pnBlawg

the professional negligence blog

A collaboration between Rebmark Legal Solutions and 1 Chancery Lane

Schubert Murphy v The Law Society

In Schubert Murphy v The Law Society [2015] P.N.L.R. 15 (QBD), Mitting J refused to strike out a claim by solicitors who alleged that it had suffered loss during a conveyancing transaction as a result of relying upon misinformation on the Law Society’s "Find a Solicitor" website. Someone calling themselves John Dobbs submitted and obtained a practising certificate to operate as a sole practitioner under the trading name of Acorn Solicitors. A Mr Khristofi decided to buy a house and instructed Schubert Murphy. The vendor was represented by Acorn Solicitors. Schubert Murphy checked the Solicitors Regulation Authority (SRA) and noted Acorn Solicitors were regulated. The Law Society’s practice note on mortgage fraud (dated 15 April 2009) urged solicitors as a matter of good practice to check their directory "Find a Solicitor" or the directory of Licensed Conveyancers if they were dealing with a firm they were unfamiliar with. During the conveyancing Acorn Solicitors gave the standard undertaking to discharge the existing mortgage out of the purchase monies paid by Mr Khristofi. Mr Khristofi moved into the house to discover the £735,000 purchase price had not been used to discharge the mortgage; Acorn Solicitors were a sham and the undertaking worthless. Mr Khristofi faced eviction proceedings by Lloyds Bank who held a first charge over the property. Mr Khristofi brought proceedings against Schubert Murphy (for negligence) which was settled. Schubert Murphy then brought proceedings against the Law Society for breach of statutory duty and/or negligent misstatement. The Law Society sought to strike out the claim on the basis it did not owe Schubert Murphy a duty of care. Mitting J refused to strike out the claim and held the matter should go to trial. The existence or not of a duty of care vested in the SRA in respect of its duties under ss. 10(1) and 10A of the Solicitors Act 1971 depended on an analysis of general factors and specific factors. Having regard to issues concerning the protection of the public a strike out was not appropriate as in theory if the Law Society was correct it called into question the security of current conveyancing practice. Furthermore that could be a factor in recognising the existence of a duty of care which coincided with the Law Society’s statutory duties when considering applications for the entry onto the Roll of Solicitors and their registration. This was because the Law Society, by encouraging members of the public to rely on its published information about who is a solicitor could be shocked to discover they had no route for recompense against a representative and regulatory body that held out a person as a solicitor on its website when in fact they were not. It is not clear from the judgment whether the Law Society’s website for its "Find a Solicitor" contained an appropriately worded disclaimer in 2010 when the fraudulent transaction occurred. It does now and includes the wording "Find a Solicitor is not intended to be the way in which the Law Society fulfils its statutory duties under the Solicitors Act 1974 to keep an official register of all solicitors available for inspection by the public" and goes on to advise viewers to inspect the official register. The Law Society contended that a body in its position and exercising a statutory duty owed no duty of care to those who may be injured economically by carelessness (relying on Yuen Kun-Yeu v Attorney General of Hong Kong [1988] A.C. 175). Mitten J held reliance on the case noted above was of little assistance as it did not establish that in no circumstances could a regulator not be responsible for economic loss. Further it was a not case where the Law Society made a representation or failed to exercise due care in an assessment of honesty or competence of "John Dobs", but instead it just entered his name on the Roll and register him as entitled to practise when if they had exercised proper care they would not have done so. Mitten J also held that in negligence claims generally there was no requirement that the act of carelessness giving rise to the claim must coincide temporally with the occurrence of harm. Furthermore in a representation case it did not matter the alleged carelessness happened at a time when the person to whom the representation was made was not personally in the contemplation of the defendant. Mitten J was concerned about the possible impact on conveyancing practise as in cases where solicitors are involved negligence can be rectified by a payment from the Solicitors Compensation Fund. However counsel for the Law Society submitted only where a solicitor gives an undertaking that fails will compensation be paid as there is no remit or obligation to make payments for failed undertakings given by people posing as a solicitor. So how does a member of the public or a solicitor obtain independent verification of the information on the "Find a Solicitor" website? The official register could be inspected and the Law Society telephoned. However the SRA will not necessarily release information about a person’s route to entry on the Roll on the basis of data protection principles. Should such a body like the Law Society be allowed to comprehensively disclaim responsibility for information when it urges the public to check the information it publishes and urges solicitors, as a matter of good practice, to also check? J Mitting gave judgment on 17 December 2014-does anyone know what is happening with this case?                

NHS England: are GPs getting a fair hearing?

  GPs may not perform NHS services in England unless they are included in a national list (“the List”) held by NHS England. NHS England has powers to manage admission, suspension and removal from the List. If a GP’s name is not on the List he/she is prevented from practising. Evidently, therefore, NHS England’s list determinations have very serious ramifications for clinicians. However, the decision making process is treated as an internal proceeding and therefore operates in a similar fashion to disciplinary procedures in the employment context meaning, for example, that GPs are not entitled to be legally represented. Following Knowsley (R. (on the Application of S) v Knowsley NHS Primary Care Trust [2006] EWHC 26 (Admin)), the Courts have held that the procedural regulations governing list determinations (now the National Health Service (Performers Lists) (England) Regulations 2013, “the Regulations”) should be read in such a way as to comply with Article 6 ECHR.     NHS England List Decision Panels are ill-equipped to carry out the reinterpretation called for by the Courts. The Panels do not commonly include legally-trained members. Moreover, the Panels do not have the benefit of a legal assessor. There have been instances where, refusing to hear legal submissions from lawyers and in circumstances where the GMC has allowed a GP to continue to practise, the clinician has been prevented from working because a Panel has suspended him/her from the List. Faced with having to interpret the Regulations so that they comply with Article 6 ECHR, in the individual circumstances of the GP, it is not surprising if Panel determinations are procedurally unfair, in some instances. The question that arises is whether this is a problem of significance, warranting legal assistance to be provided to the Panels in all determinations. In light of the serious consequences to clinicians of list determinations, and the difficulty of determining procedural fairness, the issue should be given serious consideration.  

The Return of the Omni Ombudsman

Our regular readers will recall that we recently blogged about the Legal Ombudsman’s interest in providing redress for clients of non-legal professionals. This is not the only area where LeO's domain may expand. The Legal Services Consumer Panel reported last year that non-client third parties should have a right of redress from LeO. The Panel has since looked into the  2,184 complaints from non-clients that LeO turned away last year for want of jurisdiction. Earlier this week the Panel published 39 case studies to illustrate the sorts of complaints that might merit redress by LeO. The case studies include conveyancing horrors, aggressive debt recovery, unpleasant experiences at court and failures to administer estates properly. A number of the case studies concern situations in which the legal professional would or might owe a duty of care to the complainant. LeO's rules allow for a complaint to be dismissed or discontinued if it would be more suitable for the issue to be dealt with by a court, but the Panel thought that the costs of going to court meant that redress by LeO might be the only realistic prospect of getting justice for some complainants. As a change to the classes of complainant to LeO requires an order of the Lord Chancellor under the Legal Services Act 2007 it might be sometime before non-clients can obtain redess from LeO. In the meantime the case studies should provide a rich source of inspiration to those setting interview questions, tort examinations and moot problems.