Inner House allows proof of solicitors' third party lease advice claim
A solicitors’ firm has successfully appealed against a decision dismissing its attempt to claim a contribution from a firm of surveyors after it settled a professional negligence claim by a client arising from the terms of a commercial lease.
By a majority (Lady Paton and Lord Brodie, Lady Clark of Calton dissenting) an Extra Division of the Inner House reversed a decision by Lord Woolman (click here for report) to dismiss a claim by the former practice of Semple Fraser against CBRE Ltd, surveyors, the third party in an action against Semple Fraser by STV Central Ltd, arising out of an error in the rent review clause of the lease relating to STV’s premises at Pacific Quay, Glasgow.
The clause, which provided for compounding upwards at each anniversary according to a stated formula, had the effect of increasing the sum payable in an exponential manner which, on annual RPI inflation of 3%, would have resulted in an annual rent of £100m by 2025. STV succeeded in renegotiating the clause with the landlords in return for payment of certain sums. Semple Fraser admitted liability in an action by STV to recover its losses.
The solicitors’ claim against CBRE was based on emails in which the solicitors advised STV that they were asking CBRE to look at the wording of the clause, and then asked CBRE to comment. CBRE subsequently said they were “happy in principle with the RPI wording”, though did not respond to a further request on what to recommend in relation to the wording of the increase.
Lady Paton accepted that it was necessary for the court to decide whether, if the third party had been sued by STV, it would have been held liable. Averments by the solicitors, including that it was implicit that professional advisers instructed on such a development would co-operate with and respond to queries from other advisers within the team, and that legal advisers charged with drafting rent review provisions would be expected to seek assistance from chartered surveyors who employed specialists in rent reviews, if also instructed, were relevant, when taken with the email exchanges, for proof of the contractual case.
Similar averments were relevant to allow a delictual case of assumption of responsibility to go to proof.
Lord Brodie commented that the defender's averments regarding the failure to revise the draft lease could be read "as allowing the conclusion that this was because the defender had failed to identify the defect in the draft and that the third party, despite having been invited to check the clause, had either failed to do so or, if it did check the clause, had also failed to identify the defect and to advise the defender accordingly. None of this may be established at proof but in my opinion, in what is a commercial action, the defender has averred enough to entitle it to be given the opportunity to try".
He agreed that, while not free from difficulty, the case on negligence should also go to proof.
Lady Clark of Calton, dissenting, considered that there were insufficient averments that it was part of the third party’s retainer (with STV) to check the proposed wording of the lease in areas within their competence if asked to do so by the defender, and in any event no averments to found a causal nexus between the request by the defender and the response, or lack of it, by the third party and the drafting and “signing off” of the defective rent review clause by the defender. The averments also failed to meet the assumption of responsibility test essential to the delictual case.