A professional’s duty of care is widely considered to extend only to their client.
However, in a recent professional negligence case, the potential pool of people to whom a professional can owe a duty to has been widened.
The starting point is always the professional’s letter of engagement with their client.
However, the likelihood is that this will purposely limit the professional’s duty to their client only and not to any third parties.
Nevertheless, in this recent case, it was established that a solicitor might owe a duty of care to a third party who is not their client in certain cases.
Those circumstances are:
In this recent case, it was the third of these examples in which the court ruled conferred a duty of care by the solicitor to a person who was not their client.
The owner of a freehold property instructed a firm of solicitors to act for him in the sale of the property. The property was subject to a mortgage in favour of the Bank of Scotland.
An employee of the solicitors’ firm subsequently stole a proportion of the sale proceeds, and the property was not transferred at that point. Needless to say, the solicitors ceased to act for the seller from this point onwards.
However, the bank was unaware that the sale had not gone ahead and instructed solicitors to act for it.
A transfer was executed, and the bank’s solicitors applied to the Land Registry to register the transfer of the property and the bank’s charge.
When completing the necessary Land Registry forms to register the transfer, the bank’s solicitors incorrectly stated that the seller’s former solicitors (who were no longer acting) were still acting for the seller.
The transfer completed, and the seller lost the legal title to the property. This also meant the seller was still liable to the bank for the mortgage even though he was no longer the legal owner of the property.
The court decided that when the solicitors erroneously completed the forms in which they confirmed that the seller’s former solicitors were acting for the seller, they assumed a duty of care to all parties involved in the transaction to complete the form correctly. That included the seller.
That was because the confirmations in the transfer forms are intended to safeguard parties to property transactions from identity fraud.
In cases such as this, where solicitors act in multi-party transactions, they are likely to owe a duty of care to all parties involved in that transaction regarding statements made or their actions.
In this case, the bank’s solicitors stepped outside their role as only acting for the bank when they completed the Land Registry forms and by doing so, they also assumed a duty of care to the seller.
Suppose you believe one of the situations above may apply to you, and you have suffered financial loss due to a professional’s actions or statements.
In that case, you may have a claim against that professional even though you were not their client.
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