Correct advice may not be enough, court rules on complaint appeal
Service provided by a legal practitioner may be inadequate without being negligent and without having caused loss; and a service comprising advice may be inadequate even though the advice provided was correct, the Court of Session has ruled in an important decision arising from a complaint by a solicitor's client.
Three judges refused an appeal by Armadale solicitor Walter Sneddon against a decision of the Scottish Legal Complaints Commission to uphold a complaint by a client arising out of a house purchase transaction, and direct that his firm should waive certain fees and pay compensation.
Mr Sneddon's clients were due to take entry to a house on 20 January 2012. A few days beforehand the clients noticed storm damage to the roof. Mr Sneddon reported this to the seller's solicitors on 16 January; in a further letter of 19 January he said he understood that repairs had been instructed and proposed a retention of £1,000 from the purchase price "until the roof repairs are satisfactorily completed". The sellers' solicitors agreed, adding: "As soon as the repairs have been carried out our clients wish immediate release of the retained funds."
Following entry the purchasers reported certain defects in the property including the roof. Mr Sneddon understood that no repairs had yet been carried out, and gave the sellers a deadline after which the purchasers would instruct repairs. The sellers replied that repairs had been instructed and further work would be at the purchasers' own expense. After further correspondence and a second deadline, Mr Sneddon advised his clilents that they could instruct their own contractors and use the retention money. The sellers stated that the work had been carried out and there would be a complaint against Mr Sneddon if he uplifted the £1,000 without their consent. Mr Sneddon then retracted his advice about using the retention money.
Lady Smith, who gave the decision of the court along with Lord Bracadale and Lord Philip, highlighted that Law Society of Scotland guidance about retention of funds stated that the conditions of retention should be set out in writing, with a time limit for implementation, and that the conditions for use of the retention money by the purchaser include the agreement of the seller's solicitor on sight of a vouched estimate.
She also affirmed that while the clients' initial complaint was that Mr Sneddon had changed his advice, the SLCC was entitled to analyse matters differently and conclude that the true cause of the complaint was that Mr Sneddon "failed, at the outset, to ensure that the terms of the retention were adequate". For example, it failed to identify the extent of the repairs to be carried out, who was to be responsible for instructing them, failed to provide a time limit and failed to state what was to happen if the parties disagreed about the standard of the work. Nor did it provide for the clients to carry out the repairs themselves using the retention money. Allowance had to be made for the fact that lay complainers might not understand the nature of the service failure.
Regarding the approach to be taken by the SLCC, she commented that once a complaint had been accepted as a services complaint, if the SLCC was unable to resolve it informally it had to determine it by what it considered to be "fair and reasonable in all the circumstances": this included their consideration of the service issue as well as what action should be taken if there was inadequate professional service.
Since professional codes, standards and guidance had to be taken into account, she continued, "It is clear that whilst negligence would be relevant, it is not a matter of establishing whether or not the practitioner was negligent; a lesser failing may justify the upholding of a complaint. To put it another way, a service may be inadequate without being negligent and without having caused loss. Further,... it is plainly within the statutory intent that a service consisting of the rendering of advice may be inadequate even though the advice provided was correct. Much will depend on the particular facts and circumstances."
There were no grounds for impugning the SLCC's assessment. In particular the court did not accept that the advice given on each occasion had been correct. There was nothing in the retention agreement that entitled the purchasers to use the retention money to carry out repairs themselves, and this could not be implied. Nor were there any provisions by which failure by the sellers could be judged. "It was clearly open to the SLCC to hold that the clients had not received an adequate professional service", she concluded.
Learning point
Responding to the decision, SLCC chief executive Neil Stevenson commented: “Complaints processes can often become overly legalistic, and we have seen some commentary recently from the courts perhaps applying those standards. When the SLCC was established it was to provide something different, a more efficient and effective way for practitioners and clients to resolve disputes.
“The professions have responded well to the SLCC’s role, and we’re delighted that a growing number of cases are resolved early in our process, through mutual agreement of the client and the legal practitioners – saving everyone cost and worry. We strongly believe this helps the public and professions by improving overall confidence in those who provide legal services.
“A key learning point for those providing legal services to consider is that they must always place themselves in the client’s shoes. Rules, guidance, and technical legal knowledge all have a critical role to play in the provision of legal services, but it is also important to step back from those and consider what the client may and may not understand, and how they may be feeling about their situation. A truly client centred approach helps the public and should be a competitive advantage for service providers.”