonable care and skill in relation to the proposed Will. But is there a duty owed to the
beneficiaries of the Will if, for instance, the Will is not executed prior to the death of the client due
to negligent delay on the part of the solicitor? Can a beneficiary, who would have received a legacy
under the proposed Will, recover damages from the solicitor for the loss of the legacy?
It was long thought that no duty was owed to a disappointed beneficiary on the basis that the
solicitor only owed a duty in contract, and that there was no privity of contract with the beneficiary.
However, in Ross v Caunters [1980] Ch 297 Megarry V-C held that a solicitor (who was responsible
for the defective execution of the Will) owed a duty of care in tort to the disappointed beneficiary
pursuant to the two-fold test in Anns v Merton [1978] AC 728: the beneficiary, who had suffered loss
by reason of the solicitor’s negligence, was a person within the direct contemplation of the solicitor
as being likely to be injured by a failure to carry out the testator’s instructions, and there were no
considerations to negative or limit the scope of the duty.
In White v Jones [1995] 2 AC 207 the House of Lords, by a majority, confirmed that the beneficiaries
of an intended Will may have a remedy in damages against a solicitor by whose negligence they have
suffered loss . The defendant solicitor had negligently delayed in implementing his client’s
instructions to amend the client’s Will, so as to include legacies in favour of his two daughters. The
client died before a new Will was executed. The daughters sued the solicitor for the amount of the
lost legacies. Their claim was upheld.
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 key point was the extraordinary fact that, if a duty of care to the disappointed beneficiary was
not recognised, the only persons who might have a valid claim (the testator and his estate) had
suffered no loss, and the only person who had suffered a loss (the disappointed beneficiary) had no
claim. If, therefore, the solicitor owed no duty to the intended beneficiary, there was a lacuna in the
law which needed to be filled. There was, therefore, an impulse to do practical justice by giving the
beneficiary a remedy. It would be unacceptable if, because of some technical rules of law, the wishes
and expectations of testators and beneficiaries generally could be defeated by the negligent actions
of solicitors without there being any redress.
4
It did not matter that the beneficiaries had not relied upon the solicitor, as the foundation of liability
is an assumption of responsibility by the solicitor. As Lord Browne-Wilkinson said, what is important
is not that A knows that B is consciously relying on A, but that A knows that B’s economic well being
is dependent upon A’s careful conduct of B’s affairs (272A). Since the solicitor had assumed a
responsibility to do something, it was no objection that there is generally no liability in tort for a
pure omission unless the defendant is under a pre-existing duty.
A.4.
Duty to beneficiaries dependent on duty to testator/exclusion clauses
The duty owed to the beneficiaries is not independent of the duty owed to the testator. White v
Jones departs in this respect from Ross v Caunters where there was held to be a direct, independent
duty of care owed to the disappointed beneficiary. As Chadwick L.J. said in Carr-Glynn v Frearsons
[1999] Ch 326, at 337E:
The duty owed by the solicitor to the specific legatee is not a duty to take care to ensure that
the specific legatee receives his legacy. It ... is a duty to take care to ensure that effect is
given to the testator's testamentary intentions.
In consequence: (a) the duty owed in tort by the solicitor to the intended beneficiary and the duty
owed in contract by the solicitor to his client are for all practical purposes one and the same; and (b)
the nature and extent of the duty is determined by any terms of the retainer which may exclude or
restrict the solicitor’s liability to the testator (White v Jones [1995] 2 AC 207, at 268G-H; Trusted v
Clifford Chance [2000] WTLR 1219, at 1256).
It follows that: (a) conduct on the part of the solicitor which amounts to a breach of his contractual
duty towards his client must also amount to a breach of his tortious duty towards the intended
beneficiary; and also that (b) unless the solicitor is in breach of his contractual duty towards his
client, he cannot be in breach of his tortious duty towards the intended beneficiary. Therefore, it has
been said that no tortious duty will arise in favour of the intended beneficiary unless and until the
testator has: (a) decided to confer on the intended beneficiary a particular testamentary benefit;
and (b) retained a solicitor for that purpose (Trusted v Clifford Chance [2000] WTLR 1219, at 1256-7).
The proper analysis is that the only duty owed by a solicitor is to the testator, but if (a) he was in
breach of that duty; and (b) a claimant did not receive a benefit under the testator’s Will which he or
she would have received if the defendant had not been in breach of that duty, then at least, on the
face of it, the claimant may have a claim for damages arising out of the defendant’s breach of duty
to the testator (per Neuberger J, X v Woolcombe Yonge [2001] WTLR 301, at 307).
In White v Jones [1995] 2 AC 207 Lord Goff considered that the assumption of responsibility by a
solicitor would be subject to the terms of the contract between the solicitor and the testator which
may exclude or restrict the solicitor’s liability to the testator (268G-H). If, therefore, the solicitor and
the testator have agreed that no action needs be taken to prepare the Will during a specific period,
e.g. because the solicitor will be away from work during that period, the solicitor cannot be liable to
the beneficiary if the solicitor dies within that period (Trusted v Clifford Chance [2000] WTLR 1219).
It is not so clear whether the same principle applies to a lifetime transaction, e.g. where a firm of
accountants have, pursuant to a contract with a company, undertaken a valuation of the shares of a
shareholder for the purposes of a buy-back of those shares by the company. In Kilick v
Pricewaterhouse [2001] PNLR 1 (see E.8 below) there was a clause in the contract between the
company and the accountants limiting liability. The shareholder sued the company alleging loss as a
5
result of a negligent undervaluation. Neuberger J declined to hold, on a summary judgment
application, that the defendant firm of accountants could clearly not take advantage of the
contractual provision, limiting their liability in respect of a valuation of shares, so as to limit its
tortious liability to the shareholder.
It also follows that a solicitor will not be liable to a beneficiary for failing to prepare a Will where the
solicitor has declined to accept the retainer on the grounds of the testator’s lack of testamentary
capacity (see the Canadian case of Hall v Estate of Bruce Bennett [2003] WTLR 827).
A.5.
Fixed, continuing intention
It may be that the instructions never became fixed and final. In Trusted v Clifford Chance [2000]
WTLR 1219 the testator never reached the position where he could give the solicitor definite and
comprehensive instructions as to the dispositions of his estate to be effected by his proposed Will
(1257G). There was, therefore, no liability.
Even if clear and final instructions are given, there may be an issue as to whether the testator’s
intention remained fixed up to the date of his death. Such an intention may, however, be inferred. In
Bacon v Kennedy [2001] WTLR 169 instructions for a Will were given an astonishing 9 years before
the deceased’s death; no Will was executed in the meantime. The deceased had repeated his
instructions, and it seems to have been assumed that his intention remained fixed until his death
(there being no evidence to the contrary).
This issue has been explored in Humblestone v Martin Tolhurst Partnership [2004] PNLR 26 in the
context of a claim that a solicitor was responsible for the defective execution of a Will. It was there
argued, on behalf of the solicitor, that the burden was on the claimant to prove that the testator’s
testamentary intention continued up to his death, and that it was to be inferred that he had changed
his mind subsequent to the defective execution of the Will. Mann J saw no reason in principle why,
in every case, it should be necessary for the claimant to establish such a continuing intention. Where
the testator did intend a disposition in favour of a beneficiary, it did not suffice to show that a
degree of equivocation had crept in. It had to be apparent that there was some actual change of
mind, rather than the creation of a generally open one. However, it was accepted that in a given
case, a change of testamentary intention, coupled with other factors, could break the chain of
causation.
A.6.
By whom duty owed
The duty is owed by any professional person who has undertaken the preparation of a Will or has
advised in regard to a Will intending to benefit a third-party, or to any company offering itself out as
offering a similar Will-making service to a solicitor (Esterhuizen v Allied Dunbar [1998] 2 FLR 668). In
this paper, references to solicitors should, therefore, be taken to include Will draftsmen.
A.7.
To whom duty owed
The duty is owed to the testator and by extension to the beneficiaries of the Will. In a normal case
where the claim is that the solicitor has delayed in producing a Will, or has been responsible for a
defective Will, there will be no difficulty in satisfying this test: the testator will have instructed the
solicitor of his wish to benefit identifiable beneficiaries.
6
However, in Gibbons v Nelson [1999] Ch 326 the claim was the solicitor had negligently failed to
advise the testatrix that she could exercise a power of appointment by her Will over a half share in a
trust fund. The claimant claimed that the testatrix, if properly advised that she could do so, would
have exercised the power in favour of the claimant. The Judge held that it was not sufficient to give
rise to an assumption of responsibility by the solicitor to the claimant that the solicitor was: (1)
aware of the trust fund (2) aware of the claimant’s existence and (c) aware, if he thought about the
matter, that the testatrix might possibly wish to appoint some or all of her share in the trust fund to
the claimant.
It was necessary that the solicitor should know: (1) what the benefit is that the testator wishes to
confer and (2) 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. That test was not satisfied in
Gibbons as the testatrix had never given any consideration to benefiting the claimant. There was
simply no evidence as to her intentions with regard to the power of appointment. This does mean,
however, that the test may well be impossible to satisfy in any case where the claim is that the
testator did not benefit the claimant due to the solicitor negligently failing to advise that the testator
had power to do so. The decision in Gibbons is, therefore, questionable on this point.
As to whether a duty is owed to the personal representatives of the Will to the personal
representatives of a previous, valid Will, see D.1 below.
B.
B.1.
INSTANCES OF NEGLIGENCE
Delay in preparing Will
A solicitor, instructed to prepare a Will, is under a duty of reasonable care to present the Will for
execution within a reasonable time. If the testator dies or becomes incapable before the Will has
been so presented, and the delay is unreasonable in all the circumstances, the solicitor may be liable
in damages to an intended beneficiary who has suffered loss by reason of the delay. Time will start
to run from the date when the testator makes the solicitor aware that he wants to make a Will
(Smith v Claremont Haynes & Co, Times, 3 Sept, 1991, where the testator was suffering from
leukemia. The solicitor failed to attend on the testator to take formal instructions for 33 days by
which time the testator had become incapable. Such delay plainly amounted to negligence).
White v Jones was itself a case of delay in drafting the Will. In that case there was a delay of 59 days
between the giving of written instructions and the death of the 78 year-old testator. Such delay, not
surprisingly, was held to be unreasonable. However, there was no consideration as to what time
period would normally be regarded as reasonable.
In the New Zealand case of Gartside v Sheffield Young & Ellis [1983] NZLR 37 the testatrix was 89,
and had recently had a fall. She died 10 days after first informing the solicitor that she wished to
make a Will, 7 days after giving formal instructions. A claim to strike out the claim failed.
In X v Woolcombe Yonge [2001] Lloyds Rep PN 274 a delay of 6 days between request for
appointment and death was held not to be unreasonable in the case of a hospitalised 55 year old,
terminally ill, cancer sufferer with no imminent expectation of death. Neuberger J emphasised that
where the client is old or ill, the delay which may be acceptable will obviously be less than in the
absence of age or illness. Where, however, there is a real prospect (which may be less than a 50%
chance) of imminent death, it may be negligent not to draw up a Will or Codicil, if necessary by hand,
for immediate execution, as a holding operation. In any event, the solicitor had prepared a Will
which would have been ready for execution in 8 days. The solicitor took a view, which a reasonable
solicitor could perfectly well have taken, that this was not an unreasonable period of delay, given
that there was no reason to suspect that imminent death would occur.
7
In Doidge v Bright Broad & Skinnard, The Lawyer 20 April 1993, there was a delay of 15 days
between the request for an appointment and the Will being engrossed. The testatrix died, before
the Will was executed, after 18 days. She was 92, but not obviously in bad health. The delay was
held not to have been unreasonable, given the state of the testatrix’s health. This may be regarded
as a generous decision to the solicitor, given the age of the testatrix.
In Carr-Glynn v Frearsons [1992] 2 WLR 1046 the 81-year old testatrix wished to leave her share in a
property, owned jointly with her nephew to her niece. The solicitor was in some doubt as to whether
the testatrix and her nephew were joint tenants or tenants in common beneficially. The solicitor
advised that the deeds should be checked, which the testatrix agreed to do. The Court of Appeal
held that this was negligent advice: the testatrix should have been advised to serve a notice of
severance in any event. There was nothing to be gained, and much to be lost, by delay. The moral of
the tale, particularly in the case of an elderly client, is not to delay any longer than necessary without
good reason. However, arguably, there was no compelling urgency in Carr-Glynn that could not have
awaited the outcome of the testatrix’s investigations.
It is dangerous for a solicitor to cancel an appointment with an elderly client, who is in hospital,
without making inquiries as to the state of the client’s health, so as to be satisfied that any
additional delay will not be to the detriment of the client (see Hooper v Fynmores [2001] WTLR 169).
In Hooper the solicitor cancelled an appointment, for the Will to be executed, due to his own
hospitalisation. However, if (as he should have done) he had made enquiries, he would have
discovered that the client was gravely ill, and he could have arranged for another solicitor to attend.
There was a delay of about 12 days between the request for an appointment and the death of the
client. This amounted to negligence in the case of an 83 year old client, who had been in hospital for
about 1 month when the appointment was requested.
In Bacon v Howard Kennedy [2001] WTLR 169 the testator gave instructions for a new Will in 1986
and again in 1987. He died in 1995. It is not clear why he did not follow the matter up between 1987
and 1995. He may have thought that a Will had been executed. In any event, it would not be safe for
a solicitor to conclude, from lack of any response from the client, that the client no longer wishes to
proceed. The solicitor should clarify the position with the client.
The solicitor will not be liable to a beneficiary in respect of any period of delay to which the client
consents (Trusted v Clifford Chance [2000] 1 WTLR 1219). However, the client should be given the
chance to instruct another solicitor if such delay is unacceptable. His consent should also be given in
writing.
There may be reasons for delay, e.g. the need to take tax advice. If so, the client should be advised
as to the possibility of making a holding Will, and there should be an agreed time-frame for the
production of the Will based on a full consideration of the tax position.
In conclusion, there is no standard period of reasonable delay. However, in the case of a client who
is not old or ill, a period of up to 14 days between initial contact and production of the Will for
execution might be thought to be reasonable. If, however, the client is either old or ill, 7 days might
be more appropriate. If there is a real risk of imminent death or incapacity, it may be negligent not
to prepare a Will immediately.
B.2.
Failure to chase up client to execute Will
It is not clear to what extent there is a duty to chase up a client to execute a Will which has been
sent to the client for execution. In Atkins v Dunn & Baker [2004] WTLR 477 a draft Will was sent to
the client seeking his approval prior to preparing the engrossment. There was no response from the
8
client, who died intestate 3 years later. The Court of Appeal held that “in the circumstances of this
case” the Recorder had been entitled to hold that the ball was in the client’s court and that the
failure to send a reminder did not constitute such a fall below the standard to be expected of a
competent solicitor as to amount to negligence. However, it was accepted that there will often be
situations where there is a duty to send a reminder to the client. However, the circumstances in
which such a duty would arise are not spelt out. It would no doubt be advisable to send a reminder
letter if nothing has been heard after, say, 7 days.
B.3.
Inadequate advice as to execution
There is a clear duty to take proper care in advising the testator as to the procedure to be
followed for the valid execution of a Will, if the solicitor is not to be present at the execution (Gray
v Richards Butler [2000] WTLR 143, at 157D). Clear written instructions (it is suggested, in a
standard form) should be given to the testator as to mode of execution.
If there is a failure to advise clearly or at all as to proper execution, the breach of which invalidates
the Will, there may be a liability to a disappointed beneficiary (see Ross v Caunters [1979] 3 All ER
580 where there was a failure to advise that the witnessing of the Will by the spouse of the
beneficiary would invalidate the gift). If the solicitor does actually supervise execution, but fails to
ensure that the Will was validly executed, the solicitor will be liable to the disappointed
beneficiaries (Hill v Van Earp (1977) 71 AJLR 457).
In Corbett v Newey [1998] Ch 57 the testratrix signed, but did not date, her Will. She returned the
undated Will to her solicitors who knew that she intended that it should not to be dated and was
only to take effect once certain inter vivos gifts had been completed. The solicitors duly dated the
Will only after the lifetime gifts had been completed. The Will was set aside on the basis that the
testatrix did not have any animus testandi when she signed the Will because she did not intend it
to have immediate effect. The costs of the parties were payable out of the estate. An action was
commenced by the residuary beneficiaries of the Will claiming that the solicitors owed them a
duty of care to ensure that the Will was validly executed. The claim was compromised on terms
that the claimant beneficiaries received the full amount of their entitlement under the Will
undiminished by the costs of the probate action. The solicitor was liable to the disappointed
beneficiaries on classic White v Jones grounds: the testator had intended to benefit the
beneficiaries by her Will, but had not done so due to the negligence of the solicitors who had
failed to advise her that the Will was not validly executed. There was then a further claim by the
personal representatives of the last true valid to recover the costs of the probate action (see
C.5.5. below).
B.4.
Failure to supervise execution
B.4.1. Is there a duty to supervise?
In Esterhuizen v Allied Dunbar Assurance [1998] 2 FLR 668 it was held that the solicitor has a duty to
supervise the execution of the Will personally. In that case the Will, in favour of two friends of the
testator, was invalid because it was not attested by two witnesses in accordance with the Wills Act
1837. The entire estate passed on intestacy to the testator’s adopted daughter. The testator had
been advised in writing that two witnesses were required. However, Longmore J determined that to
leave written instructions and do no more was not enough. There was a duty to take reasonable
steps to assist the testator in the execution of his Will, by inviting the testator to the Will-preparer’s
offices to execute the Will, or by visiting his home with another member of staff. A testator can
9
expect reasonable assistance in regard to the process of execution and attestation, even if no
express request for such assistance is made.
The decision in Esterhuizen may appear somewhat harsh, given that clear written instructions were
given to the testator as to the need for two witnesses; Longmore J commented that the testator
probably understood this advice; and the standard attestation clause makes it clear that two
witnesses are required. Alternatively, the requirement to supervise execution should be limited to a
case where the solicitor has reason to believe that the testator is incapable of arranging execution
for himself.
Esterhuizen is also inconsistent with Gray v Richards Butler [2000] WTLR 143. In Gray the Will was
invalid as the witnesses were not both present at the same time when the testatrix signed the
Will. The Will had been left with the client for execution. However, the solicitor had left with the
testatrix a standard set of instructions on execution, described by Lloyd J as “most
comprehensive”. The solicitor’s conduct was held not to have fallen short of that required of a
reasonably competent solicitor. Gray J also commented (158C) that the attestation provision in
the Will made clear the vital need for the witnesses to be present together when the testatrix
signed the Will (a point supported by Re Groffman, Groffman and Block v Groffman [1969] 2 All ER
108 at 109).
B.4.2. Testator’s competence to follow instructions
There is some difference in view between the first instance High Court Judges in Gray and
Esterhuizen as to the relevance of the testator’s apparent competence to understand instructions.
In Esterhuizen the testator was found to have lacked the intellectual equipment or frame of mind to
arrange execution for himself. Longmore J decided that the solicitor should personally have
supervised execution. However, he does not seem to have based this conclusion on the client’s lack
of capacity. He stated that it was not sufficient to leave written instructions even “in ordinary
circumstances” which must, presumably, include circumstances where the testator is clearly capable
of following instructions. He also rejected the suggestion that the extent of the duty might depend
on how competent or intelligent the testator was perceived to be (but somewhat confusingly
conceded that that “actual performance” of the duty might vary according to the solicitor’s
perception of his client).
In Gray, Lloyd J considered that the extent of the solicitor’s duties in any given situation may depend
on who the client is and the view that the solicitor has formed, or ought to have formed if acting
with reasonable competence, as to the ability of the client to understand and follow advice as to the
relevant procedures (157E-F). Although there was evidence from a friend, and also from the son, of
the testatrix that executing the Will without expert help would have been an “unclimbable
mountain” for the testatrix, Gray J found that she was not stupid and that she was capable of
following procedures, such as those involved in the valid execution of a Will, if they were properly
explained to her. In any event, in assessing a person’s capacity, the standard to be applied was the
knowledge gathered by a competent and careful private client solicitor, and not the insight of one
who had known the testatrix socially from time to time, still less that of a close family member. It
was, therefore, sufficient to give written instructions as to execution to the testatrix.
It is submitted that Lloyd J’s approach in Gray is to be preferred. It is generally accepted that the
extent of the duty to advise may depend upon the experience or intelligence of the client as it
appears to the solicitor (see Carradine Properties v Freeman (1985) 1 PN 41).
10
B.4.3. Resolution of Gray and Esterhuizen
However, a possible resolution of Gray and Esterhuizen may be that, where the client is
reasonably perceived as being capable of following clear guidance as to execution, it is sufficient
to give such clear guidance in writing. If, on the other hand, there is any reason to believe that the
client is not so capable, the solicitor should supervise execution. Nonetheless, to be on the safe
side, a solicitor might reasonably consider that he should, in every case, supervise execution,
unless the client agrees in writing that this is not required.
B.5.
Failure to check whether Will properly executed
If the solicitor has not supervised execution, he will be under a duty, if and when the Will is
returned to him, to examine it to see whether it appears to be properly executed (Gray v Richards
Butler [2000] WTLR 143, at 157D-E). In Gray the witnesses had not, in fact, witnessed the
testatrix’s signature at the same time in her presence. It was submitted that the solicitor should
have been put on notice that there was something wrong with the execution of the Will by a
number of circumstances, including the fact that one of the witnesses was a neighbour, and the
other witness a financial manager with the testator’s bank (Coutts), whose address was in another
part of London. However, the Judge regarded those circumstances as minor irregularities which
were not such as to put a reasonably competent solicitor upon enquiry that there was any real or
substantial possibility that the Will had not been validly executed. The solicitor was entitled to
obtain reassurance from the fact that an employee of Coutts was one of the attesting witnesses,
since it would be extremely unlikely that such a person would fail to insist on the correct
procedures being followed.
In Humblestone v Martin Tolhurst Partnership (a firm) [2004] EWHC 151 the Will was checked by a
secretary, who found it to be in order. In fact, the testator had not signed the Will. The Judge
considered that the normal fulfilment of a retainer would require the solicitor, when the
document was returned for safe keeping, to check that, on its face, and on the facts then known
to him, its execution was ostensibly valid. Furthermore, as the normal practice of the solicitor’s
firm was to check returned Wills, it had, in any case, assumed a duty of care to check competently.
Whether it is necessary to ask for the return of the Will for checking is not clear. However, it might
be a prudent step if the solicitor has not supervised execution.
B.6.
Failure to secure effective disposition of property
B.6.1. Joint property
If the testator’s instructions are to include a gift of the testator’s share in joint property, in which the
testator has or may have a beneficial interest passing outside the Will by survivorship on the
testator’s death, the solicitor is under a duty to advise the testator to sever the joint tenancy, e.g. by
serving a notice of severance on the other joint tenant. The service of such a notice is part of the
Will-making process.
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. 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 solicitor was aware that the property was in joint names and might be
jointly owned beneficially, but advised that the deeds should be obtained so as to check whether
there was a beneficial joint tenancy or tenancy in common. The Court of Appeal found that this
11
advice was negligent: the correct advice should have been to sever in any event given that the
testatrix was likely to die before her nephew. There was nothing to be gained by waiting, and a real
risk that her intentions might be defeated by delay. The Judge had found that if advice to sever
immediately had been given, the testatrix would have accepted that advice. The solicitor was held
liable to the niece.
This conclusion is, perhaps, somewhat harsh on the solicitor. The advice to check the deeds before
severance does not seem so unreasonable as to amount to negligence. Furthermore, the testatrix
offered to obtain the deeds herself, and then failed to do so. Should the solicitor have insisted that
the testatrix serve an immediate notice of severance, rather than taken up the testatrix’s offer? The
conclusion that the testatrix would have accepted advice to sever in any event is also questionable.
She had an understandable reluctance to serve a notice of severance on her nephew, and did not, in
fact, serve a notice in the following 4 years before her death.
In Kecskemeti v Rubens Rabin & Company, The Times, 31 Dec 1992, the defendant solicitor was held
to have acted in breach of duty in failing to ascertain that the interest of the testator in two
properties which he wished to dispose of by Will was that of a beneficial joint tenant, and to advise
him that, if the gift was to be effective, he would have to sever the joint tenancies. The testator
failed to sever the joint tenancies with the result that the testator’s interest passed by survivorship.
The claimant was someone who would have benefitted under the testator’s Will if the joint
tenancies had been severed.
Both the solicitor and the testator wrongly believed that the properties were subject to tenancies in
common. However, it was no defence that the solicitor was acting on his client’s instructions. The
Court held that it would have been obvious to the solicitor from a look at the Land Registry
documents that this was a beneficial joint tenancy. This indicates that there may be a duty to
investigate the true position as to beneficial ownership, rather than simply accepting the testator’s
instructions. However, whether it is sufficient that the correct information is readily available, or
whether there must be something to put the solicitor on notice that the testator is mistaken, is a
moot point (but see Earl v Wilhelm, at B.6.2 below).
B.6.2. Trust property
In the Canadian case of Earl v Wilhelm (2000) 183 DLR (4th) 45 the testator instructed his solicitor to
prepare a Will including specific bequests of areas of farmland to various persons. The Will was
validly executed. However, the specific bequests of land were ineffective, as the testator had no
beneficial interest therein: he held the land on trust for a farming company controlled by himself (as
the solicitor knew). The solicitor was liable to the beneficiaries for loss consequent upon their
failure to receive the specific bequests of land. The Court held that, if the testator had been advised
that the beneficial ownership of the land was vested in his farming company, he would have made
arrangements to ensure that effect was given to his wishes.
Notably, it was not a defence that the lawyer was acting on the testator’s instructions in including
the specific bequests of the farmland in the Will. The Court commented that it was not a sufficient
discharge of a solicitor’s duty to a testator in circumstances such as these to simply enquire of him
what he wishes and then to record and thereafter prepare the Will without anything further. That
would be to relegate a solicitor and his obligations to that of a “parts counterman or order-taker”.
The public is entitled to expect more from the legal profession.
Certainly, if the solicitor knows that the testator does not have beneficial ownership of an asset of
which the testator wishes to dispose, he must so advise; similarly if the testator only has a limited
12
interest (such as a life interest). There is probably also a duty to advise that suitable enquiries be
made to ascertain the true position, if the solicitor has notice of any facts which might indicate that
the testator is not competent to dispose of the asset.
B.7.
Failure to include provision in accordance with testator’s instructions
B.7.1. Duty and breach
If a testator instructs a solicitor that he wishes to make a testamentary gift of his interest in an asset
to X, and the Will fails to carry out the testator’s intention in that regard, the solicitor may be liable
in damages to X.
B.7.2. Convincing evidence
However, the burden is on the disappointed beneficiary to prove, by “convincing evidence” (Walker
v Medlicott & Son [1999] 1 WLR 727, at 731H, 738A) that the testator instructed the solicitor to
confer the relevant benefit on the beneficiary, and that the solicitor negligently failed to carry out
those instructions.
This may provide real difficulty as the decision in Walker v Medlicott & Son illustrates. In Walker
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 issue was whether the claimant had proven, 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.
However, if there is a misunderstanding, the solicitor may be liable if the Court finds that there has
been a negligent failure to clarify the instructions which have been given (Gray v Buss Merton [1999]
PNLR 882).
In Martin v Triggs Turner Bartons [2010] PNLR 3 the claimant succeeded in overcoming the evidential
hurdle of proving convincingly that a power of advancement contained in her husband’s Will trust
had not been drafted in accordance with her husband’s instructions. The claimant had attended the
meeting at which the instructions were given. There was a conflict between her evidence and that of
the solicitor. The Judge preferred the claimant’s evidence. The solicitor had not kept a proper
attendance note.
13
B.7.3. 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 if 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 fail.
In Walker the solicitor had not offered an indemnity in respect of the costs of the rectification claim.
It was also accepted that a claimant need not take the risk of starting uncertain litigation against a
third party (Pilkington v Wood [1953] Ch 770). However, in Pilkington, the defendant was admitting
negligence and yet contending that the claimant should embark on complicated litigation with only
doubtful prospects of success. By contrast, in Walker, the defendant was denying negligence and
contending correctly that the claimant would have no greater difficulty in establishing claim for
rectification than in establishing liability against him.
Walker v Medlicott was distinguished in Horsfall v Haywards [1999] 1 FLR 1182. In Horsfall the
claimant’s uncle instructed the defendant solicitors to prepare a Will leaving his house to X for life,
with the remainder to the claimants. Due to the solicitor’s admitted negligence, the Will left the
house to X absolutely. By the time the mistake came to light, X had sold the house and emigrated to
Canada with the sale proceeds. The court was prepared to proceed on the basis that a rectification
claim would be likely to succeed. However, the question was whether the claimant had failed to take
reasonable steps, in not bringing rectification proceedings and in not seeking to negotiate with X.
The claimant had acted reasonably in not instituting rectification proceedings. Such proceedings
would have had to have been commenced in Canada; they would have been resisted; and the costs
would probably have extinguished the entirety of the fund. The rectification proceedings in
themselves would not have resulted in any material recovery of the funds (without further action to
recover the sale proceeds). In any event, by the time that the claimant became aware of the
mistake, the capital of that trust fund had been made available to X in Canada, and the 6-month
time limit for rectification proceedings had expired. The claimant had not taken proceedings within
the jurisdiction, within time, as the defendant solicitor, who acted in the administration of the
estate, had not advised as to the possibility of rectifying the Will.
14
B.7.4. 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. It may also be possible to claim damages equal to the
difference between the value of benefits under the Will, following the reasonable compromise of a
rectification claim, and the value of such benefits if there had been no negligence (see the special
facts of Martin v Triggs Turner Bartons [2010] PNLR 3).
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 negligence 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.
B.7.5. Clerical error/failure to understand instructions
It is clearly important to identify whether the case is an appropriate for a rectification claim because,
if so, that claim should normally be pursued in preference to negligence proceedings.
There are 3 relevant questions: (1) what were the testator’s intentions with regard to the
dispositions in respect of which rectification is sought; (2) whether the Will is so expressed that it
fails to carry out those intentions; and (3) whether the Will is expressed as it is in consequence of
either (a) a clerical error or (b) a failure on the part of someone to whom the testator has given
instructions in connection with his Will to understand those instructions (Re Segelman [1996] Ch
171, at 180). Although the standard of proof required in a claim to rectification is the balance of
probabilities, the probability that a Will which the testator has executed in circumstances of some
formality reflects his intentions is usually of such weight that convincing evidence to the contrary is
necessary (Re Segelman, at 184). Speculation is no basis upon which to interfere with a formal
expression of testamentary intentions.
Therefore, in the case of both a rectification and a negligence claim, it is necessary to adduce
convincing evidence that the Will does not express the testator's intentions.
The courts have given a wide meaning to the term “clerical error”. In Wordingham v Royal
Exchange Trust Co Ltd [1992] Ch 412 the testatrix instructed her solicitor to draft a new Will
making changes to her previous Will concerning specific bequests, but otherwise leaving the
provisions of the previous Will intact. The solicitor drafted the new Will, but by mistake excluded a
provision, contained in the previous Will, exercising a power of appointment. A clerical error was
defined to mean an error made in the process of recording the intended words of the testator in
the drafting or transcription of the Will. The failure to copy the provision exercising the power of
appointment, from the previous Will into the new Will, amounted to a clerical error. Where it is
alleged that words have inadvertently been omitted, rather than inserted, there may be a greater
potential for characterising the error as one of a clerical nature (Pengelly v Pengelly [2008] Ch 375,
at 383).
There will also be a clerical error where the relevant provision – by reason of which the Will is so
expressed that it fails to carry out the testator’s intentions - has been introduced, or not been
15
deleted, in circumstances in which the draftsman has not applied his mind to its significance or
effect (Clarke v Brothwood [2007] WTLR 329 where the testatrix had intended to give 20% of her
residuary estate to each of her 4 godchildren). The Will provided for gifts to the 4 godchildren of
1/20 (not 20%) of the residuary estate, which had the effect that 60% of her estate remained
undisposed of. Even if the testatrix had said 1/20, and the solicitor had correctly recorded 1/20,
there would be still have been a clerical error since, if the solicitor had applied his mind to the
problem, he would have appreciated that the testatrix could not have meant 1/20.
Rectification may be ordered under s. 20(1)(b) AJA 1982 where there is no clerical error, i.e. where
the error is caused by the solicitor’s deliberate choice of words, if that choice of words is caused by
the failure to understand the testator’s instructions (see Wordingham v Royal Exchange Trust Co Ltd
[1992] Ch 412, at 419). Therefore, if it can be proved by convincing evidence that the Will contained
an error caused by a failure to understand instructions, rectification will be available (see Sprackling
v Sprackling [2009] WTLR 897).
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, at 184). Such an error is not caused by a failure to understand the
instructions. Nor is it a clerical error. In that event, the appropriate remedy of any beneficiary
suffering loss by reason of the error is a negligence claim against the Will draftsman. Rectification
will not be available.
Nor will rectification be an appropriate remedy where the solicitor has failed to take the testator’s
instructions, as opposed to failing to understand instructions that have been given (Littlewood v
Wilkinson Woodward [2009] PNLR 29, at para. 33; see B.8.3 below).
B.8.
Failure to ascertain testator’s intentions
B.8.1. Duty to ascertain testator’s instructions on relevant matter
The solicitor’s negligence may consist in a failure to take the testator’s instructions on a material
matter, as opposed to a failure to understand instructions that have been given, or a clerical error in
recording those instructions.
In Gibbons v Nelsons [1999] Ch 326 the testatrix had a power of appointment by deed or Will over a
half share in a trust fund, the principal asset of which was a house in which her sister, the claimant,
lived with the testatrix. Her Will contained a gift of her residuary estate, including any property over
which she might have a general power of appointment by Will, in favour of charities. The solicitor
did not advise the testatrix that she had a power of appointment over a half share in a trust fund,
nor that the gift of residue effected an appointment in favour of the charities. Indeed, there was
some evidence that the solicitor did not appreciate the effect of the residuary gift.
The Court found that there was nothing to limit the scope of the solicitor's duty. He should therefore
have ascertained what the client's intentions were with respect to her half share of the trust fund.
He was aware of the testatrix’s power of appointment. It was, therefore, his duty to remind her that
she had this power and to ascertain from her whether she wished to exercise it and if so in whose
favour; and to remind her of the consequences of not exercising the power.
16
B.8.2. Proof of testator’s intentions
However, the claim in Gibbons v Nelsons failed since there was not sufficiently unequivocal evidence
as to the testatrix’s intention that the trust fund should go to the claimant. The Judge accepted that
convincing evidence was required as to what the testatrix would have done if properly advised.
However, there was no real evidence, let alone convincing evidence, that the testatrix intended
leaving her half share of the trust fund to her sister, or to anyone else for that matter. There was
certainly no written record. The claim, therefore, failed, even though it was a reasonable assumption
that she did not intend to leave her half share to the charities.
In any case, no duty was owed to the claimant as the there was no evidence that the testatrix made
the solicitor aware of any intention that the claimant should benefit from her exercise of the power
of appointment (see A.7 above).
This conclusion does seem generous to the solicitor. The only reason that the testatrix had not made
the solicitor aware of any intention to benefit the claimant was that she was not advised as to the
possibility of benefiting the claimant. However, on the balance of probabilities, it must have been
likely that the testatrix would have appointed her half share in the property, in which she had
cohabited with her sister, in favour of her sister.
There may, however, be a distinction between cases such as Gibbons and Littlewood (see B.8.3
below) where the claim is that the testator would, if properly advised, have made some different
provision from that in the Will (which would require convincing evidence of a contrary intention);
and a case such as Sutherland (see B.8.3 below) where the testator had made no provision at all in
the events that had happened (which might require a lower standard of proof).
B.8.3. No liability if advice did not or would not have caused change to Will
In the New Zealand case of Sutherland v Public Trustee [1980] 2 NZLR 536 the 81 year-old testator
left his whole estate to his 65-year old wife. No provision was made as to what should happen in the
event that the wife predeceased the testator. The wife did, in fact, predecease the testator. The
testator had no children of his own. However, the wife had children by a previous marriage, who
sued the Public Trustee for failing to include in the Will a provision that they were to be entitled to
the estate if their mother predeceased the testator. The claim failed. The court found that the
solicitor had advised the testator that the wife might predecease him, and suggested that provision
be made for the step-children. The testator had decided not to make any provision in this event.
There was no duty to persuade the testator otherwise. Arguably, the decision would have been
different if the solicitor had simply failed to advise the testator to include some provision in the
event of his wife predeceasing him.
In Littlewood v Wilkinson Woodward [2009] PNLR 29 gave instructions that she wished to make a
gift of the sale proceeds of her house to her granddaughter on attaining the age of 21. The solicitor
was concerned about the testatrix’s mental capacity, in particular that she might have been affected
by alcohol when giving her instructions. The solicitor decided to meet with the testatrix again and to
make a fresh start in taking her instructions. The testatrix thereupon gave new instructions which
did not include a specific gift of the testatrix’s house to her granddaughter. There was no discussion
relating to the testatrix’s previous instructions. The granddaughter claimed that the solicitors had a
duty to clarify the testatrix’s intentions with relation to her house. The Judge accepted that it might
have been better to have made specific reference to the testatrix’s previous instructions. However,
having regard to the fact that the solicitor had taken reasonable care to obtain comprehensive
instructions at the subsequent meetings, their failure to query the testatrix’s change of testamentary
intention did not amount to negligence. In any event, the Judge was not satisfied that, if the matter
17
had been raised, the testatrix would have stated that she wished to leave her house to her
granddaughter.
B.8.4. Scope of retainer
If the claim is that the solicitor has failed to ascertain the testator’s intentions, there may be an issue
as to whether the solicitor had a duty to advise on the issue in question. In Gibbons v Nelsons [1999]
Ch 326 the Court found that, although the burden of proof rests with the claimant to establish what
the scope was of the solicitor's retainer, once the claimant establishes that the solicitor was retained
to prepare a Will, the burden must shift to the solicitor to show, if he can, that his responsibility for
the preparation of the Will did not extend to advising the client on some aspect of the Will relevant
to the claim.
If, however, there is any dispute between the client and the solicitor as to the extent of the retainer,
prima facie the client’s version should prevail (Gray v Buss Merton [1999] PNLR 882).
B.9.
Failure to give competent advice in connection with Will
B.9.1. Miscellaneous duties to advise
A number of duties to advise have already been discussed, including duties to:
(a) advise as to the proper mode of execution of the Will (see B.3 above)
(b) advise whether the proposed testamentary dispositions are effective (see B.6 above);
(c) ascertain correctly the testator’s intentions, and to advise according (see B.8 above)
including a duty to point out that the testator has not made any, or any effective, gift in
certain circumstance, e.g. if the testator were to survive the donee (see B.8.1 above).
There will be a duty to advise that a Will is revoked on subsequent marriage, by virtue of s. 18 of the
Wills Act 1838, at least if the solicitor has reason to believe that marriage is a real prospect in the
near future (see Hall v Meyrick [1957] 2 All ER 722, at 730).
There will be a duty to advise a testator, who wishes to revoke a “mutual Will”, that the Will will not
be effective without the consent of the other person who had made a mutual Will. If such advice is
not given, the solicitor may be liable for the litigation costs of setting aside the new Will.
There will no doubt be a duty to advise as to the risk of claims being made against the estate, e.g. an
undue influence claim if instructions are given to the solicitor with a principal beneficiary being
present.
There will also be a duty to advise as to the risk of a claim under The Inheritance (Provision for
Family and Dependants) Act 1975. It may be, for instance, that an adult child of the testator has a
claim under the 1975 Act, but that no provision is made for the child (of whom the solicitor is aware)
because the solicitor fails to advise as to the possibility of such a claim. The beneficiaries of the
estate (or the personal representatives if the costs are payable out of the estate) may have a claim
against the solicitor in respect of any reasonable costs incurred in defending or settling the 1975 Act
proceedings; or possibly even in respect of some or all of the provision which they may be ordered
or agree to pay to the child, if a suitably-worded memorandum by the testator, as to his objective
reasons for excluding the child would have given stronger grounds for defending the claim.
18
Although there may be a duty to advise, there is no duty to persuade the testator to accept the
advice (Sutherland v Public Trustee [1980] 2 NZLR 536).
B.9.2. Duty to give tax advice in connection with the Will
There is no doubt a duty to advise as to the tax implications of the Will which the solicitor is asked to
prepare. In Cancer Research Campaign v Ernest Brown & Co [1997] STC 1425 Harman J said that he
did not doubt that a solicitor, in considering a Will he is asked to prepare, must consider what
inheritance tax complications will be caused by the bequests in respect of which he had been given
instructions.
If the solicitor wishes to exclude liability for tax advice, clear, informed and written consent of the
testator will be required. The client should be fully informed as to the limited reliance he may place
on the solicitor and the reason for it (i.e. the solicitor's lack of any basic knowledge or competence
as to tax), that this limitation is not a normal term of a solicitor's engagement, and that the client
may be better advised to go to another solicitor who is not so handicapped and can be retained with
no such limitation on his duties. Common sense requires that all these matters should also be
recorded in an attendance note of the meeting where they are discussed and agreed, and should
subsequently be recorded in a letter to the client (Hurlingham Estates Ltd v Wilde & Partners [1997]
1 Lloyd’s Rep 525, at 529).
In practice, the level of consideration of tax issues may not be that onerous. Consideration should no
doubt be given to the issue of whether to include a nil rate band legacy in favour of chargeable
beneficiaries, or whether to rely upon the transferable nil rate band. The extent of the duty will,
however, vary according to the size and nature of the estate, the age of the testator, the identity of
the proposed beneficiaries, and the complexity of the Will.
The necessity to give tax advice may have an impact upon the assessment of a reasonable period of
delay in preparing the Will.
B.9.3. Failure to give post-death planning advice to testator
The existence of a duty to give post-death planning advice in respect of the estate of someone other
than the testator was denied in Cancer Research v Ernest Brown & Co [1997] STC 1425. A brother
and sister died within 18 months of each other. The majority of the brother’s estate passed to the
sister, and the majority of her estate to 7 charities. A legal executive in the defendant firm acted in
the administration of the brother’s estate, and prepared the sister’s Will following the brother’s
death. It would have been beneficial for IHT purposes for the sister (or after her death, her personal
representatives) to have entered into a deed of variation within 2 years of the brother’s death, in
compliance with s. 142 IHTA 1984, redirecting the brother’s estate directly to the charities. There
would then only have been one transfer of value, which would have exempt. However, no deed of
variation was executed within the 2-year period.
The charities claimed that the solicitors were under a duty to the sister to advise her to execute a
deed of variation of her brother’s estate redirecting his estate directly to the charities, saving IHT on
the brother’s death. Harman J held that the retainer was to prepare the sister’s Will. This was
properly carried out. There was no duty to inform an intended testator, who comes in to instruct a
solicitor about his or her Will, about tax avoidance schemes in connection with some quite other
estate. The duty was limited to carrying out the testator’s instructions completely and promptly.
Harman J also rejected the claim on the grounds that there was no evidence that the testatrix would
have acted on advice to enter into a deed of variation.
19
The Judge also rejected a claim that the legal executive was under a duty to advise the charities of
their entitlement so that they could execute a deed of variation within 2 years of the testator’s
death (see B.10 below).
The decision was influenced by the Judge’s perception that the legal executive could not be
expected to give tax-avoidance advice. The Judge commented that tax avoidance is a matter which
occurs naturally and at once to any regular practitioner in Chancery matters, and to most- although
nowadays not all - members of chambers in Lincoln’s Inn. That did not mean, however, that it is an
idea that occurs naturally, or that it should be attributed to ordinary people in the ordinary way of
business, or to a legal executive in a small firm of high street solicitors.
It must, however, be debateable whether: (a) a firm of solicitors, holding itself out as competent to
prepare Wills and administer estates, could not reasonably be expected to give advice as to saving
IHT by means of a deed of variation; and (b) it would be appropriate in all cases to apply the
standard of expertise to be expected of a legal executive in a small firm of high street solicitors. A
firm of solicitors, particularly a larger firm with a private client department, would not be safe to
conclude that it could be under no liability in similar circumstances for failure to advise as to tax
savings to be achieved by deeds of variation.
B.9.4. Defective post-death planning advice
Furthermore, if solicitors do, in fact, give incorrect advice as to deeds of variation, or fail to act in
such a way that the deed is effective for tax purposes, they could be liable to the beneficiaries of the
client’s Will. In Cotterell v Leeds Day [2001] WTLR 435 a deed of variation was executed by a wife
redirecting the husband’s half share in the matrimonial home, which had been left to his wife, to
their daughter. The solicitors negligently failed to register the deed of variation within 6 months of
execution with the result that the deed was not treated as having been made by the husband on his
death for IHT purposes. In consequence, the wife made a PET, which became chargeable in her
estate on her death. The daughter sued the solicitor for damages equal to the additional IHT payable
in the wife’s estate on her death. It is not clear whether the daughter sued in her capacity as
executor or beneficiary of the wife’s estate. In any event, there was an issue as to limitation which
was heard as a preliminary issue. The action was held not to be statute-barred. There is no further
report of the case. Presumably, the claim was compromised. This does suggest that the solicitors
could, in similar circumstances, be liable in respect of the additional IHT liability caused by an
ineffective deed of variation.
As to whether there can be a liability in respect of lifetime transactions, entered into for estate
planning reasons, see F below.
B.10.
Duty to advise beneficiaries of entitlement
In Cancer Research v Ernest Brown & Co [1997] STC 1425 (see B.9.3 above) the charities made a
secondary claim that the legal executive in the defendant firm had negligently failed to advise the
charities, after the death of the sister, that they were beneficiaries of her estate. The charities
claimed that, if they had been so advised within 2 years of the brother’s death, they would have
executed a deed of variation of the brother’s Will redirecting his estate from the sister to the
charities. The sister died about 6 months before the expiry of the 2-year period, so that there was
ample time to inform the charities of their entitlement. As it was, the charities did not become
20
aware of their entitlement until after the 2-year period for executing a tax-effective deed of
variation had passed.
Harman J dismissed this claim on the basis that the defendant firm, acting as solicitors in the
administration of the sister’s estate, was under no duty to the residuary beneficiaries of that estate,
only to the executors thereof. A solicitor acting in the administration of the estate is under no duty
to notify a legatee of the legatee’s entitlement unless instructed to do so by the executor. Indeed, an
executor is under no duty to inform a legatee of the legatee’s prospective entitlement to the legacy
(Re Lewis [1904] 2 Ch 656, at 658). There was in any event no duty on the defendant firm, during the
course of administration of the estate, to notify the charities that the estate of the sister included
substantial benefits under the brother’s unadministered estate, or of the date of the brother’s
death, so as to give them the opportunity to execute a deed of variation whereby they would be
deemed for tax purposes to have derived their entitlement from another estate. The duty on a legal
executive could not include a duty to facilitate a tax-avoidance scheme.
The decision is questionable. Where there are double deaths in quick succession, and the ultimate
beneficiaries are charities, the tax saving to be derived from a deed of variation, executed within 2
years of death, should be apparent to any reasonably competent solicitor or legal executive acting in
the estate. In Cancer Research the legal executive was also an executor of the sister’s estate. Why
should he not have been under a duty at least to notify the charities of their entitlements, given that
it was readily foreseeable that they would otherwise be deprived of an opportunity to maximise
their entitlements?
If a solicitor does, in fact, advise as to a beneficiary’s entitlement, but does so negligently, causing
loss to the beneficiary who has relied upon that advice, the solicitor may be liable to the beneficiary
(Martin v Triggs Turner Bartons [2010] PNLR 3, paras. 93 to 100).
B.11.
Delay in obtaining grant
In Chappel v Somers & Blake [2003] WTLR 1085 the solicitors instructed to act in the administration
of the estate did nothing to obtain a grant of probate for almost 5 years with after which the
executrix obtained a grant of probate through another firm. The executrix claimed loss of income
from two properties comprised in the residuary estate during the period of delay. There was no
question but that the failure to obtain a grant promptly amounted to negligence. The issue was
whether the executrix (who had no interest in the residuary estate) had suffered any loss which she
could claim (see D.1.2 below).
Neuberger J accepted (para. [12]) that no duty was owed by the executor to the beneficiaries arising
out of a delay by the executor in obtaining a grant of probate. This surprising result may be
explained by the fact that a person is not under a duty to accept an appointment as an executor. In
any event, a beneficiary who thinks that an executor is not moving swiftly enough to obtain a grant
of probate can apply for the issue of a citation to accept or refuse a grant, or for an order passing
over the executor. If an executor cannot be liable to a beneficiary for delay in obtaining a grant,
there can be no question of the executor having a claim for an indemnity against the solicitors for
any liability arising out of the same delay.
In Sifri v Clough & Willis [2007] WTLR 1453 the beneficiaries of a Will, which was admitted to
probate after a contested probate action, claimed damages from the solicitors who had negligently
prepared a later Will (set aside in the probate action) for losses incurred in consequence of the delay
in obtaining a grant due to the probate dispute. This aspect of the claim was rejected on the grounds
that, where a dispute emerges as to which Will is valid, there is much that can be done to protect
21
the estate pending the outcome of the probate action, including the appointment of an interim
receiver or administrator pending action.
B.12.
Failure to notify personal representatives
There is no English authority as to whether a solicitor, who has agreed to store the Will, owes a duty
of care to the executors of the estate in respect of loss suffered by a negligent failure to locate the
executors and notify them of the existence of the Will. However, in the Australian case of Hawkins v
Clayton (1988) 164 CLR 539 it was held that such a duty was owed. The solicitors made little or no
effort for 6 years to trace the executor causing loss (a fine for late payment of estate duty, and
diminution in the value of estate property allowed to fall into disrepair). Such loss was recoverable,
being loss of the exercise or enjoyment of the rights of ownership by an executor who does not
know of his entitlement. It is submitted that an English court would reach the same conclusion on
the basis that a solicitor is entrusted with the custody of a Will in order to ensure that the Will is
safeguarded for the benefit of the executor, so that it can be produced promptly for probate for the
ultimate benefit of the beneficiaries.
B.13.
Duty not to act
Where there was a continuing contractual relationship between a solicitor, and a husband and wife,
it was a breach of the solicitor’s retainer to prepare a new Will for the husband disinheriting the
wife, and also to advise that the joint tenancy of the matrimonial home should be severed (Hines v
Willans [2002] WTLR 299). The solicitor had prepared reciprocal Wills for the husband and wife, and
continued to advise the wife on testamentary matters. The wife had to pay a sum of money to her
step-children to settle her claim to set aside the husband’s new Will. She successfully recovered the
whole of that sum on the basis that the Judge found that – had the husband been turned away by
the defendant solicitor – he would not have pursued his aim to instruct another solicitor to produce
a Will in the same terms.
A solicitor will also have a duty not to act where he has reason to believe that the Will has been
procured by undue influence, or if not satisfied that the instructions represent the wishes of the
testator (see C.2 and C.3 below). He may also be under a duty not to act if the testator is clearly
incapable of giving testamentary instructions.
C.
PROBATE CLAIMS
C.1.
Testamentary capacity
C.1.1. Preparation of Will for incompetent testator
A solicitor may be liable to beneficiaries of a Will if the solicitor has prepared a Will for execution by
the testator in circumstances in which no reasonable solicitor would have so acted having regard to
the testator’s apparent lack of testamentary capacity. However, there is no English authority in
which a solicitor has been held so liable.
C.1.2. English authority suggesting that duty to inquire into testamentary capacity and, if
necessary, refuse to act
22
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.”
This suggests that a medical opinion should be obtained, or at least proposed, in the case of an aged
testator, or a testator who suffers from a serious illness, even if there are no obvious indicators of
lack of capacity. It also implies that a medical opinion should be sought, even without the testator’s
consent or approval. Indeed, in Re Morris [2001] WTLR 1137 Rimer J stated that the solicitor should
have “insisted” that some medical assistance was invoked. The implication is that the solicitor should
refuse to act if the testator does not consent. The Solicitors’ Code of Conduct 2007, r. 2.01(1) states
that a solicitor is generally free to decide whether to take on a particular client (see also Hall v Estate
of Bruce Bennett [2003] WTLR 827, at C.1.6 below).
In 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 as damages the irrecoverable costs of the probate
action: a costs order had been obtained against the defendants to the probate action, but was
unenforceable.
The claim was dismissed on the basis that any claim for the costs of the probate proceedings was
one which should be made by the personal representatives of the 1983 Will, and not by the
beneficiaries thereof, on the basis that the beneficiaries’ costs were payable out of the estate (see
C.5.2 below).
There was, therefore, little consideration given to the issue of what duty, if any, a solicitor might
owe (to the testator or his personal representatives) when accepting instructions from a testator
who is subsequently found to have lacked testamentary capacity. Chadwick L.J. merely commented
that he was content, for present purposes, to adopt the careful analysis of the matters which a
solicitor would need to consider when accepting instructions to make a Will set out in paras. 52 to
54 in Vol. 42 of the Encyclopedia of Forms and Precedents, including a duty “when entering upon the
task of preparing a will, and being satisfied that the intending testator is not under any incapacity, ...
to ascertain from the testator in all necessary detail what are his instructions.”
It might, therefore, be thought that there is a duty on a solicitor to satisfy himself that the intending
testator does not lack testamentary capacity; and, if not so satisfied, to decline to accept
instructions. If the solicitor does accept instructions and prepares a Will, where the testator is
subsequently found to have been incapable, the solicitor could be liable to the personal
representatives of the last valid Will for the costs of the probate action to set aside the later Will.
C.1.3
New Zealand authority that no general duty to inquire into testamentary capacity and/or
to refuse to act
However, in the New Zealand case of Public Trustee v Till [2002] WTLR 1169, at para. [71], the Judge
expressed the view that the passage, quoted in C.1.2 above from the Encyclopedia of Forms and
Precedents, fell short of establishing any positive duty on a solicitor to establish to his or her
23
satisfaction that the testator has testamentary capacity. In any event, it begged the question as to
the extent of the solicitor’s duty should there be any doubt about testamentary capacity.
In Knox v Till [2002] WTLR 1147 the New Zealand Court of Appeal did not accept that there was a
duty on a solicitor to refuse to act if not reasonably satisfied as to the testamentary capacity of an
intending testator. There is in general an obligation to carry out the client’s instructions. The
appropriate response of a solicitor, who has doubts as to capacity, is to give the testator advice as to
the consequences of executing a Will, where such capacity is in doubt, and to record that advice. The
claim by the residuary beneficiaries of the last valid Will, to recover the costs of the probate claim to
set aside the Will, was struck out on the basis that the solicitor was under no obligation to refuse to
carry out the client's instructions to prepare a Will, even if not reasonably satisfied as to the
testator's testamentary capacity.
Indeed, In Public Trustee v Till it was not alleged that the solicitor should have refused to act. The
claim was that the solicitor should have made appropriate inquiries as to the testator’s capacity,
including obtaining medical advice. However, the claim failed. On the evidence, the Judge found that
there was nothing in the circumstances surrounding the taking of instructions for the invalid Wills
which ought to have alerted a reasonably competent practitioner to any lack of testamentary
capacity. There was, therefore, no reason to obtain medical advice. In the absence of clear indicators
of lack of understanding, or plainly defective recollection of assets or family members, the solicitor is
under no general duty to inquire into the issue of lack of testamentary capacity.
C.1.4. Duty to refuse to act if the testator clearly incapable of giving instructions
In Public Trustee v Till [2002] WTLR 1169 the Judge accepted that a solicitor could only decline to
proceed with a Will in exceptional circumstances, including “where the client is so obviously lacking
in mental capacity that the instructions are not truly instructions at all” (para. [26]). A solicitor could,
therefore, be held liable to the personal representatives of a previous, valid Will in respect of any
irrecoverable costs of probate proceedings incurred by the personal representatives or the
beneficiaries of that previous Will, to the extent that those costs are payable out of the estate.
However, if the client was obviously lacking in mental capacity, the costs of any probate action to set
aside the Will may be minimal and/or that a costs order might be made against the defendants to
the probate action.
This must be the case also in English law.
C.1.5. Whether costs of probate action caused by solicitor’s failure to make inquiries as to
testator’s capacity
In Public Trustee v Till [2002] WTLR 1169 it was stated that, even if there were grounds for inquiry as
to the testator’s capacity, the claimants would have to prove that the testator would have agreed to
medical advice being taken; that such medical advice would have established lack of capacity or, at
least, doubts about that capacity; that, if the testator had been informed of the medical advice and
advised appropriately, the testator would not have proceeded with the Will; and that the costs of
the probate action were caused by and within the reasonable contemplation of the solicitor. These
are tough tests to satisfy. In Public Trustee v Till it was, for instance, impossible to be satisfied that
the testator would not have proceeded with the Will, if informed that the medical advice cast doubts
on his capacity, and that his Will might be challenged. There was a complete absence of evidence on
this point.
24
C.1.6. Refusal to prepare Will for testator on grounds of testator’s apparent incapacity
In Ryan v Public Trustee [2000] 1 NZLR 700 the Public Trustee was held to be liable to a beneficiary
for having failed to have a Will executed on the instructions of the testatrix. The Public Trustee had
consulted with a matron at the testatrix’s rest home, and concluded that the testatrix lacked
capacity. However, no doctors had been consulted. The Judge held that there was a duty to
investigate testamentary capacity by consulting the testatrix’s doctors. Had that happened, the
medical evidence would have established the testatrix’s testamentary capacity. The beneficiary of
the Will had been deprived of the opportunity of having a Will made in her favour. Damages were to
be assessed on the basis of the loss of that chance.
However, it is questionable whether a solicitor would have any liability to a disappointed beneficiary
of a Will in respect of which the solicitor declines to accept instructions, particularly if the solicitor so
declines in the reasonable belief that the testator lacked capacity. In the Canadian case of Hall v
Estate of Bruce Bennett [2003] WTLR 827 the prospective testator could not remember the full
extent of his estate and was not alert enough to review or sign his Will. During his interview with the
lawyer, he could only stay awake for a few minutes at a time. The lawyer refused to accept any
retainer. A beneficiary of the intended Will sued the lawyer claiming that the testator was
competent, and that the lawyer had a duty to accept the retainer and prepare the Will. The Ontario
Court of Appeal determined that the lawyer acted reasonably and prudently in assessing capacity,
and in refusing the retainer. The lack of any retainer meant that there could be no duty to the
intended beneficiary (see A.4 above). Indeed, the Court even doubted whether, regardless of the
lawyer’s opinion as to capacity, he could be held to be under any legal duty to accept the retainer.
C.1.7. Advice as to how to proceed
English (and, indeed, Canadian) authority is, therefore, arguably, in conflict with the Public Trustee v
Till if and to the extent that that Till states that: (a) there is no duty to inquire into the issue of
testamentary capacity in the absence of clear indicators of lack of understanding; (b) the solicitor
would only be justified in seeking medical advice if the testator agreed; and (c) the solicitor would
not be justified in refusing to act unless the testator was clearly incapable of giving instructions.
There is, therefore, some uncertainty as to the law. In particular, it is not clear whether the solicitor
should or should not accept instructions where there is doubt as to the testator’s capacity. A
solicitor may be damned if he does, and damned if he does not. If he refuses to prepare the Will, he
may be liable to the disappointed beneficiaries of that Will. If he prepares the Will, which is then set
aside, he may be liable to the personal representatives or beneficiaries of the previous, last Will in
respect of the costs of the probate proceedings. A number of rules of thumb are suggested.
Firstly, the safe course must be to advise that a medical opinion be sought where the testator is old,
has suffered a serious illness, or where there is reason to suspect a lack of capacity, including a case
where the Will is irrational or perverse (see Sharp v Adam [2006] WTLR 1059; Re Ritchie [2009]
EWHC 709 (Ch)). Secondly, the medical practitioner should be informed of the test of testamentary
capacity; be informed of any indications of lack of capacity; and be advised of the terms of the
proposed Will and of previous Wills and of other material matters, such as details of the testator’s
family and assets. Thirdly, the doctor should, preferably, have some experience in mental capacity
issues, and should conduct an examination of the testator’s capacity shortly before the execution of
the Will. Fourthly, if the testator declines to agree to a medical assessment, or insists upon
proceeding with a Will when the medical evidence casts doubt on the testator’s capacity, the
solicitor may be justified in refusing to act. However, the safer course is to leave the issue of capacity
for decision by the court, and to prepare the Will for execution, unless there can be no reasonable
25
doubt that the testator lacks capacity. It is unlikely that the solicitor will be found to have acted
negligently in accepting instructions in these circumstances. Fifthly, all advice should be carefully and
fully recorded in writing.
C.2.
Preparation of Will of which the testator did not know of and approve
A Will can be set aside where the testator did not know of and approve its contents. Where there
are suspicious circumstances as to whether the testator knew of and approved its contents, and a
failure to adduce sufficient evidence to rebut that suspicion, e.g. evidence that the contents of the
Will were explained to the testator by an independent solicitor. Therefore, a solicitor who prepares a
Will, without taking proper steps to ensure that the contents of the Will are brought home to the
testator, may well be liable to the personal representatives, or beneficiaries, of a previous valid Will
in respect of the costs of the probate action to set aside the Will.
In Sifri v Clough & Willis [2007] WTLR 1453 the testator made two Wills in favour of his wife which
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 daughter did not obtain an
award of costs in the probate action. She subsequently brought negligence proceedings against the
solicitor, who had prepared the Will, to recover damages equal to her costs, on the grounds that the
solicitor had failed to ascertain from the testator what his true instructions were, and that he had
taken instructions from the testator’s widow. 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, and 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.
The preparation by a solicitor of a Will under which the solicitor himself benefits significantly will be
a breach of rule 3.04 unless the solicitor has taken independent advice. If this rule is breached, the
Will could be set aside for want of knowledge and approval (see Wintle v Nye [1959] 1 WLR 284).
The solicitor could be liable in these circumstances to the beneficiaries or personal representatives
of a previous Will in respect of the costs of probate proceedings to set aside the Will.
It is also conceivable that the solicitor could be liable to the intended beneficiaries of the Will, which
is set aside for want of knowledge and approval, for the loss of a chance that the testator would
have made a valid Will if the solicitor had fully explained its contents to the testator. However, there
is no reported case.
C.3.
Preparation of Will procured by undue influence
Undue influence in the case of Wills means coercion. In Worby v Rosser [2000] PNLR 140 (see C.1.2.
above) two Wills was set aside in probate proceedings on a number of grounds, including undue
influence. The beneficiaries of the last valid Will brought negligence proceedings against the
solicitors who had prepared the invalid Wills alleging, claiming their costs in the probate
proceedings. One of the claims was that the solicitors failed to take reasonable care to ensure that
26
the Will was not procured by undue influence. The claim was dismissed on the grounds that the
proper claimants were the personal representatives of the last valid Will, not the beneficiaries, as
the costs of the beneficiaries were payable out of the estate. However, in principle, there is no
reason why solicitors should not be held liable to the personal representatives for the costs of
probate proceedings if they failed to take reasonable care to ensure that the Will was not procured
by undue influence.
Under the Solicitors Code of Conduct, r. 2.01(1)(d) a solicitor must refuse to act if he knows or has
reasonable grounds to believe that the instructions are affected by duress or undue influence. The
solicitor should not take instructions, of final instructions, in the presence of a beneficiary; and
should, if any cause for suspicion arises, ask the testator whether any pressure has been applied to
make the Will in question.
C.4.
Lack of testamentary intention
A Will is invalid if the testator does not have an animus testandi, i.e. a testamentary intention, at the
date of execution (Corbett v Bond Pearce [2001] 3 All ER 769). The solicitor will be negligent for
having failed to advised that the testator must, when signing the Will, have an intention to make a
Will having immediate effect (see B.3 above).
C.5.
Costs of probate proceedings
C.5.1. Claim for costs of successful probate proceedings to set aside invalid Will
Assume the following scenario: T makes a Will (“Will 2”) revoking a previous Will (“Will 1”). 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. The beneficiaries
of Will 1 obtain an order for costs in the probate action, but it cannot be enforced (e.g. because the
defendants were publicly funded). The beneficiaries of the Will 1 then bring negligence proceedings
against the solicitor who prepared Will 2 alleging that the solicitor failed to take reasonable care to
ensure that Will 2 was not invalid.
The above was the position in Worby v Rosser [2000] PNLR 140 (see C.1.2 above). The claimants
were the beneficiaries of Will 1. They had incurred irrecoverable costs in probate proceedings to set
aside two later Wills. In effect, their claim was that they would not have had to incur those costs if
the solicitor had acted with reasonable competence by declining to accept instructions to prepare
the later Wills, given that the testator lacked testamentary capacity etc.
A similar claim was made in Sifri v Clough & Willis [2007] WTLR 1453 (see C.2 above). The claimants
were the beneficiaries of the last valid Will. They had incurred costs in probate proceedings to set
aside two later, invalid Wills. The claimant did not obtain an award of costs. She sought to recover
the costs of the probate proceedings from the solicitor who had prepared the later Will on the basis
that, but for his negligence, she would have received her entitlement undiminished by her costs in
the probate proceedings.
27
C.5.2. Claim by beneficiaries - loss
It might be thought that the correct claimants are the residuary beneficiaries of Will 1. It is they who
have incurred the costs of the probate proceedings; and it is their entitlement under Will 1 which is
reduced by the costs of the unrecovered probate claim.
However, in Worby v Rosser [2000] PNLR 140 the Court of Appeal dismissed the claim by the
beneficiaries of the last valid Will, on the basis that any claim for the costs of the probate
proceedings ought to have been made by the personal representatives of the last valid Will.
Beneficiaries who have properly incurred costs in propounding the last true Will of a testator are
entitled to recover those costs out of the estate. The estate was, therefore, diminished by the
beneficiaries’ costs in the probate proceedings. The personal representatives were the persons who
should sued to recover any costs payable out of the estate.
In the New Zealand case of Public Trustee v Till [2002] WTLR 1169 a claim was brought by the
personal representatives of the last true Will to recover the beneficiaries’ costs of the probate action
to set aside the later invalid Wills. However, the Judge did not accept that the estate (as distinct
from the residuary beneficiaries) had incurred costs in connection with the litigation. The residuary
beneficiaries directed the personal representative to pay their legal costs out of residue. However,
the Judge said that the estate was never liable for those costs, and did not meet them. Nor was
there any court order requiring the estate to meet the costs, and the estate never accented any
liability to pay them. This appears to run contrary to the analysis in Worby v Rosser that beneficiaries
who had properly incurred costs in propounding the last true Will of a testator are entitled to
recover those costs out of the estate, with the result that it is the estate which has suffered loss,
even if there is no order that costs be paid out of the estate.
In Sifri v Clough & Willis [2007] WTLR 1453 the claim to recover the costs of the probate proceedings
was brought by the beneficiary of the last valid Will. The defendant solicitor accepted liability. No
point was taken that the claim ought to have been commenced by the personal representatives. The
claimant was, however, both the beneficiary and the putative personal representative of the last
valid Will: an order had been made for a grant of letters of administration to the claimant, albeit that
the grant had not been made.
C.5.3. Claim by beneficiaries - duty
In Knox v Till [2002] WTLR 1147 (see C.1.3 above) the New Zealand Court of Appeal dismissed a claim
to recover the costs of a probate action, by the residuary beneficiaries of the last true Will, on the
grounds that no duty was owed to the residuary beneficiaries, rather than that no loss had been
suffered by the beneficiaries. If the solicitor refused to act on the testator's instructions, there would
be a conflict between the interests of the testator and those of the claimant beneficiaries. The
degree of proximity in relationship was too distant; there was no assumption of responsibility by the
solicitors; the claimant beneficiaries placed no reliance upon the solicitors; and there were no policy
consideration is sufficient to justify the imposition of such a duty.
It is submitted that the reason for rejecting the beneficiaries’ claim in Knox v Till (no duty) is more
persuasive than that in Worby v Rosser (no loss). The claim by the beneficiaries of a former Will
against a solicitor who has negligently prepared a later Will is not a White v Jones claim at all. Any
claim by the beneficiaries of an earlier Will must be determined on normal negligence principles.
There is no assumption of responsibility by the solicitor to those beneficiaries. There is, therefore, no
duty owed to the beneficiaries in respect of the costs of the probate action.
28
C.5.4. Claim by personal representatives
In Worby v Rosser [2000] PNLR 140 it was suggested by Counsel for the defendant solicitor that the
personal representatives of the last valid Will could not have a claim to recover the costs of the
probate action to set aside the subsequent invalid Wills. Chadwick L.J. did not, however, accept that
there were no circumstances in which such a claim would lie. It seemed to him that such a
submission went too far. But he did not find it necessary to decide what the relevant circumstances
might be. The Court of Appeal determined that the beneficiaries had no claim on the basis that “if
there is to be a remedy against the solicitor, it should be the estate’s remedy for the loss to the
estate”. The issue of whether the personal representatives would have a valid claim was, therefore,
left open.
However, in Corbett v Bond Pearce [2001] WTLR 419, at 430D-E, Sir Christopher Slade interpreted
the decision in Worby v Rosser as involving an acceptance that, in a case where a solicitor's
negligence in regard to the preparation or execution of a Will was the cause of expensive probate
proceedings, this could give rise to a claim for damages against the solicitors at the suit of the
testator's personal representatives for the benefit of the estate generally. On the particular facts of
Worby, the testator’s personal representatives would, he said, have had a good cause of action for
the loss suffered and, if they had pursued this claim, the solicitor would have been exposed to no
double liability.
There is no analysis in any of the above cases for the basis of a claim by the personal
representatives. However, it is suggested that the correct analysis is that a solicitor, who is asked to
prepare a Will, owes a duty to the testator in respect of any diminution in the value of his estate, e.g.
the costs of probate proceedings, caused by the solicitor negligently accepting instructions to
prepare an invalid Will. If the testator has died, when the facts giving rise to the claim come to light,
then the testator's cause of action will devolve on his personal representatives under s. 1 of the Law
Reform (Miscellaneous Provisions) Act 1934. Where a duty of care is owed to a person during that
person's lifetime, and that there is a breach of duty during that lifetime causing loss to the estate
which accrues on the death of the client, the estate may have a cause of action against the solicitor
for that loss (see Corbett v Bond Pearce [2001] PNLR 31, at paras. 16 and 17; Rind v Theodore
Goddard [2008] EWHC 459, at para. 41).
However, the costs of the probate action must be payable or recoverable out of the estate for the
personal representatives to bring a claim (see C.5.2 above).
C.5.5. Claim for costs of probate proceedings by personal representatives of earlier valid Will
where successful White v Jones claim by beneficiaries of later invalid Will
Where a Will is set aside due to the incapacity of the testator, or due to undue influence, it is most
unlikely that there will be a negligence claim by the beneficiaries of that Will against the solicitor
who prepared the invalid Will. If the solicitor had acted competently, the solicitor would have
declined to act, and the Will would not have been executed. The beneficiaries would not have
received any benefit. Alternatively, if, say, the solicitor failed to make reasonable inquiries as to the
testator’s capacity, and the Will is set aside on the grounds of incapacity, the beneficiaries would not
have received any benefit if the solicitor had made reasonable inquiries. Any negligence claim will be
by the personal representatives of the last valid Will to recover the costs of probate proceedings to
set aside the invalid Will (see C.5.4 above).
However, a problem arises if the Will, prepared by the solicitor, is set aside in circumstances where,
but for the solicitor’s negligence, the Will would have been effective to confer benefits on the
beneficiaries of the Will. In such a case there may be claims by: (a) the intended beneficiaries of the
29
invalid Will and also (b) the personal representatives of the last true Will, leading to the possibility of
double liability.
This scenario arose in a series of related cases commencing with Corbett v Newey [1998] Ch 57. In
Corbett v Newey a Will made in September 1989 was set aside due to the lack of animus testandi by
the testatrix when she executed the Will (see B.3 above). An earlier Will, made in February 1989,
was admitted to probate. The costs of the probate action (£150,000) were ordered to be paid out of
the estate.
The beneficiaries of the September 1989 Will commenced proceedings against the defendant
solicitors to recover damages in respect of the failure to procure the valid execution of the
September 1989 Will in accordance with the testatrix's instructions. This claim (“the Disappointed
Beneficiaries’ claim”) was settled on the basis that the disappointed beneficiaries were paid the
amount of the net residuary estate undiminished by the costs of the probate action.
The personal representative of the February 1989 Will then brought a negligence claim against the
solicitors to recover the costs of the probate action, on the basis that the estate had been
diminished by those costs. At first instance the claim succeeded, but it was dismissed on appeal
(Corbett v Bond Pearce [2001] PNLR 31).
There were three justifications for this decision based on: (a) the scope of the duty; (b) double
liability; and (c) causation. As to the scope of the duty, this had to be determined by reference to the
kind of damage from which the solicitors had to take care to keep the testatrix harmless, having
regard to the terms of their retainer. The kind of damage from which she was to be kept harmless
was the loss which those who would become interested in her estate, whether as beneficiaries
under the September 1989 Will or as creditors, would suffer if effect were not given to her latest
testamentary intentions. It was not the loss which the various classes of beneficiaries named in the
February 1989 Will would suffer, because the testatrix had no wish or intention that the February
1989 Will should have any effect after the September 1989 Will came into force. As to double
liability, the defendant solicitors were under an indisputable liability to compensate the residuary
beneficiaries under the September 1989 Will for the full amount of the residuary estate,
undiminished by the costs of the probate action. They could not at the same time be under a liability
to the testatrix's personal representatives in respect of the same costs. If the claims of the
disappointed beneficiaries under the September 1989 Will, and of the personal representatives
under the February 1989 Will, had been consolidated in one action, the court would not have
awarded damages to the personal representatives, as this would have involved double liability and
double recovery. Thirdly, on causation, if the personal representatives’ claim succeeded, the
residuary beneficiaries of the February 1989 Will would be better off than if there had been no
breach of duty on the part of the defendant solicitors, because they would have received no part of
the residuary estate if the September 1989 Will had been effective.
It is submitted that this decision was correct. The residuary beneficiaries of the February 1989 Will
were never intended to benefit; if there had been no negligence, they would not even have received
their entitlements diminished by the costs of the probate action. The personal representatives of the
February 1989 Will were suing, in effect, on behalf of the residuary beneficiaries, and should not be
entitled to recover damages for a loss which the residuary beneficiaries would never have suffered if
there had been no negligence. The residuary beneficiaries’ loss was not within the scope of the
solicitors’ duty.
30
C.5.6. Duty owed to personal representatives if estate insolvent due to costs of probate claim
There was, however, a curiosity to the judgment in Corbett v Bond Pearce [2001] PNLR 31. The
defendant solicitors had admitted liability. The Court of Appeal determined a preliminary issue that
the personal representative of the February 1989 Will was not entitled to recover damages equal to
the diminution of the value of the estate attributable to the cost payable in the probate action.
However, the Court of Appeal gave liberty to apply to the claimant on the basis that the estate
would have a claim to damages if, after deduction of the costs of the probate action, it was insolvent
and could not pay its creditors, pecuniary legatees and specific devisees. This makes little sense. If
the solicitors had not been negligent, the creditors, pecuniary legatees and specific devisees of the
February 1989 Will would not have received anything, any more than the residuary beneficiaries
would have done if the estate had been solvent. The explanation may be that the Court of Appeal
considered that the loss of the residuary beneficiaries (the cost of the probate proceedings) and the
loss of disappointed beneficiaries (the net estate undiminished by costs) represented, in substance,
the same monetary loss to the extent of those costs (see para. 32 of Slade L.J.’s judgment). In other
words, if the costs of the probate action were £x, the disappointed beneficiaries would receive their
full entitlement undiminished by £x, and the residuary beneficiaries of the probated Will would
receive the residue estate diminished by £x. However, if the value of the estate were insufficient to
pay all the creditors or legatees, in part by reason of the costs of the probate action, the shortfall
would not necessarily be £x. Therefore, the logic must be that any shortfall is, in substance, a distinct
loss from that suffered by the disappointed beneficiaries. However, if this is the logic, it is not made
explicit, and is in any event questionable. The fact that there may be two claims including the same
sum (£x) does not mean that the claims are the same; nor does it follow that if one claim is for £x,
and the other is for less than £x, the two claims must be distinct.
The matter was further complicated by the Court of Appeal making an order as to how damages
should be assessed, if the estate were insolvent, which in itself was confused and made little sense
(see Corbett v Bond Pearce [2006] WTLR 967, at paras. 54 and 58; C.5.6 below).
C.5.7. Causation/loss
The measure of damages will not necessarily be exactly equal to the amount of the irrecoverable
costs in the probate action. It is necessary to prove that any diminution in the estate attributable to
the costs of the probate action was caused by and was within the reasonable contemplation of the
solicitors in the event of their negligence (Public Trustee v Till [2002] WTLR 1169, at 1178H).
In Sifri v Clough & Willis [2007] WTLR 1453 the testator made a Will which was set aside for want of
knowledge and approval. The solicitor was negligent in not taking the testator’s instructions directly.
The testator’s daughter, who was the principal beneficiary under a previous valid Will obtained an
order setting aside the later Will in contested probate proceedings. She did not, however, obtain an
order for costs because (a) she had made unreasonable claims of undue influence and lack of
testamentary capacity, which were dismissed and (b) in regard to the successful claim of want of
knowledge and approval, the Judge considered that the full circumstances in which the Will was
executed would not necessarily have emerged except at trial. The Judge found that the defendant
solicitor should pay 40% of the claimant’s costs of the probate action, subject to a 10% reduction for
assessment on the standard basis. Presumably (it is not made explicit) the Judge considered that
40% of the costs were attributable to the successful want of knowledge and approval claim. If,
however, a costs order is obtained, but cannot be enforced due to the defendant’s impecuniosity,
the claimant should be entitled to recover 100% of the costs.
31
No deduction was made for the contingency that, if the testator’s instructions had been taken
directly, he might have might have given instructions in the terms of the Wills that were set aside.
Indeed, the point does not seem to have been argued, presumably on the basis that that
contingency was remote.
The loss is not necessarily confined to the costs of the probate action. It can include any loss or
liability, the suffering or incurring of which can fairly and reasonably be said to been caused by the
probate action or any order made in that action, provided that such liabilities fall within the type of
damage from which the solicitors are under a duty to hold the estate harmless (Corbett v Pearce
[2006] WTLR 967, at para. 68 to 69). This will not include costs which the personal representative
has earlier in the negligence proceedings been ordered to pay to the defendant solicitors; nor any
costs of the personal representative in such proceedings payable to his own solicitors, which will be
recoverable as costs, if at all, rather than as damages (Corbett v Bond Pearce, paras. 77 to 80).
D.
CLAIMS BY PERSONAL REPRESENTATIVES AND DOUBLE LIABILITY
D.1.
Claims by personal representatives
D.1.1. Requirement of loss to the estate
There are a number of areas in which a claim by a personal representative is appropriate, in
conjunction with, or as distinct from, a claim by a disappointed beneficiary. In a White v Jones case
there is no question of any claim by the personal representatives of the testator’s estate. The estate
has suffered no loss; the effect of the negligence is that the estate passes to different beneficiaries
from those whom the testator intended to benefit. Because neither the client, nor his personal
representatives, can sue, there is a lacuna which justifies imposing a duty to the beneficiaries who
have suffered the loss.
However, 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.
D.1.2. Loss to estate during administration
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 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 beneficiary for any damages received. 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.
32
Indeed, there may be no duty owed by solicitors, acting in the administration of the estate, to the
beneficiaries of the estate, in respect of the solicitors’ conduct of the administration (see Cancer
Research v Ernest Brown [1998] PNLR 592, at B.9.3 above, where Harman J said that to assert that
the solicitors came under a direct duty of their own to the legatees of a Will would put them under a
duty which was wholly outside any previous decision. The solicitors owed their duties to the
executor, their client).
D.1.3. Costs of personal representatives in probate action to set aside later invalid Will
This type of claim is dealt with at C.2 above. Clearly, such a claim is distinct from a classic White v
Jones claim. The claim is not by the disappointed beneficiaries of a Will who, due to the solicitor’s
negligence, have not received the benefits the testator intended. The claim is by the personal
representatives of an earlier Will (in respect of which the solicitor may not have been retained, or in
respect of which there is no allegation of negligence) for damages arising out of the unreasonable
failure by the solicitor to decline to act in the preparation of the later Will, leading to costs being
incurred in probate proceedings to set aside the later Will. The point is that those costs will be
payable out of the estate, with the result that the proper claimants are the personal representatives
(see C5.2 and C.5.4 above).
D.1.4. Breach of contract to client causing loss of value to estate on death
It is possible for a cause of action in contract, arising during the lifetime of the client, to devolve on
his personal representatives on death. Section 1(1) of the Law Reform (Miscellaneous Provisions) Act
1934 provides that on the death of any person ... all causes of action subsisting against or vested in
him shall survive against, or as the case may be, for the benefit of, his estate. Since a cause of action
in contract arises even where no loss has been suffered, that cause of action can devolve on the
deceased’s personal representatives.
In Otter v Church Adams Tatham & Co [1953] 1 Ch 280 Mr Otter had an entailed interest in settled
property. It was open to him during his lifetime to bar the entail so that he would become absolutely
entitled to the settled property. He was negligently advised by the defendant solicitors that he was
already the absolute owner of the settled property, and that there was no need to bar the entail. He
died without having barred the entail, with the result that the settled property did not form part of
his estate. The settled property passed to his uncle as reversioner, so that his estate suffered loss. It
was accepted that a contractual duty was owed to Mr Otter during his lifetime, and that an action in
contract is capable of surviving death. It was also accepted that, had Mr Otter sued in his lifetime, he
would only have recovered nominal damages (because he could have mitigated his loss at little or no
expense by executing a disentailing deed). The court nonetheless held that his personal
representatives could recover substantial damages measured “at the time that the damage
accrues”, i.e. on death. A cause of action arose during his lifetime because he had been deprived of
the opportunity of increasing his estate by executing a disentailing deed. That remained the position
on death. That cause of action vested in his personal representatives on death. The loss, which was
to be measured on death, was substantial, and could be recovered by the personal representatives.
The correctness of the decision was accepted in Corbett v Bond Pearce [2001] 3 All ER 769, at paras.
[16] and [17]. Sir Christopher Slade commented that no decision has been brought to the court’s
attention in which the correctness of the decision in Otter had been questioned. In fact, Otter had
been described as a “strange case” in Sykes v Midland Bank Executor and Trustee Co Ltd [1971] 1 QB
113, 129-130, where Salmon L.J. commented that it was a surprising conclusion that Mr Otter’s
33
estate could recover substantial damages, when Mr Otter himself had suffered only nominal
damages.
In McLellan v Fletcher [1987] NLJ Rep 593 a solicitor was held to be liable to the deceased’s estate
for failing to ensure that a life policy securing a mortgage loan was in force on completion of the
deceased’s purchase of the property. The deceased could never have received the proceeds of the
policy during lifetime. However, McLellan was not followed by Lynne v Gordon Doctors and Walton
(1991) 135 Jo LB 29 on the grounds that the deceased himself had suffered no loss for which the
estate could claim. In conclusion, it is not certain whether Otter represents good law.
However, the correct analysis may be that personal representatives can recover substantial damages
where the deceased did suffer some substantial, as opposed to nominal, loss during his lifetime.
Otter can be so explained. Mr Otter had, in consequence of the solicitor’s negligence, lost the
opportunity to take a step which would have increased the value of his assets during his lifetime. If
he had been advised to disentail during his lifetime, he could have alienated the settled property for
value; without disentailment he could not. He had suffered a substantial loss during his lifetime,
albeit one that could have been mitigated if he had been aware of the solicitor’s negligence.
D.1.5. Breach of duty of care to testator with regard to lifetime transaction causing loss in value
of estate after death
It is not only contractual claims, but also claims in tort, giving rise to loss to the estate, that may be
enforced by the personal representatives (see Rind v Theodore Goddard [2008] PNLR 24, at para.
41). Clarke v Bruce Lance & Co [1988] 1 All ER 364 (see E.10 below) is a case where solicitors had
advised a client in respect of a lifetime transaction (the grant of an option exercisable on the client’s
death) causing a diminution in the value of the entitlement of the claimant (who was a beneficiary
under the client’s Will) following the death of the client. The claim was struck out. One of the
grounds was that - if the solicitors were negligent in failing to advise the client that the grant of the
option was an improvident act - then he during his lifetime had, and his personal representatives
after his death also had, a cause of action against the solicitors. This is consistent with the general
principle that the personal representatives of an estate are the proper claimants where the alleged
negligence has caused loss to the estate.
D.1.6. Loss of severable share in joint property
In Carr-Glynn v Frearsons [1999] Ch 326 (see B.6.1 above and E.9 below) the solicitors failed to
advise the testatrix to sever a joint tenancy in a property, with the result that a half share therein did
not form part of her estate on death passing under her Will. Instead, her beneficial interest passed
by survivorship to the other joint tenant, whom the testatrix did not want to benefit following her
death. The negligence lay in failing to ensure that an asset fell into the estate by advising that a
notice of severance be served promptly. Prima facie, therefore, there was a loss suffered by the
estate. 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. 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.
34
D.2.
Double liability
D.2.1. Introduction
As has been seen in D.1 above, there are circumstances in which a claim can be made by the
personal representatives of the estate. Often it is possible, on the same facts, to posit a claim by
beneficiaries. This gives rise to the possibility of double recovery or double liability, which the courts
are keen to avoid. The defendant solicitors should not have to pay damages twice over for the same
loss; nor, having paid the personal representatives, should they be exposed to a further claim by the
beneficiaries, or vice versa. Furthermore, it was part of the ratio of White v Jones that, if the
beneficiaries were not given a remedy, there would be no other person who could sue the negligent
solicitor. Neither the testator, nor his personal representatives, can sue, having suffered no loss, and
so cannot claim any more than nominal damages. That is the “lacuna” which needs to be filled by
permitting the beneficiaries to claim. This has led the court to conclude, in some of the cases, that if
there are potential claims by both the personal representatives and by the beneficiaries, there is no
lacuna, and the personal representatives, not the beneficiaries, are the correct claimants.
D.2.2. No claim by beneficiaries where personal representatives have claim
In Worby v Rosser [2000] PNLR 140 (see C.5.4 above) the Court of Appeal determined that the
personal representatives of the last valid Will had a cause of action to recover the costs of
beneficiaries, payable out of the estate, incurred in the course of a successful probate claim to set
aside a later Will. The claim had, in fact, been made by the beneficiaries. The claim was dismissed in
part because a White v Jones remedy is provided where there is a breach of duty by the solicitor to
the testator in circumstances in which the persons who have suffered a loss from that breach will
have no recourse unless they can sue in their own right. There was, however, no lacuna to be filled
because the personal representatives could sue in respect of the estate’s loss, including the costs to
which the beneficiary was entitled out of the estate.
This reasoning is, arguably, suspect in that it was unnecessary to rely on the principle that there was
no lacuna in order to deny the beneficiary’s claim. The claim in Worby v Rosser was by the
beneficiaries of a former Will against a solicitor who has prepared a later Will pursuant to the
testator’s instructions, not a claim by the disappointed beneficiaries of a Will who have not obtained
the benefits that the testator intended. It is not a question of the beneficiaries and the personal
representatives of the earlier Will both having potential claims against the solicitor and of the
personal representatives’ claim trumping that of the beneficiaries there being no “lacuna”. On
normal negligence principles, no duty of care is owed by the solicitor to the beneficiaries of a former
Will whereas the personal representatives have a solid claim based on the diminution in the value of
the estate.
In Chappel v Somers & Blake [2003] 3 All ER 1076 (see B.11 and D.1.2 above) the court considered
that the claim was properly brought by the personal representative, and not by the residuary
beneficiary. There was an application to strike out the claim, which had been brought by the
executrix of the estate for loss of income from estate properties during the period of administration
consequent upon the solicitors doing nothing during that period. It was contended that the
residuary devisee of the properties was the proper claimant on the basis that, if the estate had been
wound up earlier, the devisee, not the personal representative, would have received the income.
This argument was rejected in part because there was no lacuna necessitating the grant of a remedy
to the beneficiary. There was a basis upon which it could fairly be said that the executrix could
maintain a claim for the loss that had been suffered, in that the loss of income was suffered during
the period when the properties were vested in the executrix. The executrix should, therefore, be
35
entitled to pursue the claim. In addition, there was no prospect of double recovery. Any damages
recovered by the executrix would be paid to the residuary beneficiary. As the properties had not
been given to a specific legatee, there was no other person who could sue for the same damage.
Given that any damages would ultimately come to the beneficiary, irrespective of who had the right
to sue, the question of whether it was executrix or the beneficiary who could bring the proceedings
was of no great significance. The decision is consistent with the general rule that it is personal
representatives, not beneficiaries, who should bring claims on behalf of the estate (Williams v
Holland [1965] 1 WLR 739, at 734-5).
D.2.2.1. Parties
In conclusion, where loss has been suffered which has the effect of diminishing the value of the
estate in the hands of the personal representatives, and ultimately in the hands of the residuary
beneficiaries, the personal representatives are the proper claimants.
In Chappel v Somers & Blake Neuberger J did, however, order that the residuary beneficiary be
joined as a party to the action in order to avoid any risk of double recovery. It may, therefore, be
sensible for the personal representatives and residuary beneficiaries both to be claimants, or for the
residuary beneficiaries to be joined as defendants to the claim (which they would not contest).
There may be a problem if the executor does not wish to bring the claim on behalf of the residuary
beneficiary, having distributed the residuary estate in which the executor has no beneficial interest.
The executor would no doubt want an indemnity in respect of the costs of the proceedings. If still
unwilling, the beneficiaries could apply to the court for an order directing the executor to bring
proceedings, with the benefit of an indemnity, and to account to the beneficiaries in respect of the
proceeds of the action. Alternatively, the beneficiaries might be entitled to bring derivative
proceedings on behalf of the estate, joining the executor as a defendant on the basis that the
executor has declined to bring proceedings (see H.5 below).
D.2.3. Claim by specific legatee where personal representatives have no claim for substantial
damages
Where the effect of the negligence is that an asset does not, as it should have done, fall into the
estate, prima facie the personal representatives should be the claimants. However, it may be that
the testator instructed the solicitor to include a specific gift of that asset to X. If the personal
representatives recovered damages for the loss of the asset, they would hold those damages on
trust for the residuary beneficiaries whom the testator did not intend to benefit. The specific legatee
would receive no benefit from a successful claim by the personal representatives.
This, in essence, was the position in Carr-Glynn v Frearsons [1999] Ch 326 (see B.6.1 above and E.9
below). In consequence of the solicitor’s negligence the testatrix’s interest in a joint property was
not severed. The testatrix’s interest passed on her death to her nephew, and not under her Will
which included a specific gift of a half share in the property to the testatrix’s niece. The niece sued
for damages.
The Court of Appeal determined that the claim was properly brought by the niece. If she was not
given a remedy, there would be a lacuna. She would be the only person who had suffered a loss, but
would have no claim. The personal representatives would have a valid claim on behalf of the
residuary beneficiaries, but the residuary beneficiaries would have suffered no loss. Following White
Jones it was, therefore, appropriate to fashion a remedy to avoid what would otherwise be an
36
injustice. This illustrates the general principle that beneficiaries can only bring a claim for loss
suffered by them if the personal representatives cannot claim substantial damages.
The Court of Appeal nonetheless considered that, even though the specific legatee was the proper
claimant, the personal representatives could also have a claim, giving rise to the risk of double
liability. It was not the case that the only duty which was owed was to the specific legatee. There
was a duty owed to the testatrix and her estate, and a duty owed to the specific legatee. The duty
owed to the testatrix and her estate was to save them harmless from loss by those interested in the
estate (whether as creditors or as beneficiaries) if effect was not given to the testatrix’s
testamentary intentions. The duty owed to the specific legatee was a duty to take care to ensure
that effect was given to the testatrix's testamentary intentions by ensuring that the specific legatee
did not lose the interest which she would have had as a beneficiary in the estate comprising the
severable half share in the joint property.
These two duties were described as being "complementary", as opposed to being inconsistent. The
rationale was as follows. The duty owed to the specific legatee was not a duty to take care to ensure
that the specific legatee received her legacy. The duty was to give effect to the testator’s
testamentary intentions. If effect had been given to her testamentary intentions, a half share in the
joint property would have formed part of the testatrix’s estate passing under her Will. The Will
would have included a specific gift to the niece, subject to the payment of estate liabilities. The loss
from which the niece was to be saved harmless was the loss of the interest that she would have
received as a beneficiary of the estate comprising the half share.
On that basis, the personal representatives would have a claim to the extent that liabilities need to
be paid out of the specific gift in the ordinary course of administration. (In fact, they would, in the
absence of any intention to the contrary, have been payable in priority out of residue). If there is no
need to resort to the share to meet estate liabilities, and the property subject to the specific gift is
distributable to the specific legatee, the estate has suffered no loss. It was not suggested that there
were any persons interested in the estate, other than the specific legatee, who had suffered loss by
reason of the solicitor's breach of duty. Therefore, the action by the specific legatee was properly
constituted.
It is submitted that the decision makes internal sense. However, it is arguable that the only person
that the testatrix intended to benefit was the specific legatee (the niece). Although this was to be
through the medium of the estate, following a severance of the joint tenancy, the testatrix had no
intention that any other persons, such as creditors, should benefit from her severable share in the
joint property. Therefore, following the death of the testatrix, the only duty owed was to the specific
legatee/niece. There was no competing or even complementary duty owed to the testatrix and her
personal representatives for the benefit of any persons other than the niece. Therefore, the proper
claimant was the niece.
To complicate matters further, there is another possible, inconsistent analysis. In Chappel v Somers
& Blake [2003] 3 All ER 1076 Neuberger J considered that a personal representative, who has
recovered damages in respect of loss of income from property which is the subject of a specific gift,
should account to the specific legatee for the damages, not to the residuary beneficiaries (para.
[31]). On that basis, the personal representative could bring the proceedings.
D.2.3.1. Parties
In any event, the ratio of Clarke is that if the personal representatives have no effective remedy,
because any damages would be payable to the wrong persons, i.e. the residuary beneficiaries, the
specific legatee should be allowed to sue. Chadwick L.J. did, however, say that in any case where
37
there are, or may be, persons interested in the estate (other than the specific legatee) who have
suffered loss by reason of the solicitors’ breach of duty to the testator, it would be appropriate for
both the personal representatives and the specific legatee to be parties to the action, if necessary by
the personal representatives being joined as defendants.
It is suggested that in any case where the specific legatee wishes to bring an action for damages, the
personal representatives should be joined as co-claimants, or as defendants.
D.2.4. No claim by personal representatives where good competing claim by beneficiaries
In Corbett v Bond Pearce [2001] PNLR 31 the claim of personal representatives of the last true Will
to recover the costs of probate proceedings, for the benefit of their residuary beneficiaries, was
dismissed, where there had already been a successful claim by the beneficiaries of a later invalid Will
for the benefits that they would have received under that Will if the solicitors had not been
negligent. For an analysis of the decision, see C.5.5 above.
One of the grounds for dismissing the claim was that if the solicitors were liable to both the
disappointed beneficiaries under the later, invalid Will, and also to the personal representatives
under the earlier Will, there would be double liability. There was a indisputable White v Jones claim
by the disappointed beneficiaries of the later Will. There was, therefore, no scope for another claim
for, in substance, the same loss, by the personal representatives of the earlier valid Will.
This might seem to turn White v Jones on its head in giving primacy to the claim by the beneficiaries
over the claim by the personal representatives. However, that conclusion involves a
misunderstanding of the true position. There was a White v Jones claim by the beneficiaries of the
later Will (who would have benefited thereunder but for the solicitors’ negligence). The
disappointed beneficiaries were entitled to claim damages because they had suffered loss, in
circumstances where neither the testatrix nor her personal representatives could make a claim,
there being no loss to the estate by reason of the beneficiaries not receiving the intended benefits.
The disappointed beneficiaries’ claim was, therefore, valid because a claim by the personal
representatives would not compensate them for their loss.
The personal representatives under the last valid Will then brought proceedings to recover the costs
of the probate action. The better analysis is that they had no claim at all. The testator never
intended to benefit the residuary beneficiaries of the earlier Will after she purported to execute the
later Will. If the solicitors had not been negligent, the residuary beneficiaries of the earlier Will
would not have received anything under that Will. The solicitors had not assumed a duty to save the
residuary beneficiaries of the earlier Will harmless from any loss. Therefore, there was no question
of there being two valid claims, or of the claim by the disappointed beneficiaries trumping that of
the personal representatives. Nor was the claim by the personal representatives of the earlier Will a
White v Jones claim: the solicitor was not negligent in respect of the earlier Will. The personal
representatives of the earlier Will simply had no claim.
It is true that Slade L.J. did state, at para. 32 of his Judgment, that there was a duty owed by the
defendant solicitors (in contract) to the testatrix, and (in tort) to the beneficiaries named in the later,
invalid Will. Following Carr-Glynn v Frearsons, he regarded those duties as being complementary,
with the result that the payment of compensation to the disappointed beneficiaries pursuant to “an
indisputable liability” extinguished the claim of the personal representatives on behalf of the
beneficiaries of the earlier Will. This does look as if he regarded both claims as being valid, but that
of the disappointed beneficiaries as trumping that of the personal representatives. However, the
better analysis is that there was an indisputable liability to the disappointed beneficiaries, and no
38
liability at all to the personal representatives on behalf of the residuary beneficiaries of the earlier
Will.
It is also a fallacy that there were two duties: (a) a duty in contract to the testatrix, and on her death
to the personal representatives of her last true Will, to ensure that the residuary beneficiaries of her
last true Will received their full entitlement undiminished by the costs of a probate action; and (b) a
duty in tort to the disappointed beneficiaries of the later Will to ensure that they received the
benefits under the Will to which the testatrix intended to give effect. There was certainly a duty
under (b). However, as far as (a) is concerned, no loss was suffered by the testatrix in respect of the
costs of the probate action arising after her death; and her personal representatives cannot recover
the costs of the probate action, even though her estate is diminished thereby, because their claim
must be for the benefit of the residuary beneficiaries of the earlier Will, who are not within the
scope of the solicitors’ duty of care.
E.
WHETHER LIABILITY LIMITED TO WILLS
E.1.
White v Jones
The classic White v Jones scenario arises where a solicitor is instructed to prepare a Will conferring a
benefit on X, but fails to do so effectively or at all. The liability arises out of the breach of duty to the
testator to exercise competence in giving effect to the testator’s instructions to confer a
testamentary benefit on X. The relevant retainer is, therefore, to prepare a Will or Codicil. The
judgments in White v Jones indicate that their Lordships considered that liability was confined to
cases where a solicitor negligently drafted or failed to draft a Will, and the testator had died, with
the result that the testator or his estate has no effective remedy.
On that basis, Lord Goff considered (White v Jones [1995] 2 AC 207, at 265) that, if a solicitor was
responsible for misdirecting a lifetime gift to the wrong donee, the client could either recover the
gift from the recipient or, if he could not, he could sue the solicitor for damages. If the donor fails to
make an effective gift, and then changes his mind and decides not to perfect the gift, the intended
donee cannot sue the solicitor because the donor is able to do what he wishes to put the matter
right (at 262).
Lord Browne-Wilkinson considered that the position was different in the case of a Will (276). First,
there can be no conflict of interest between the testator and the intended beneficiary. Both would
want the beneficiary to receive the intended testamentary gift and, if that is not possible, to receive
compensation. It would not be a case where the donor decides not to perfect an imperfect gift.
Second, in the case of a negligently drawn Will (which does not take effect until after death) the
negligence will often remain hidden until it takes effect on the death of the testator, i.e. at the very
point in time when normally the error will be incapable of remedy. By contrast, in the case of a
lifetime transaction, the transaction takes immediate effect (or not, as the case may be) and the
consequences of the negligence are immediately apparent. However, these comments were obiter.
E.2
Extensions of White v Jones
There are cases in which the courts have extended, or purported to extend, a White v Jones liability
to persons other than the solicitor’s client in negligence in connection with a lifetime transaction
which has caused loss to persons whom the client wished to benefit (see A.1 above). Some of those
cases do not even involve negligence in the preparation of a Will or a duty owed to the beneficiaries
of such a Will. However, in most of the cases, there is at least a contract between a client and a
39
solicitor or professional to prepare a document, or to give advice, for the purposes of the client
conferring a benefit on an indentified third party, with whom there is no contractual relationship.
That benefit may be one which will only be conferred on the death of the client, or it may be an
immediate benefit. In any event, the negligence causes loss to the third party, who does not receive
the expected benefit. The client has suffered no loss and/or there is some other reason why he
cannot remedy the position if necessary by suing the solicitor. The third party, who has suffered
substantial loss, is, therefore, given a remedy in tort to claim damages from the solicitor or other
professional.
E.3.
Imperfect gifts
In Hemmens v Wilson Browne [1995] Ch 223 a solicitor was instructed by a client to draft a
document giving the claimant an immediate enforceable right to call on him to pay her the sum of
£110,000. The executed document failed to confer any enforceable rights on the claimant. When the
claimant sought to compel the client to make a payment he refused.
The claim was dismissed on the basis that it was not fair, just and reasonable to impose a duty on
the solicitor given that:
(1) The donor was still alive and could put the matter right. No irremediable situation had
occurred which had put it beyond his power to rectify the situation. He was not dead,
insane, insolvent, bankrupt, no third parties had acquired any interest in the subject
matter of the gift, and tax had not become payable which would not have been payable
if the document been appropriately drafted. In short, the only reason why the situation
had not been rectified was that the donor had changed his mind.
(2) It was not a case in which a negligent solicitor would go scot-free if the law provides no
remedy to the claimant. The donor could treat the contract as repudiated and refuse to
pay the bill. If he has already paid, he can retain another solicitor to draft an
appropriate document and recover the additional charges as damages for breach of
contract. The donor had not chosen to go to another solicitor to put the matter right,
although it was within his power to do so.
(3) The solicitor had not assumed a responsibility for the claimant’s interests as he had told
her to consult her own solicitors if she had any doubt about the effectiveness of the
transaction.
The case was decided after White v Jones in the Court of Appeal, but before the House of Lords’
decision. However, it is consistent with obiter comments made by their Lordships (see E.1 above).
One possible justification of the decision in Hemmens is that the client had waived the breach of
duty. If there is no duty to the client, there can be no duty to the person whom the client wishes to
benefit (see A.4 above). There is also no policy justification for the imposition of a duty to the
intended donee where the donor has changed his mind and, therefore, no impulse to do practical
justice by giving a remedy to the donee. The fact that the donor also has a remedy is, however, less
convincing as a reason for refusing relief. If the donor does not wish to proceed with the gift, he will
not be pursuing any remedy against the solicitor. It is irrelevant that, if he did wish to proceed with
the gift (which he does not) he would have a remedy.
It is not clear what the position would be if the donor could not perfect the gift because, for
instance, he has died or become incapacitated. In White v Jones [1995] 2 AC 207 Lord Goff did say
(at 262C) that there was some authority that, exceptionally, equity would perfect an imperfect gift if
the donor has died or become incapacitated: see Lister v Hodgson (1867) LR 4 Eq 30, 34-5. If the gift
was ineffective due to defective drafting of the instrument of transfer, the court could rectify the
instrument after the death of the donor if satisfied that this is necessary to give effect to the donor’s
intentions (see Van der Linde v Van der Linde [1947] Ch 306). If, however, the donor instructed the
40
solicitor to prepare documentation giving effect to the gift, the solicitor delayed, and the donor then
died, the intended donee might, perhaps, have a claim against the solicitor for failure to procure an
effective gift in reasonable time before the death of the donor.
E.4. Misdirected gifts
In Hemmens v Wilson Browne [1995] Ch 223 Judge Moseley Q.C. said: “I can well understand that if
a settlor, acting on the advice of his solicitor, executes an irrevocable deed of settlement, conferring
benefits on X instead of, as intended, Y, the solicitor may owe a duty of care not only to the settlor,
but also to Y. In such circumstances, leaving aside the possibility of rectification, it will be beyond the
power of the settlor, though still alive, to put matters right, and Y will be able to prove an
identifiable loss.”
However, in White v Jones [1995] 2 AC 207, Lord Goff had stated (at 265) that, if a solicitor was
responsible for misdirecting a lifetime gift to the wrong donee, the client could either recover the
gift from the recipient or, if he could not, he could sue the solicitor for damages. However, it is
possible that the client could not recover the gift, and also that he might not be entitled to recover
substantial damages on the basis that he has suffered no loss. The intended donee might have a
remedy against the solicitors in those circumstances.
E.5 Gifts to trust which fail to confer the intended benefit
In Hemmens v Wilson Browne [1995] Ch 223 Judge Moseley Q.C. said that he could well understand
that a duty of care might be owed by a solicitor to an employee for whose benefit that solicitor is
retained by the employer to draft an effective tax avoidance scheme. If the scheme is ineffective, the
tax will be payable and it will be beyond the ability of the employer, even if still alive, to put matters
right.
Hughes v Richards [2004] PNLR 706 involved a similar problem in that an accountant had negligently
advised that an offshore trust should be set up for the benefit of the clients’ children. The vehicle
chosen proved not to be tax effective. A claim to strike out a claim in negligence by the children
failed. The issue was described as follows: “When A contracts with B to perform professional
services in connection with the establishment of a trust for the benefit of C and B is negligent in the
performance of those services with the result that C receives no benefit from the trust, does A or C
have a remedy in tort against B?”.
Mr and Mrs Richards wished to set up a trust with £100,000, before the deduction of tax, for the
benefit of their children. The defendant accountant advised them to set up a series of complex
offshore trust arrangements in order to avoid tax. However, no tax was saved, and the fund was
used up in fees, charges and tax liabilities, with the result that no sums were paid out of the trust for
the benefit of the children. A claim was brought against the accountant in the name of the children
as beneficiaries of the trust alleging that the accountant had assumed a responsibility to the
beneficiaries to advise as to a more suitable investment and also to monitor the performance of the
investment. The defendant applied to strike out the claim on the basis that he owed the
beneficiaries no duty of care.
It was argued, on behalf of the defendant, that it was the parents who had suffered the relevant
loss. They had provided the relevant funds which had been wasted due to the negligence of the
solicitors. They, therefore, had a claim in damages, which meant that the children should not have a
claim, since there was no lacuna. It was argued, on behalf of the children, as their primary case, that
41
it was the children who had suffered the relevant loss. The children had not received the benefit that
the parents intended. Their loss was the value of the fund which, if properly invested, would have
been held in trust. There was a tactical advantage in claiming that the children had the better claim.
There was an alternative claim by the parents, but it was subject to a possible limitation defence,
and the children were legally aided, whereas the parents were not.
The Judge at first instance refused to strike out the claim, and the Court of Appeal decided that he
has not erred in exercising his discretion. Furthermore, it was not appropriate to strike out a claim
unless certain that it was bound to fail. The issue of whether a professional could owe a duty of care
to a person other than his client was an uncertain and developing area of law in which a strike out
was inappropriate.
Gibson L.J. accepted that there was a strongly arguable case that the parents and not the children
were owed a duty of care. However, he would not go so far as to say that it was certain that the
children’s claim would fail. He referred to the obiter comments of their Lordships in White v Jones
(see E.1 above) to the effect that there could be no liability to persons other than the client in
respect of lifetime gifts. However, it was not obvious that those comments covered an example
corresponding to the circumstances of the case, where the gift was neither imperfect nor
misdirected, nor were the consequences immediately apparent, but only emerged several years
after the scheme was implemented. Nor were the views tested by consideration of what would be
the position if the donor dies or became bankrupt or was denied the remedy by reason of a
limitation defence.
It is submitted that a duty of care was owed to the children, who had suffered the relevant loss. The
parents’ sole purpose was to benefit the children. They never intended to retain any benefit for
themselves. But for the accountant’s negligence, the children would have benefited from a suitable
investment in which the parents would have had no interest. To that extent, the parents had not
suffered any loss. The case was not one of an imperfect gift where the donor changes his mind and
decides not to perfect the gift. The parents had perfected the gift, and it remained their intention to
benefit their children. The complaint was that the gift was of no value to the children. There was no
conflict of interest between the parents and their children. There was close proximity between the
accountant and the children who, to the accountant’s knowledge, were not being independently
advised. Not only was it foreseeable that the children would suffer loss from his negligent advice,
but there was, in effect, an assumption of responsibility to the children on the basis that the
accountant was giving advice for the benefit of the whole family. There was also no question of an
indeterminate liability to an indeterminate class.
E.6. Contractual claim by family members
In Richards v Hughes [2004] PNLR 706 Jacob L.J. considered that there was an alternative, arguable,
ground of liability. The defendant accountant should be regarded as acting not only for the parents,
but also for the children. There was, arguably, a contractual duty owed to the children.
One possible analysis is that where parents seek financial advice for the benefit of their children, the
children should be entitled to claim under the contract, pursuant to the Contracts (Rights of Third
Parties) Act 1999, on the basis that the contract purports to benefit the children.
However, in more commercial circumstances, where, for instance, a solicitor has been instructed by
a borrower to confer an effective security on his lender, an implied contract of retainer has not
generally been recognised. In Dean v Allen & Watts [2001] EWCA Civ 758 the test adopted was
whether an objective consideration of all the circumstances make it so clear that a retainer arises
that the solicitor himself ought to have appreciated it. It is a material factor, but not conclusive
42
against the existence of a retainer, that the claimant is not liable for the solicitor’s fees and did not
directly instruct the solicitors. The fact that there has been a retainer in the past may point towards
a continuing retainer (see Hines v Willans [2002] WTLR 299), particularly if the solicitor has not
advised the claimant to seek independent advice. In Dean the solicitor’s instructions came from the
borrower, not the lender/claimant; the solicitor gave no express advice to the claimant about the
security; and, on one of the relevant transactions, the solicitor had made it clear that he could not
act for the claimant. In Searles v Cann & Hallett [1999] PNLR 494 no retainer was found to exist
between the solicitor and the lender, with regard to security being provided by the borrower, either
expressly, orally, or by conduct. There was nothing in the previous course of dealings, or in the
course of the relevant transaction, which clearly pointed to the existence of a contractual
relationship.
E.7. Defective pension advice affecting dependents’ entitlement after death of client
In Gorham v BT [2000] 1 WLR 2129 Mr Gorham sought advice from Standard Life in respect of
pension and life insurance cover, making it clear that his first priority was to provide for his wife and
children in the event that he predeceased them. Standard Life sold him a personal pension plan,
negligently failing to advise him that his employer’s (BT’s) occupational pension scheme was
superior. Mr Gorham died. Mrs Gorham brought an action against the insurance company, on her
own behalf and that of her children, for damages for the loss of pension rights under the employer’s
scheme, including a lump sum death in service benefit. She alleged that the insurance company
owed a duty of care to herself and her children as potential beneficiaries of the pension and life
insurance arrangements.
The Court of Appeal held that a duty of care was owed to Mrs Gorham and the children. The position
of an investor who goes to a financial adviser seeking investment or pensions advice in relation to
make provision for his family after his death is analogous to a White v Jones case where a person
goes to a solicitor seeking advice in relation to making provision by Will for his family after his death.
The adviser’s assumption of responsibility towards the investor extends to the intended beneficiary
who (as the financial adviser can reasonably foresee) may, as a result of the adviser’s negligence, be
deprived of an intended benefit and who, in a very real sense, is dependent upon the dealings
between the adviser and the person seeking advice to safeguard his position. It was fundamental to
the giving and receiving of advice upon a scheme for pension provision and life insurance that the
interests of the customer’s dependents will arise for consideration. Practical justice required that
disappointed beneficiaries should have a remedy against an insurance company in such
circumstances. Advice was expected and was directed not only to the interests of Mr Gorham but to
the interests of his dependents should he predecease them.
There was no conflict between the interests of Mr Gorham and of his family. The duty was not one
to ensure that his family were properly provided for (which might conflict with his wish to do the
best he could for himself by way of pension during his lifetime). It was a duty to the family not to
give negligent advice to Mr Gorham which adversely affected their interests as he intended them to
be.
As it happened, the claim failed on causation. Mr Gorham was, after the initial advice, correctly
informed that BT’s scheme was better, but he failed to make any inquiries with BT as to whether he
was covered by their scheme.
In any event, the case does confirm that there may be a White v Jones liability in respect of negligent
advice concerning a lifetime transaction which is intended to confer a benefit on identified persons
after the death of the client. Pill L.J. distinguished the case from one where a donor decides not to
43
perfect an imperfect gift where the chain of causation is broken because the donor had the
opportunity to perfect the gift but chose not to do so. Mr Gorham had died, and neither he nor his
estate had suffered any loss. His dependents had suffered a loss, and practical justice required that
they should be given a remedy.
E.8.
Advice sought by X for the benefit of Y in regard to transaction between X and Y, where no
conflict of interest, causing loss to Y, but no loss to X
In Killick v Pricewaterhouse Coopers [2001] PNLR 1 the directors of a company instructed
Pricewaterhouse to value the shares held by the executors of the estate of a shareholder pursuant
to a compulsory buy-back provision in the company’s articles of association. The claimants alleged
that the shares had been undervalued by £30 million. One issue was whether accountants,
instructed by a company to perform a valuation of the company’s shares, thereby setting the price at
which the shares were to be compulsorily acquired pursuant to the company’s articles of
association, owed the executors a duty of care in the conduct of the valuation.
Neuberger J held that there was a duty of care owed to the executors, even though it was the
company with whom there was a contractual relationship. The defendants were appointed for the
purpose of valuing shares for a specific purpose known to them in circumstances where there was
no possibility of the executors challenging the valuation or obtaining insurance against the
negligence of the defendants. The liability would be defined and limited. The defendants could have
refused the appointment or sought a larger fee or more comprehensive insurance cover, whereas
the claimants could not. The claimants were not involved in the appointment of the defendants, nor
could they be. The defendants' terms did not exclude liability for negligence to third parties. No one
other than the claimants could sue. It was a material factor (following White v Jones) that, if the
valuation was negligent, then no one else other than the executors could sue. The company had
suffered no loss (as it had acquired the shares at an undervalue).
The same analysis has been applied in two cases where a borrower has instructed a solicitor to
confer effective security on a lender, but where, due to the solicitor’s negligence, the security is
ineffective. The solicitor was held to have owed a duty of care to the lender, despite the absence of
a retainer. In Dean v Allin & Watts [2001] EWCA Civ 758 the foundation of liability was that the
solicitor knew that the solicitor knew that the borrower wished to confer an effective security on the
lender, that such security was fundamental to the transactions which he was instructed to effect,
and that there was an identity of interest between borrower and lender. However, Robert Walker
L.J. did not see this as an extension of White v Jones, but as an example of an exceptional case
where it is fair, just and reasonable to impose a duty on a solicitor to someone other than his client.
In Searles v Cann & Hallett [1999] PNLR 494 the Judge considered that the position of the lender,
who has not been provided with effective security by the borrower’s solicitor, was akin to that of the
disappointed beneficiaries in White v Jones. The defaulting borrower has a right of action against the
solicitor in contract, but has suffered no loss. The lender has suffered no loss, but apart from the
existence of a duty of care has no claim. The tests of foreseeability and proximity were satisfied, and
it was fair, just and reasonable to impose some liability.
Clearly, the result would have been different if there had been any conflict of interest between
borrower and lender (see Clarke v Bruce Lance & Co [1988] 1 All ER 364 , at E.10 below) . However,
there was no such conflict. The borrower needed to be able to confer an effective security on the
lender in order to obtain the loan. The borrower and the lender, therefore, had a common interest
in the solicitor acting competently, just as much as where a client wishes to benefit his family (see
Richards v Hughes [2004] PNLR 706, at E.6 above).
44
E.9.
Notices of severance of joint tenancy
The solicitor’s duty may extend to lifetime steps that are integral to the carrying into effect of the
testator’s intention to make a Will, or which are part of the Will-making process. For instance, there
will be a duty to advise that a joint tenancy be severed if the testator’s instructions include a gift of
the testator’s interest in joint property.
In Carr-Glynn v Frearsons [1999] Ch 326 (see B.6.1 above) the testatrix wanted to leave a half share
in joint property to her niece. However, the joint tenancy was not severed, and the Will was
ineffective to pass any interest in the joint property to the niece (the testatrix’s interest passing by
survivorship to her nephew).
The solicitor’s liability to the niece did not arise out a failure to procure the execution of a valid Will.
The lack of care lay in failing to ensure that an asset fell into the estate by advising that notice of
severance be served promptly. It was, however, held that advice as to the severance of the joint
tenancy was integral to the carrying into effect of the testatrix’s intention that her share in the
property should pass to the niece under her Will. Service of a notice of severance was part of the
Will-making process. The niece was as much an intended beneficiary of the severance as of the gift
in the Will.
The service of a notice of severance is a lifetime transaction. However, it is no great step to extend a
White v Jones duty to an intended beneficiary of the severance, given that the severance will be
effected with a view to that person benefiting under the client’s Will.
E.10.
No general liability to beneficiaries of estate for advice to client re lifetime transaction
There may be cases where the solicitor has given negligent advice to a client in respect of a lifetime
transaction, which nonetheless causes loss to the beneficiaries of the client’s Will following his
death. Generally, the beneficiaries will not be entitled to recover damages from the solicitor.
In Clarke v Bruce Lance & Co [1988] 1 All ER 364 the testator had made a Will containing a devise of
a service station upon trusts under which the claimant was the remainder beneficiary. The Will was
drafted by the defendant firm. 5 years later he instructed the same firm to advise on the grant of an
option to the tenant of the service station at a fixed price within 6 months of the death of the client
or his wife, whichever was later. By the date of his death the value of the service station had
increased substantially with the result that the value of the claimant’s entitlement was reduced. The
claimant brought an action against the solicitors claiming damages for negligence, contending that
the solicitors had breached the duty that they owed to the testator, and to the claimant as
beneficiary (knowing that his interest under the Will would be affected). It was alleged that they
ought to have advised the testator that the fixed price option was an uncommercial transaction. The
action was struck out.
The case was decided before White v Jones, applying a test of proximity as to whether a duty of care
was owed by the solicitors to a beneficiary of their client’s Will. It was held that there was no such
proximity on the following grounds:
(1)
There was no close degree of proximity between the claimant and the defendants. When the
defendants were instructed to prepare the documentation, containing the grant of the option,
there was no reason why they should have been expected to contemplate the claimant as a
person likely to be affected by any lack of care on their part. In no way could it be said that the
solicitor's contemplation of the claimant in relation to the grant of the option was "actual,
nominate and direct".
45
(2)
(3)
(4)
The grant of the option did not have as its object the benefit of the claimant. There was an
obvious conflict of interest between the interests of the testator and those of the claimant. If
the testator had been warned that the grant of the option was improvident from the point of
view of the beneficiaries under his Will, he might nonetheless have wanted to proceed, given
that the option was part of a wider transaction.
If a duty was owed to the claimant, it was also owed to anyone to whom the testator might
give the property during his lifetime or by his Will. If, therefore, a duty was owed to anyone
other than their client, it would also be owed to the whole of an indeterminate class of
potential donees or beneficiaries. That would expose them to a "liability in an indeterminate
amount for an indeterminate time to an indeterminate class”.
This was not a case where there was no other effective remedy. If the solicitors were negligent
in failing to advise the testator that the grant of the option was an improvident act, then he
during his lifetime had, and his personal representatives after his death have, a cause of action
against the solicitors. If a duty were to be owed to the claimant, the solicitors would be at risk
of paying damages twice over, since any damages awarded to the estate would not enure to
the benefit of the claimant, as specific devisee, but to the residuary beneficiaries.
It is submitted that the decision is correct, given the conflict between the interests of the testator
and his beneficiaries. However, the objection that there may be liability to an indeterminate class
should not in itself be a blanket objection to a claim by beneficiaries of an estate that negligent
advice has been given to the deceased in respect of a lifetime transaction. It may be that the nature
of the transaction is such that it is readily foreseeable that the beneficiaries of the client’s estate
(who may even be identified) are likely to be affected. If then, there is no conflict between the
interests of the client and the beneficiaries of his estate, it is possible that there could be liability to
the beneficiaries. In fact, the key question is whether the object of the transaction is to benefit the
beneficiaries of the estate, or at least not to prejudice their interests (see E.10.1 below).
E.10.1. Possible liability to beneficiaries of estate re lifetime advice to client where intention that
beneficiaries’ entitlement should not be affected
There may be an exception to the general rule, stated at E.8 above, where the purpose of the
lifetime transaction is to ensure that the beneficiaries of the estate continue to benefit, or are not
adversely affected. Certainly, a duty may be owed to the beneficiaries of the client’s estate under an
existing Will of which the solicitor is aware.
In Punford v Gilberts Accountants [1998] PNLR 763 the Court of Appeal was prepared to accept
(distinguishing Clarke v Bruce Lance & Co) for the purposes of a strike-out application that, as a
matter of law, a professional man, who has undertaken the preparation of a Will or who has advised
in regard to a Will intending to benefit a named third party, owes a duty to that third party when
giving subsequent advice to the testator which is intended to ensure that his instructions as
expressed in the Will continue to benefit the third party, in the event that such advice is found to
have been given negligently and the benefit in favour of the third party is defeated.
In Punford solicitors had drafted the testator’s Will whereby the testator left his residuary estate
upon trust for his wife for life, and subject thereto, upon trust to transfer his house to his son. The
solicitors subsequently advised in connection with the transfer of the house by the testator to his
wife and himself as beneficial joint tenants. The testator died. His interest in the house passed to his
wife. She sold the house and gave the proceeds to another son. The claim was that the solicitors
should have advised the testator that the effect of the transfer would be to defeat his testamentary
gift, if he were to die before his wife. However, the purpose of the transfer was not to ensure that
the Will continued to benefit the claimant son. On the contrary, it must have been perfectly obvious
46
to the testator that the transfer to himself and his wife as beneficial joint tenants would make it
impossible for the testamentary gift of the house in favour of the claimant to take effect in the event
of him predeceasing his wife.
Punford is, therefore, a case where the interests of the client in effecting the lifetime transaction
may conflict with those of the beneficiaries of the client’s Will. However, it does not rule out liability
where there is no such conflict.
In any event, a solicitor would be well advised to ask a client, for whom he acts in a lifetime
transaction, whether he would like to review his Will in the light of that transaction, particularly if
the solicitor drafted the client’s Will. What if a solicitor is asked to act on the sale of his client’s
house? The client, as the solicitor knows, has made a specific devise of the house to X in his Will, his
residuary estate being left to other beneficiaries. The gift of the house will adeem on sale. The
solicitor could conceivably owe a duty to X if he fails to advise the client to review his Will so that he
can consider making a substitute gift of his new house, or some other asset, to X. Or, following
Punford, would it be so obvious to the client that the devise would fail, that the solicitor would
escape liability?
E.11.
Post-death tax planning advice
In Cancer Research Campaign v Ernest Brown [1998] PNLR 592 Harman J held that there was no duty
owed by a solicitor to a client, who instructs the solicitor to prepare a Will, to give post-death tax
planning advice, e.g. to execute a deed of variation in another estate (see B.9.3 above). This does
not necessarily mean that there can be no liability to the beneficiaries of a client’s estate for
negligent advice in connection with a deed of variation, which the solicitor has prepared, even
though the deed of variation is a lifetime transaction (see B.9.4 above). The object of the transaction
is to benefit the beneficiaries of the client’s estate after his death.
F.
INHERITANCE TAX PLANNING AND LIFETIME GIFTS
F.1.
Daniels v Thompson
A problematical area is whether a professional, giving tax advice to a client in respect of a lifetime
transaction, may be liable to the personal representatives or beneficiaries of the client’s estate, in
the event that the tax advice is negligent, causing additional tax to be paid in the client’s estate.
The leading case is Daniels v Thompson [2004] EWCA Civ 307. In 1989 Mrs Daniels retained the
defendant solicitors to give tax planning advice. She gave her house to her son pursuant to advice
that the gift would be exempt from IHT if she survived for 7 years. However, she continued to live in
the house rent-free until her death in 1998. This meant that she reserved a benefit for IHT purposes,
and IHT was payable on her death in respect of the value of the house. This was something of which
Mrs Daniels had not been advised. Mrs Daniels’ son issued negligence proceedings in May 2002. His
pleaded case was that he was entitled to damages as personal representative on behalf of Mrs
Daniels’ estate in respect of a breach of duty owed to Mrs Daniels in giving her defective taxplanning advice. The defendant solicitors asserted that the claim was statute barred since, in effect,
the loss arose at the date of the gift, which was more than 6 years before the commencement of
proceedings. The claimant claimed that the claim in tort was not statute-barred since no loss was
suffered until Mrs Daniels’ death.
47
The cause of action in contract was clearly statute barred. Any cause of action in tort would,
however, only arise when loss was suffered. The pertinent question was, therefore, when the
relevant loss was suffered.
However, the Court of Appeal determined the case on more fundamental grounds than limitation. It
held that Mrs Daniels had suffered no loss in her lifetime. She was never at any risk of having to pay
any IHT. That was a risk to which the estate, and the estate alone, was exposed, since liability to pay
IHT only arises on death (para. 34).
Therefore, there was no cause of action which could accrue to her personal representative on her
death under s. 1 of the Law Reform (Miscellaneous Provisions) Act 1934. No issue of limitation arose.
The argument (to overcome the limitation defence) that the claimant did not suffer loss until the
death of Mrs Daniels amounted to an implied admission that Mrs Daniels did not have a cause of
action (in which case the pleaded case was bound to fail).
If, however, Mrs Daniels did have a cause of action during her lifetime, then it arose when she relied
on the defendant’s advice by making the gift with a reservation. On that alternative basis the claim
was statute barred.
F.2.
Alternative claim by personal representatives
An application was, however, made to amend the claim so as to plead that the solicitors owed a
direct duty to Mrs Daniels’ personal representatives (as opposed to a duty to Mrs Daniels devolving
on her personal representatives on her death). The argument was that the personal representative
had obtained a cause of action as soon as Mrs Daniels died when the personal representative
became liable to pay additional IHT. In this way it was hoped: (a) to establish a cause of action and
(b) to argue that the cause of action was not statute barred since it only arose on the death of Mrs
Daniels when the liability for IHT arose.
However, the Court of Appeal refused to allow this amendment. In part, this was because the
application was made very late in the day, and the costs of allowing an amendment would be
disproportionate. However, the application to amend was also rejected on the grounds that the
amended claim had no real prospect of success.
F.3.
Damages recoverable by deceased during lifetime
However, the Court of Appeal did accept that any legal costs incurred in taking advice, and of any
reasonable remedial steps taken to make good the deficiency, are recoverable before death (Daniels
v Thompson, para. [36]). Presumably, any tax liability of the client incurred in taking reasonable
remedial steps would also be recoverable. To that extent the client has a cause of action during his
or her lifetime. It was also accepted that Mrs Daniels might have been able to claim repayment of
fees for the performance of services that were worthless, in restitution, on the basis that payment
was made for no consideration (para. 40).
This may mean that the client has a cause of action during lifetime to recover the costs of taking
advice in respect of a failed IHT scheme, and in respect of any remedial steps, even if there is no
cause of action in respect of the IHT liability itself. Presumably, however, the client could not claim
an indemnity in respect of IHT payable by his estate following death, since the client has no cause of
action with respect to the IHT.
48
F.4.
Contractual cause of action of deceased devolving on personal representatives
A contractual claim by the personal representatives was not considered in Daniels v Thompson
because such a claim would have been statute-barred. The cause of action in contract arose when
the tax advice was given (which was more than 6 years before the commencement of proceedings).
It is not clear whether a contractual claim could have been made in Daniels by the personal
representatives if the claim had been made within the limitation period. In Rind v Theodore
Goddard [2008] PNLR 459 Morgan J commented that the Court of Appeal in Daniels did not discuss
in any detail a possible claim in contract, nor whether it would give rise to substantial or nominal
damages.
Morgan J also referred to the case of Otter v Church Adams Tatham & Co [1953] 1 Ch 280 (see D.1.4
above) as authority for the proposition that personal representatives may claim substantial damages
in respect of a contractual claim, vested in the deceased, measured by the loss which accrues on
death. He commented that Otter was not referred to in Daniels v Thompson.
It is submitted that, where the claim is, as in Daniels, to recover an IHT liability arising on death, the
personal representatives do not have a contractual claim against the negligent solicitor in respect of
that IHT liability. Otter is distinguishable. In Otter Mr Otter had lost the opportunity to take a step
which would have increased the value of his assets during his lifetime. If he had been advised to
disentail, he could have alienated the settled property for value; without disentailment he could not.
He had suffered a substantial loss during his lifetime, albeit one that could have been mitigated if he
had been aware of the solicitor’s negligence. By contrast, in Daniels Mrs Daniels had suffered no loss
during her lifetime by reason of the IHT liability in her estate arising after her death. She was never
exposed to an IHT liability during her lifetime.
In the Scottish case of Matthews v Hunter & Robertson Ltd [2008] PNLR 35 (a case involving loss to
the estate by reason of the solicitors’ failure to effect the Scottish equivalent of severance of a joint
tenancy) the Court of Session accepted, for present purposes, that the client never suffered loss,
albeit subject to the express reservation that the matter was not free from difficulty.
Even if the deceased, and his personal representatives, have or had a cause of action in contract, the
limitation treatment of a contract claim would almost always mean that the claim in contract would
not be available, since the normal limitation period is 6 years. In many cases, the negligence will only
come to light more than 6 years after the breach of contract, i.e. when the defective advice was
given.
F.5.
Cause of action in tort devolving on personal representatives
Daniels v Thompson is authority for the proposition that - since no cause of action in tort accrues to
a person unless that person has suffered loss - the client has no cause of action in tort respect of a
liability arising on death (such as IHT) during his lifetime. Consequently, no cause of action in tort can
devolve on the client’s personal representatives following the client’s death. Mrs Daniels had not
suffered any detriment capable of assessment in money terms in respect of her frustrated wish to
confer on her son the benefit of a reduction in the IHT liability of her estate.
In Rind v Theodore Goddard [2008] PNLR 24 Morgan J referred to a number of cases where a cause
of action in tort vested in personal representatives on death (paras. 41 to 44; see D.1.5 above).
However, none of those cases related to IHT, which is a liability only arising on death. By contrast, in
Clarke v Bruce Lance & Co [1988] 1 All ER 364 (one of the cases cited) it was stated that the client
49
would have had a cause of action during his lifetime, and that his personal representatives would
have a cause of action on his death. The client had a cause of action in his lifetime, having suffered
loss during his lifetime by reason of the diminution in the value of his property.
In conclusion, personal representatives should not be entitled to enforce a cause of action in tort, in
respect of IHT payable on death, to which the client was entitled during lifetime. The client had no
cause of action in her lifetime, having suffered no loss.
F.6.
Claim by personal representatives in own right
Daniels v Thompson supports the conclusion that personal representatives themselves do not, in
their own right, have a cause of action in respect of any IHT liability arising on death. In Daniels the
Court of Appeal refused permission to amend the pleadings to make such a claim, not only because
of the lateness of the application, but also on the merits, on the basis that the claimant suffered no
loss in his capacity as executor, since he could recover any IHT payable by him out of the estate
(paras. 47, 57, 61, 68, 75). The executor may have less to distribute. However, as his only duty is to
distribute what comes into his hands, he has suffered no loss. In reaching this conclusion, their
Lordships expressly rejected the reasoning of Park L.J. in Macaulay v Premium Life Assurance Lexis,
29 Apr 1999 where there was a claim by executors of an estate in respect of negligent IHT advice. In
Macaulay there was a preliminary issue of whether the claim was statute barred (the advice having
been acted upon more than 6 years before the commencement of the limitation period). It was held
that the claim was not statute barred because the IHT liability only arose on the death of the client,
and did not exist before that date. Park J regarded it as significant that the liability to IHT of personal
representatives is not a liability imposed on the deceased by statute, but directly on the personal
representatives as such. This reasoning was, however, rejected in Daniels v Thompson. The
imposition of liability on the personal representatives was no more than a reflection of the fact that
it cannot be imposed on the deceased (para. 61).
However, the statements in Daniels v Thompson that the personal representative would not have
suffered loss by payment of additional IHT (which were, in any event, obiter) are inconsistent with
the decision in Chappel v Somers & Blake [2003] PNLR 730 (see B.11 and D.1.2 above). It is
submitted that a personal representative may suffer loss, i.e. loss to the estate during the period of
administration, including payment of additional IHT, even though the personal representative is only
obliged to account to the residuary beneficiaries for assets in the hands of the personal
representative. Chappel was decided before Daniels v Thompson, but is not referred to in the
judgments in Daniels, which would suggest that it was not cited.
However, whilst the personal representatives may have suffered recoverable loss, it does not
necessarily follow that they are owed a duty of care by solicitors giving tax advice in respect of a
lifetime gift. The Scottish case of Matthews v Hunter Robertson Ltd [2008] PNLR 35 supports Daniels
in denying that any duty is owed to personal representatives as such. In Matthews the Court of
Session rejected the proposition that damages for loss constituted by diminution of the estate can
be sued for by an executor as being entirely unsupported by Scottish, English or any other authority.
As a matter of principle, it was denied that any duty was owed by a solicitor to the post mortem
estate of their client as represented by the individual who eventually comes to accept the office of
executor. There was insufficient proximity in the relationship between a solicitor instructed in
respect of a specific transaction and a yet to be appointed executor of the client in respect of an
interest that the client could never have. In addition, it would not be fair and just to impose a duty
given that the claim would only become actionable on, and the limitation period only run from, the
client’s death, which might be a number of decades after the conclusion of the relevant transaction.
50
It is submitted that, as a matter of English law, there may be sufficient proximity between the
solicitor and the client’s estate, even if the solicitor is unaware of any appointment of executors
made in the client’s Will, or even if the executor is yet to be appointed. Arguably, all that should be
required is that the solicitor is, or should be, aware that the advice is being provided for the benefit
of the client’s estate after he is dead, even if the identity of the executors is not known. There are
cases where the courts have found that a duty exists to personal representatives (see D.1 above).
However, it remains an open question in English law as to whether personal representatives may
owe a duty directly to the personal representatives, as such, in respect of IHT payable by the
personal representatives.
F.7.
Claim by beneficiaries
In Daniels v Thompson it was left open as to whether the residuary beneficiaries of the estate might
have a cause of action against the solicitors. Carnwarth L.J. said at para. [58]:
“It is important to emphasise that we are not dealing with a claim in respect of a duty
owed to Mr Daniels in his capacity as a potential beneficiary, under the principles in
White v Jones. Whether such a claim could be made is not an issue before us, even
under the proposed amendment.”
If, following Daniels v Thompson, neither the client, nor her personal representatives, have an
effective claim against solicitors who have given negligent estate tax-planning advice, this would give
rise to a lacuna in the law, which could be filled by allowing the residuary beneficiaries to sue in
respect of the diminution in the value of their entitlements by reason of the liability to tax.
In Rind v Theodore Goddard [2008] PNLR 24 Morgan J had cause to consider whether such a lacuna
existed, and whether, in consequence, a residuary beneficiary had a real prospect of success in his
claim as residuary beneficiary. Mrs Rind transferred the legal title to a commercial property to a
Jersey company upon trust for her son, the claimant. There followed a series of transactions, the
effect of which was that Mrs Rind reserved a benefit for IHT purposes. The claimant sued the
defendant firm (who had advised in respect of the material transactions) in his capacity as a
residuary beneficiary of Mrs Rind’s estate. He claimed that the defendant firm owed a duty of care
to him, as one of the intended residuary beneficiaries, in particular in relation to estate tax planning;
that the defendants had structured the transaction in such a way as to give rise to a reservation of
benefit and potential IHT liability (which the claimant had settled after his mother’s death); and that
the reservation of benefit and consequent IHT liability could have been avoided. The defendant firm
applied for summary judgment and/or to strike out the claim, one ground being that no duty was
owed to the claimant as a residuary beneficiary of the estate.
Morgan J considered whether, in principle, a duty of care could be owed by solicitors to the
residuary beneficiaries of the client’s estate by way of an extension of White v Jones. He doubted
whether a first instance Judge would do anything other than loyally follow Daniels v Thompson. The
decision in that case gave rise to the possibility that there was a lacuna which needs to be filled by
extending a White v Jones duty to the residuary beneficiaries. If Daniels v Thompson was correctly
decided, Mrs Rind had suffered no loss; her estate could not inherit a more valuable claim that she
had; and the personal representatives had also suffered no recoverable loss. Therefore, unless a
remedy were given to the residuary beneficiaries, no person would be entitled to claim in respect of
the IHT liability. Morgan J concluded that he could not strike out or dismiss the claim summarily.
51
This does not, however, mean that the court would necessarily, on a full trial, or on appeal, conclude
that a duty of care is owed by solicitors to residuary beneficiaries where the solicitors are
responsible for a loss to the estate giving rise to a diminution in the value of the beneficiaries’
entitlement, such as an avoidable IHT liability. It may be that the personal representatives can claim
(see F.7.1 below).
If one of two equal residuary beneficiaries has paid all the IHT payable in respect of the estate, he
will only be entitled to recover the reduction in his own share of the residuary estate, which cannot
exceed one half of the IHT and interest paid (Rind v Theodore Goddard, para. 79).
F.7.1. No lacuna
Morgan J commented that if Daniels v Thompson were to be considered again by the Court of
Appeal, or reviewed by the House of Lords, he would not be able to predict what the outcome would
be. His chief doubt stemmed from the submission by Counsel for the Defendants that there was no
lacuna and, therefore, no reason for invoking White v Jones. Counsel had referred to a number of
authorities to the effect that personal representatives can claim damages, in both tort and contract,
in respect of a breach of duty during the claimant’s lifetime causing damage only arising following
the death of the client (see F.4 and F.5 above). Counsel submitted that, subject to any limitation
defence, Mrs Rind’s personal representatives could sue the solicitors in contract or tort for breach of
duty and the damages recoverable would be the amount by which the estate was diminished by
reason of the liability to pay IHT. The damages would be added to the residuary estate and would
find their way to the residuary beneficiaries. It was, therefore, argued that there was no lacuna.
Morgan J commented that the court in Daniels v Thompson did not discuss in any detail Mrs Daniel’s
possible cause of action in contract (which he seemed to regard as a more likely claim by personal
representatives than a tort claim) against the solicitor, and that he had had a fuller citation of
authority than did the Court of Appeal in Daniels v Thompson.
In conclusion, it is possible that, the Court of Appeal or the House of Lords, might in future hold that
no duty is owed to residuary beneficiaries on the basis that the personal representatives have or had
a contractual claim for the same damage. Even if that is the case, there is a further uncertainty.
What if the personal representatives had a contractual claim, which is statute barred, so that the
beneficiaries will not be compensated by means of such a claim?
However, it is submitted that the personal representatives have no claim, derived from a cause of
action vested in the deceased on his death, to recover IHT payable after the death of the deceased,
either in contract or in tort (see F.4 and F.5 above). Furthermore, it is questionable whether they
have a cause of action in their own right in respect of a duty owed to them as personal
representatives (see F.6 above). On that basis, it is strongly arguable that the beneficiaries have a
cause of action.
F.7.2. Foreseeability of loss to residuary beneficiaries
In Rind, Counsel for the defendant firm submitted that, in any event, the solicitors must have been
aware of the persons or class of persons (in each case ascertainable if not actually named) on whom
the client wished to confer a benefit. Morgan J stated that, even if the court were to conclude that
there was a lacuna, and that the solicitors owed a duty to any persons affected by ineffective estate
planning, the solicitors would have a strong argument for saying that a White v Jones duty of care
cannot be extended to such persons because this would be to impose upon the solicitors a duty to
an indeterminate class of potential beneficiaries. The potential for such an indiscriminate liability is
52
generally a reason for rejecting the existence of a duty of care (see Clarke v Bruce Lance [1988] 1 All
ER 364, see E.10 above).
Morgan J decided, however, that it was reasonably arguable, for the purposes of a summary
application, that Mrs Rind’s settled intention was to leave the bulk of her estate to her children and
grandchildren, and that the solicitors should be reasonably be expected to have contemplated the
claimant as a person who would be adversely affected by ineffective estate planning in relation to
Mrs Rind.
Therefore, even if solicitors owe a duty to beneficiaries of their client’s estate, in respect of negligent
estate tax planning advice, liability will only be imposed if the solicitors are aware that the client has
made a Will, or has a settled intention to make a Will, benefiting the claimant or a class of persons
including the claimant, and that negligent tax advice will affect such a person. The beneficiaries must
have been identified with reasonable certainty at the time of the transaction.
F.7.3
Other approaches
Morgan J’s judgment could, perhaps, be criticised on the basis that a beneficiary’s claim, in respect
of a failed IHT-saving scheme, should not be regarded as a White v Jones claim, or as an extension
thereof. The issue should not be whether there is a lacuna, i.e. whether there is any person, other
than the beneficiary, who can bring such a claim. The claim is not strictly a White v Jones claim as it
is not one where the solicitor has been instructed, but failed, to confer a testamentary benefit on a
third party.
The correct analysis may be that a claimant/beneficiary should be entitled to recover from a
negligent solicitor if the solicitor knew or ought to have known that the beneficiary was relying on
the solicitor to give effective IHT-planning advice; the provision of competent advice was of
fundamental importance to the beneficiary; and there is a sufficient identity of interest between the
client and the beneficiary (Dean v Allin & Watts [2001] EWCA Civ 758, at para. 69). On this basis, the
duty is an independent duty owed to the beneficiary, not a duty owed to the client which is
extended to the beneficiary, as in White v Jones. The foreseeability of damage and the relationship
of proximity to the beneficiary make it fair, just and reasonable that the law should impose a duty of
care to the beneficiary (Dean, paras. 40 and 49). Unlike in Clarke v Bruce Lance, there is no conflict
between the interests of the client and of the beneficiary. Unlike in White v Jones there is reliance
by the beneficiary on the solicitor’s advice, to the knowledge of the solicitor. In other words, the key
factor may be reliance by the beneficiary. That reliance will often arise in an IHT-planning case
because the beneficiary will be aware that advice is being given for his ultimate benefit, and may
even play a part in the instructions given to the solicitor.
Indeed, the claimant/beneficiary may even be a client, to whom contractual duties are owed, if the
solicitor is held to have advised not only X, in respect of a scheme to save IHT in X’s estate, but also
X’s wife or children (see Mathew v Maughold Life Assurance Co Ltd (1987) PNLR 309, where a duty
was held to be owed to the wife of a client who sought tax advice). In Hughes v Richards [2004]
EWCA Civ 266 (see E.6 above), there was a claim by both parents and their infant children against
accountants for alleged negligence in failing to establish a trust which was effective to benefit the
children. Jacob L.J. considered that it was at least arguable that the accountant was advising both
donors and donees; and that he was acting directly for the children (who could not act for
themselves being under age) and not just for the parents.
53
F.7.4. Limitation in case of lifetime gift
In a case, such as Daniels v Thompson, where the deceased has entered into a lifetime gift subject to
a reservation of benefit, it might be thought that the cause of action, accrued on the date of the gift
when the donor has suffered a measurable loss in having made a gift of an asset subject to a
reservation of benefit (Forster v Outred [1982] 1 WLR 86; Nouri v Marvi [2010] PNLR 7; Rind v
Theodore Goddard [2008] PNLR 24, para. 82).
The limitation period in respect of a cause of action in contract will, indeed, expire 6 years from the
date of breach. However, in respect of any claim by the beneficiaries of the estate in tort, the cause
of action accrues when the beneficiary first sustains damage. In Rind v Theodore Goddard Morgan J
accepted for the purposes of a strike out application (para. 83) that, if the Court were to follow
Daniels v Thompson and reach a conclusion that a duty of care was owed by the solicitors to the
claimant beneficiary, Daniels v Thompson would seem to produce the result that the claimant
suffered damage from the first time on the death of Mrs Rind (para. 83; see also Cotterell v Leeds
Day [2001] WTLR 435, at 441F-G where this conclusion was described as “arguable”). The rationale
was that no loss of IHT was suffered until death. The limitation period of 6 years (s. 2 of the
Limitation Act 1980) ran from the date of death. It is submitted that the limitation period in a claim
by beneficiaries in tort – at least in respect of a liability to IHT – would commence on death. The
same should be true in respect of a claim by the personal representatives (if such a claim can be
made).
If more than 6 years have expired since the date of death, 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 limitation period to run for 3 years from the date of knowledge
required for bringing an action for damages in respect of the relevant damage. In Daniels v
Thompson the Judge at first instance held that this date was about 9 years later than the date when
the gift was made. This was not challenged on appeal.
The House of Lords has given full consideration to the issue of the date when the relevant
knowledge is acquired for the purposes of s. 14A of the Limitation Act 1980 (Hayward v Fawcetts
[2006] UKHL 9). Time begins to run when the client knows enough to embark on preliminary
investigations into the possibility that defective advice has been given causing loss. The requisite
knowledge is knowledge of the facts constituting the essence of the complaint of negligence. This
may be before the date when the claimant knows that he has, or may have, a claim as a matter of
law.
Where the claim is that the solicitors have failed to advise that a deed of variation be executed, time
begins to run from the date when the 2-year period permitted for deeds of variation expires (Cancer
Research Campaign v Ernest Brown [1998] PNLR 592 where Harman J concluded that no reasonable
person could have obtained the relevant knowledge from facts observable or ascertainable by them
within the 3 years before the issue of the writ).
In any claim for negligence, not involving personal injuries, there is a long-stop period of 15 years
from the last of the dates 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). Section 14B(2) makes it clear that
s. 14B can bar a right of action in a case notwithstanding that the cause of action has not yet accrued
before the limitation period prescribed by the section. In Rind v Theodore Goddard Morgan J had
found that it was arguable that the cause of action accrued on death. The claim was brought within 6
years of death. Nonetheless, he found that s. 14B could produce the result that the claim was
statute barred before that time (para. 84). In the event, he found that the last act of negligence
54
occurred within 15 years of the commencement of proceedings (when advice was given that only
partially removed a reservation of benefit).
F.7.5. Conclusion on Daniels v Thompson
Daniels v Thompson does, at first glance, provide a formidable obstacle to a claim to recover IHT
payable by the estate as a consequence of defective advice in connection with a lifetime transaction.
The claim (based on the vesting of the deceased’s cause of action in her personal representatives)
was dismissed on the basis that the deceased had suffered no loss. Permission was not given to
amend to allow a claim by the personal representatives in their own right, in part because it was
considered that such a claim was without merit.
However, the possibility of a claim by the beneficiaries was left open; there was no full consideration
of a claim by the personal representatives in their own right, and any comments as to the merits of
such a claim were obiter; and there was no consideration given to a contractual claim.
Given the state of uncertainty as to the law, any claim in a Daniels v Thompson type of case is best
brought by all possible claimants in the alternative, i.e:
(a) By the personal representatives in respect of a contract claim devolving on them on the
client’s death, assuming that no more than 6 years has expired since the date of the gift.
(b) By the personal representatives in tort, by virtue of a direct duty owed to them in their own
right.
(c) By the beneficiaries in tort, by virtue of a duty owed to them in their own right.
G.
LIMITATION, CAUSATION AND LOSS
G.1.
Limitation in Will cases
In Bacon v Howard Kennedy [2001] WTLR 169 (see B.1 above) it was argued, on behalf of the
defendant solicitors, that the cause of action accrued when instructions had been given to the
defendant's solicitors to prepare the Will (it was never prepared). It was argued, on behalf of the
claimant, that the cause of action did not accrue until the date of death of the testator.
It was held that the damage did not accrue until death on the basis that at any time up until death
the testator could make a Will in favour of the claimant. The judge rejected an argument that, if
mental incapacity had intervened, the ability of the testator to make a Will would have ceased
before death. The testator was not mentally disabled, and he might have corrected the omission of
having no Will at any time over the nine years or so before his death. Arguably, the position would
be the same even if the testator did become mentally incapable. The Court of Protection has power
to make a Will on behalf of a patient.
It is submitted that the same conclusion would be reached even in a case where the negligence
consists of preparing a valid Will, albeit one which fails to confer the intended benefit on the
claimant. No loss is suffered by the intended beneficiary until the death of the testator: he could
have made a new Will in favour of the claimant during his lifetime. In addition, beneficiaries have no
interest under a Will during the testator’s lifetime, as a Will is “ambulatory” prior to death. The
beneficiaries can, therefore, suffer no loss until the death of the testator (see F.7.4 above). In Nouri
v Marvi [2010] PNLR 7 Norris J did not doubt the decision in Bacon v Howard Kennedy stating that, in
55
general terms, the disappointed beneficiary’s cause of action does not accrue until the testator’s
death with a defective Will. The loss of the spes or expectancy that would have arisen had a proper
Will been executed is not itself real damage, but only negligible damage, with the result that actual
damage only occurs on death.
Even if the damage occurs before death, and the primary limitation period of 6 years has expired,
the limitation period may be extended by s. 14A of the Limitation Act 1980 for 3 years from “the
date of knowledge” subject to a 15-year longstop (see F.7.4 above). In Bacon v Howard Kennedy the
Judge held that it would not have been possible to rely on s. 14A to extend the limitation period if,
contrary to his primary finding, the cause of action had accrued when instructions were given for the
making of a Will. The client had knowledge whether or not the Will had been made, “being
knowledge which he might reasonably have been expected to acquire from facts ascertainable by
him” (s. 14A(10) of the 1980 Act). It would have been reasonable for him to have inquired whether
the Will had been prepared.
There is a 15-year long stop to any claim in negligence (see F.7.4 above). Estoppel may provide a
answer to a limitation defence if the claimant has been encouraged to believe that a claim can be
brought outside the limitation period (Cotterell v Leeds Day & Co [2001] WTLR 435).
In Esterhuizen v Allied Dunbar [1998] 2 FLR 668, at 678 D-F, Longmore J did not rule out the
possibility that the limitation period relevant to the testator’s contract could be applied to a
beneficiary’s claim in tort.
G.2.
Causation and loss
G.2.1. Damages equal to lost benefit under Will
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 the last valid Will, and for any ex gratia payments made
to the claimants made by the beneficiaries of such a Will.
G.2.2. Discount for possibility that the testator would not have made, or would not have
revoked, the Will
In most cases there will be clear evidence that the solicitor was instructed to make a Will in favour of
the claimant. However, in Ryan v Public Trustee [2000] 1 NZLR 700 the solicitor had failed to make
proper inquiries of a doctor as to the testatrix’s testamentary capacity. Nonetheless, he declined to
act on the testatrix’s instructions believing that she was incapable. Damages were to be assessed for
the lost opportunity, rather than the certainty, that the testatrix would have made a Will in the
claimant’s favour (if a doctor had been involved in confirming her instructions).
56
In Hall v Meyrick [1957] 2 QB 455 the defendant failed to advise the claimant that her marriage
would revoke a Will by her intended husband in her favour. The marriage took place and the
husband died intestate. The claimant claimed that, owing to the absence of advice from the
defendant, she had had failed to take steps to obtain a new Will from her husband after his
marriage. Damages were assessed on a loss of a chance basis, subject to deductions for the
contingency that the husband would have been willing to have executed a new Will in her favour,
and that it would not have been revoked. This is in accord with general principles relating to the
assessment of damages on a loss of a chance basis (see Allied Maples v Simmons & Simmons [1995]
1 WLR 1602).
If the testator would have changed his mind, and revoked the Will benefiting the claimant, there will
be no loss caused by the solicitor’s negligence. This is why the testator must have a fixed, continuing
intention to benefit the claimant (see A.5 above). If such a fixed, continuing intention is established,
it would not normally be appropriate to make a deduction for the possibility that the testator would
not have made the Will in question even if there had been no negligence. 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 (see B.1 above) 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: damages should be measured by the loss as at death flowing
from the fact that there was not an effective Will, when there should have been. In Humblestone v
Martin Tolhurst Partnership [2004] PNLR 26 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.”
In conclusion, if the court finds that there was an intention to benefit the claimant, and there is no
positive evidence of any change of mind, it will not generally be appropriate to discount the
damages for the possibility that the testator would have changed his mind. However, in theory, if
there were more substantial evidence of a possible change of mind, damages could be assessed
subject to a discount for such a possibility (see G.2.4 below).
G.2.3. Discount for uncertainty of benefit under Will
In Trusted v Clifford Chance [2000] WTLR 1219 (see A.4 above), Jonathan Parker J found that the
solicitors were not liable to the claimants. However, he did consider how damages might be
assessed, if there were liability, given that 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.
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.
G.2.4. Discount for claims against estate
In Gartside v Sheffield, Young & Ellis [1983] NZLR 37, at 56, it was accepted that, in a given case, a
court may view the actual loss suffered through the negligence of a solicitor failing to prepare a Will
as being much less than the testamentary provision made for him. The possibility of other claims
57
being brought to the detriment of the disappointed beneficiary, had the Will been executed, must
be taken into account; any amount that the disappointed beneficiary may receive in a family
provision claim will be relevant. In the end a value must be placed upon the benefit that has been
lost. Although there will be undoubted difficulties in the assessment of any damages, the courts
should not shrink from allowing a claim because of them.
As to claims under The Inheritance (Provision for Family and Dependants) Act 1975 a disappointed
beneficiary’s claim could be reduced to take into account the possibility that the disappointed
beneficiary’s entitlement under the Will would have been reduced by a successful claim by a third
party under the 1975 Act.
In Horsfall v Haywards [2000] WTLR 29 (see B.7.3 above) it was alleged that the claimant’s damages
should be reduced, due to the fact that the testator’s wife had a claim for reasonable financial
provision under the 1975 Act, and also a claim to set aside a deed of gift of property to the deceased
allegedly procured by undue influence. This was rejected. There was insufficient evidence before the
court in relation to the 1975 Act claim. The wife was not a party to the proceedings. She gave no
evidence save for the general statement of her intention to make the 1975 Act claim. It was
impossible, in the absence of evidence of facts material to establishing and quantifying such a claim,
to conclude that a claim, if made, would have reduced in value the assets in the estate available to
satisfy the claimant’s interests under the Will. On the undue influence point the judge had correctly
concluded that there was no evidence of actual undue influence and no serious prospect of
establishing a claim of presumed undue influence or a breach of the fair dealing rule. The two
suggested claims were only possibilities. They were never in fact made. If made, there was no more
than a speculative chance of successfully recovering something for the wife. No reduction should be
made in the quantum of damages on account of the chance of such speculative claims.
In Bacon v Howard Kennedy [1999] PNLR 1 (see B.1 and G.2.2 above) 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.
However, in the Canadian case of Whittingham v Crease 88 DLR (3d) 353 the court assessed the
value of a claim by two of the testator’s children under the Testators Family Maintenance Act (2/3 of
the estate). On that basis, the claimant would have received 1/3 of the testator’s estate, if a valid
Will had been made. He was entitled to 1/3 of the estate on an intestacy. He was, therefore, entitled
to damages from the solicitor, who had negligently failed to prepare an effective Will, of the
difference between 1/5 and 1/3 of the estate.
It is not clear what the approach of the court would be if there is more than speculative evidence of
a claim by a third party against the estate. It might be that the court would stay the negligence claim
for a period pending such a claim. The two actions could then be heard together. Alternatively, it
might itself put a value on such a claim in assessing damages.
G.2.5. Discount for claimant’s claim against the estate
The disappointed beneficiary may have a claim under the 1975 Act, in respect of a prior Will or on an
intestacy, which, if successful, would reduce or extinguish any loss. Indeed, in Ryan v Public Trustee
[2000] 1 NZLR 700 the court determined the quantum of such a claim (under similar legislation in
New Zealand to The Inheritance (Provision for Family and Dependants) Act 1975 respectively) and
then reduced the damages claim by that amount.
It is not clear how an English court would proceed. It seems unlikely that the court would, in
negligence proceedings, determine the quantum of a 1975 Act claim if no such claim has been made
58
and/or the defendants to the 1975 Act proceedings are not joined as parties. However, it is possible
that a rough and ready assessment might be made and damages reduced accordingly. Indeed, such a
conclusion could be justified on the basis that there has been a failure to mitigate by bringing a 1975
Act claim, at least if that claim was a strong and obvious one. In any event, it may well be in the
interests of the defendant to offer an indemnity in respect of the costs of making a 1975 Act claim.
G.2.6. Claims for other losses
It is not always the case that the relevant loss is the loss of expected benefit under a Will. For
example, the loss may be:
(a) the costs of probate proceedings to set aside a Will which would not have been made but
for the solicitor’s negligence (see C.5 above);
(b) the amount paid to settle such an action (Hines v Willans [2002] WTLR 299; see B.13 above);
(c) the costs of bringing rectification proceedings to remedy a mistake in a Will for which the
solicitor is responsible (see B.7.3 above).
G.2.7. Causation issues
In many cases, the court has found that, even if the defendants had not been negligent, there is
insufficient evidence that the claimant’s loss would have been avoided, or that the testator would
have acted any differently. This is particularly relevant in a case where the allegation is that the
solicitor has failed to take the testator’s instructions on a relevant matter and/or failed to advise
accordingly. The court may find that, even if instructions had been taken and/or the client properly
advised, the client would not have acted any differently, or that there is insufficient evidence of an
intention to confer the alleged benefit on the claimant (Cancer Research Campaign v Ernest Brown
[1997] STC 1425 (B.9.3 above); Littlewood v Wilkinson Woodward [2009] PNLR 29 (B.3 above);
Gibbons v Nelson [1999] Ch 326 (A.5 above).
In Cancer Research Campaign v Ernest Brown, for instance, it was alleged that the solicitor failed to
advise the testatrix to enter into a deed of variation of her brother’s estate in favour of certain
charities. This claim was rejected on the basis that no such duty was owed. However, Harman J also
rejected the claim on causation grounds. He said that he had almost no idea what the testatrix’s
reaction would have been had she been told that there was the possibility of reducing her
entitlement in her brother’s estate by means of a deed of variation. She might well have wanted to
retain her entitlement to protect herself against future contingencies.
Sometimes the position is that the client has, whether initially or later, been correctly advised, but
then chosen not to make any provision for the claimants (Sutherland v Public Trustee [1980] 2 NZLR
536, at B.8.3 above) or not made appropriate inquiries to remedy the position (Gorham v BT [2000]
1 WLR 2129, at E.6 above). In Gorham Mr Gorham had not made further inquiries when given the
correct advice (that he would be better off as a member of BT’s pension scheme) because he
erroneously believed that he was already a member of that scheme, having been misled by BT’s
literature. The chain of causation was broken because his belief was not reasonable and sensible in
the circumstances: he should have taken advice from BT to clarify the matter rather than relying on
his own misreading of ambiguous literature. This was, arguably, a harsh result, given that Mr
Gorham would not have found himself in the position of having to check on his rights but for
negligent advice given, in the first instance, by the defendant, Standard Life. Indeed, Stuart-Smith L.J.
59
dissented on this point on the basis that Mr Gorham’s failure to make inquiries was not the sole
cause of the loss.
Even if the claimant has suffered loss which would not have been suffered but for the solicitor’s
negligence, it does not follow that such loss will be recoverable: the loss must be within the scope of
the solicitor’s duty from which the solicitor had assumed a responsibility to save the claimant from
harm (see Corbett v Bond Pearce [2001] PNLR 31, at C.5.5 above).
In Gibbons v Nelsons [2000] WTLR 453 Blackburne J concluded that, if there had been negligence in
respect of a Will made in 1986, the chain of causation would not have been broken by the testatrix
making some immaterial changes to the 1986 Will by a subsequent Will made in 1994. This was so
even though there was no negligence in 1994 in failing to spot the alleged defect in the 1986 Will.
G.3.
Contributory negligence
Contributory negligence does not play an obvious part in a White v Jones claim. If, for instance, the
court has found that there has been a failure to supervise execution, the court will have found that
the solicitor’s negligence has been the cause of the defect. The solicitor is the expert on the law, not
the testator. If there has been unreasonable delay by the solicitor in preparing the Will, the fault will
usually lie with the solicitor, not the testator. If the testator consented to such delay, there will be no
breach of duty of the care owed to the beneficiaries by reason of such delay (Trusted v Clifford
Chance [2000] 1 WTLR 1219).
There may be cases where the negligence has been contributed to by the testator having given
inadequate instructions (see, for instance, Earl v Wilhem [2001] WTLR 1275). However, The Law
Reform (Contributory Negligence) Act 1945, s. 1(1) only applies where a person suffers damage
“partly of his own fault”. The claimants, in a White v Jones case, will be disappointed beneficiaries of
the client’s Will. They will not have been at fault, even if the testator was at fault, with the result
that the 1945 Act cannot apply. It was accepted by Stuart-Smith L.J. in Gorham v BT [2000] 1 WLR
2129 (see E.7 above) that the 1945 Act could not apply (see also Earl v Wilhem [2001] WTLR 1275 on
the similar wording of the Canadian statute on contributory negligence).
However, in Gorham Stuart-Smith L.J. observed that the remedy in White v Jones, was a judge-made
remedy, fashioned to meet the justice of the case. If, therefore, the courts are to fashion a remedy
to meet the justice of the case, they must take care that it is not made so as to involve injustice to
the defendant. This, he suggested, could be done by reducing the amount recoverable by the
claimants to take account of the negligence of the deceased which was a cause, but not the sole
cause, of the loss. He proposed that the damages should be reduced by 50%.
G.4.
Mitigation
Where the claim is that, due to the solicitor’s negligence, the Will does not contain a gift to the
claimant in accordance with the testator’s instructions, the claimant may be required, by way of
mitigation, to take rectification proceedings to rectify the Will, pursuant to s. 20 of the
Administration of Justice Act 1982 (see B.7.3 to B.7.5 above).
Other instruments, including voluntary instruments, can, subject to the court’s discretion, be
rectified where, by mistake, they fail to reflect the true agreement between the parties. Rectification
may be appropriate in the case of an instrument of gift, or a settlement, which fails to benefit the
claimant (see E.3 above).
60
A voluntary transaction may be set aside if the court is satisfied that the disponor did not intend the
transaction to have the effect that it did, so long as the mistake is as to the effect of the transaction
itself and not merely as to its consequences or the advantages to be gained by entering into it
(Gibbon v Mitchell [1990] 1 WLR 1304); or even where there is a mistake which is sufficiently serious
to render it unjust for the donee to retain the property given by the donor (Ogden v Trustees of the
RHS Griffiths 2003 Settlement [2008] WTLR 685).
As to whether the claimant should be required to mitigate by bringing proceedings under The
Inheritance (Provision for Family and Dependants) Act 1975, see G.2.5 above.
H.
TRUSTS
H.1.
Claim by trustees
Trustees are generally the proper claimants to recover losses suffered by beneficiaries of the trust,
including damages arising out of a professional claim. Indeed, the beneficiaries do not need to be
joined as claimants or defendants to a claim. White v Jones has no application to trusts. If the trust
has suffered loss due to the negligence of professional advisers, the trustees can sue to recover that
loss on behalf of the beneficiaries. There is no lacuna.
In Chappel v Somers & Blake [2003] 3 All ER 1076 (see D.1.2 and D.2.2 above) Neuberger J
considered that an executor was entitled to sue on behalf of the beneficiaries of the estate. He gave
the example of a bare trustee who seeks advice from a solicitor as to whether to distribute trust
property, where the right advice is that the property should be distributed as soon as possible,
because the income would attract a much lower rate of tax in the hands of the beneficiary than in
the hands of the trustee. If the solicitor delayed giving this advice for 5 years, Neuberger J
considered that it would be the trustee, and not the beneficiary, who would be entitled to sue the
solicitor for the extra tax paid during that period. It would be the trustee who was the client of the
solicitor, and it would be the trustee who had to pay the extra tax. The fact that it would be the
beneficiary who, in practical terms, lost the tax which was paid, and it was the beneficiary who, but
for the negligence of the solicitors, would have legally owned the trust property during the period
when the loss incurred, would not alter the fact that the appropriate claimant would be the trustee.
Neuberger J even considered (although he said that it was unnecessary to decide the point) that the
trustee should have a claim even in a case where the last instalment of extra tax was payable by the
beneficiary after distribution. Chappel was approved in the Court of Appeal in Shell UK v Total UK Ltd
[2010] EWCA Civ 180.
In Malkins Nominees Ltd v Societe Financiere Mirelis SA [2004] EWHC 2631 (Ch) Laddie J considered
that a trustee, just as much as an executor, could sue in tort to recover damages on behalf of the
beneficiaries on the basis that the trustee neither holds the property nor realises its value for
himself. He allowed a trustee to sue in the tort of conversion. However, he clearly considered that a
trustee could sue, in respect of a cause of action in negligence, as he expressly considered that his
decision was an extension of Chappel v Somers & Blake (which involved a negligence claim by an
executor).
H.2.
Claim by beneficiaries in their own right
In Yudt v Leonard Ross & Craig (1998/99) ITELR 53 Ferris J held that a beneficiary of an existing trust
could sue a solicitor, who had given negligent advice to the trustees, for loss suffered by the
beneficiary. There was no contractual duty because the contract was between the defendants and
the trustees. It was argued on behalf of the defendant solicitor that no tortious duty of care arose. If
61
a duty arose, it would be akin to the duty owed by a solicitor to a disappointed beneficiary under a
Will, as established in White v Jones. A feature of such liability is that there will be no remedy if the
duty is denied. However, in Yudt, it was argued, there would be a remedy: the trustees could sue in
respect of the duty owed to them and recover any loss to the trust fund.
Ferris J held that the special conditions of a White v Jones liability did not need to be satisfied in a
case where the claimants are beneficiaries under a disposition by way of trust made before the
negligent acts were committed. Such beneficiaries have a proprietary interest in the trust property.
If solicitors instructed by the trustees carry out their work negligently, thereby causing loss to the
trust property or putting that property or the interests of the beneficiaries in peril, the loss resulting
from such negligence will ultimately fall upon the beneficiaries, even if it is the trustees who incur it
in the form of a diminution of the trust property held by them or in the need to expend money to
protect the trust. By accepting instructions to act for the trustees the solicitors are of necessity
assuming to act, to the extent of the matters which they are instructed to deal with, in the affairs of
the beneficiaries as well. In such circumstances the solicitors owe to the beneficiaries the same
duties of care in tort as they owe to their clients, the trustees, in both contract and tort.
Ferris J did, however, concede that the position might be different where the claimant is a person
who has never become a beneficiary, e.g. a mere object of a fiduciary power vested in the trustees
which the trustees wish to exercise in his favour but fail to exercise because of the negligence of
solicitors instructed by them to draft the requisite instrument. Such a claimant might only succeed if
the relationship was of the special nature recognized in White v Jones.
This decision in Yudt is founded on the proposition that the cause of action in negligence is a
proprietary interest of the beneficiaries, where the negligence has been committed at a time when
the beneficiaries have existing interests. As such, it is in apparent conflict with Bradstock Trustee
Services Ltd v Nabarro Nathanson [1995] 1 WLR 1405 in which Judge Paul Baker Q.C. held that a
cause of action in tort for negligent advice could not be regarded as part of the trust property, from
the moment that the solicitors were first consulted, though doubtless any damages which may be
recovered would be. This is no doubt wrong: a cause of action in negligence can be an asset of the
trust (Royal Brunei Airlines v Tan [1995] 2 AC 378, at 391F).
In any event, if it is correct that a beneficiary can sue a solicitor directly for negligent advice given to
the trust, this does give rise to the risk of double liability, since the trustee can also sue. Also it
departs from the general rule that beneficiaries should only be allowed to bring an action (a
derivative action) if there are special circumstances (see H.5 below).
It has been suggested that beneficiaries should only be entitled to recover directly in tort losses
which they themselves suffer beyond the loss which they suffer by reason of the diminution in the
value of the trust fund (see Lewin on Trusts, 18th Ed., para. 43-09). However, there is no indication in
Yudt of any such limitation. In any event, the problem of double liability may be solved if trustee is
joined as a party.
H.3.
Bare trusts
In the case of a bare trust for a single beneficiary, the beneficiary may compel the trustee to sue on
giving him a proper indemnity. If the trustee refuses to sue, the beneficiary can, however, sue in his
own name joining the trustee as a defendant (Harmer v Armstrong [1934] Ch 65). Indeed, in Shell UK
v Total UK [2010] EWCA Civ 180 the Court of Appeal determined that there was no objection to a
claim by an equitable owner in tort provided that the defendant could reasonably foresee that his
negligent actions will damage the trust property, and the bare legal owner is also joined as a party so
as to prevent double liability.
62
But where there are several beneficiaries, the trustee should not commence proceedings on behalf
of one of the beneficiaries without the consent of the other beneficiaries. If in doubt, the trustee
should apply to the court for directions.
H.4.
Other trusts
Where the trustees are not bare trustees, the beneficiaries could commence proceedings pursuant
to CPR 64 to obtain an order directing the trustees to sue. The court may direct the trustees to sue,
or allow the beneficiary to sue in the name of the trustee. Alternatively, the beneficiaries may in
“special circumstances” bring a derivative action (see H.5 below).
H.5.
Derivative action by beneficiaries
Alternatively, in “special circumstances”, the beneficiary may (without first making an application for
directions) be permitted to bring a derivative action, in which the beneficiary sues on behalf of the
trust, but in the name of the beneficiary. The general principle is that special circumstances embrace
a failure, excusable or inexcusable, by the trustees in the performance of the duty owed to the
trustees to the beneficiaries to protect the trust estate or to protect the interests of the
beneficiaries in the trust estate (Hayim v Citibank [1987] AC 730, at 748F-G). Therefore, where a
trustee commits a breach of trust or is involved in a conflict of interest and duty, or in other
exceptional circumstances, a beneficiary may be allowed to sue a third party in the place of the
trustee. But a beneficiary allowed to take proceedings cannot be in a better position than a trustee
carrying out his duties in a proper manner (Hayim v Citibank [1987] AC 730, at 747C).
There are a large number of cases in which the courts have considered whether “special
circumstances” existed. However, it is no longer necessary to cite these authorities, which are
merely applications of the general principle cited above in Hayim (Roberts v Gill [2009] 1 WLR 531,
para. 40). However, it is clear that a refusal by the trustees to sue will not in itself justify a derivative
claim by the beneficiaries (Re Field [1971] 1 WLR 555; Roberts v Gill, para. 42). Nor is it enough that
there is an asset that might be recovered by the trustees, but which, but for the action, will be lost.
The real issue is whether the trustees are acting unreasonably in refusing to sue on behalf of the
trust. A most material factor will be whether the court would order the trustees to sue in an
administration action: if so there is no need for the beneficiary to apply to court for permission to
sue, and then to commence the main action by separate proceedings (see Harmer v Armstrong
[1934] 1 Ch 65; Yeatman v Yeatman (1877) 7 Ch 210, at 215). The question of entitlement to sue
could be determined as a preliminary issue in the proceedings. However, in Re Field, the court had
declined to order the administrators of an estate to sue for the recovery of money paid to the
deceased’s widow (no doubt because of the speculative nature of the claim and the risk of costs).
Nonetheless, the deceased’s first wife subsequently obtained an order that she should be entitled to
sue in her own name. Goff L.J. held that there were special circumstances in that the only persons
interested in the estate were the first wife and the widow, and the widow had a personal interest in
the defeat of the action.
In Bradstock Trustee Services v Nabarro Nathanson [1995] 1 WLR 1405 trustees of a pension scheme
declined to continue to pursue a claim in negligence against the defendant solicitors, having received
advice that the costs of both sides might exceed the total assets of the scheme, and that they would
be exposed to personal risks as to costs. The trustees identified two beneficiaries who were entitled
to legal aid. The beneficiaries applied to be joined as claimants, substituting the trustees as
defendants. The application was dismissed primarily on the basis that the negligence claim was not
trust property, but also (obiter) on the grounds that the trustees had not acted unreasonably in
63
refusing to sue (which would have put the fund at risk). The proposed action of the two
beneficiaries, who were legally aided, was not on behalf of all the beneficiaries, but solely for
themselves.
However, the fact that the beneficiaries, who are applying to be joined as claimants, are publicly
funded is not in itself a ground for disallowing their claim. That fact might be a ground for refusing
permission if there are other beneficiaries who could (but do not) bring the claim and who are not
publicly funded. Subject to that, a publicly-funded claimant should be entitled to bring a derivative
claim (Roberts v Gill, para. 43).
CHARLES HOLBECH
9 Stone Buildings
Lincoln’s Inn
April 2010
64