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.

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Duty of care to 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:

  1. When one party instructs a solicitor to confer a benefit on another party – such as in the case of a person who is an intended beneficiary of a will. The client is the person whose will is being prepared, but the solicitor will also owe a duty to anyone that the client intends to receive something under their will upon their death;
  2. When a person who is not a client reasonably and foreseeably relies on statements made by the solicitor or on the actions of the solicitor – this could potentially extend to a buyer or seller (or other parties such as a lender) in a conveyancing transaction; and
  3. When a solicitor steps outside their role as a solicitor.

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Case study

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.

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The Court's decision

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.

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Contact Our Dispute Resolution Team

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.

Our team of Dispute Resolution specialists are here to help. Please contact our team of dispute resolution lawyers on:

0161 941 4000