Legal advice need not be incorrect or negligent to be inadequate, appeal court rules

Judges in the Inner House of the Court of Session ruled that it was “open” to the Scottish Legal Complaints Commission (SLCC) to conclude that the solicitor Walter Sneddon had not provided an adequate service after he changed his advice to his clients.

Lady Smith, Lord Bracadale and Lord Philip heard that missives for the sale to the clients of the house in Falkirk were concluded on 16 December 2011.

The price was £370,000 and entry was to take place on 20 January 2012, but sometime during the first half of January 2012 the roof of the house suffered storm damage.

By letter dated 16 January 2012, the appellant wrote to the seller’s solicitors, and an agreement was reached whereby the buyers were to retain £1,000 from the purchase price until the roof repairs were completed, at which point the funds would be released.

But after the clients had taken entry, it became apparent that no repairs had been carried out to the roof.

On 1 February the appellant wrote to the seller’s solicitors to state that if the work was not completed by 5 February then his clients would instruct their own tradesmen to carry out the necessary repairs and use the retention of £1,000 to cover the costs, but the seller’s solicitors responded by saying that his client was looking into whether the work had in fact been carried out and that they did not consent to the retention of the monies.

The ensuing correspondence between the solicitors indicated that, whatever the true position, the appellant continued to believe that no roof repair had been carried out at the instance of the sellers at all and he continued to press them, through their solicitors, to do the repairs.

On 27 March, the appellant advised the clients that they could instruct their own contractors to carry out the roof repairs and use the retention monies to pay for those works and on 28 March, he wrote to the sellers’ solicitors stating that the roof repairs had not been carried out and that his clients were arranging for the work to be undertaken by their own tradesmen with the £1,000 retention to be applied towards the costs.

But by letter dated 2 April, the sellers’ solicitor advised that the roof repairs had been carried out, reiterated that they did not accept that the retention money could be applied to the cost of any repairs instructed by the purchasers and warned that, if the first appellant uplifted the £1,000 without their consent, they would report him to the Law Society of Scotland.

The following day, the first appellant retracted his earlier advice to his clients and told them they could not in fact use the retention money to pay for any roof repairs instructed by them.

The clients then complained to the respondents that the appellant changed his advice, having initially told them that they would be able to use the retention money to instruct their own repairs but a week later he told them that they could not do so.

The SLCC concluded that what mattered was the cause of that complaint and it was that the solicitor failed to ensure that the terms of the retention were adequate.

In that regard, they noted that the agreement about the retention was lacking in detail and did not provide for the client to uplift the retention monies and carry out the repairs themselves.

The respondents concluded that, in the circumstances, the clients had received an inadequate professional service and upheld the complaint.

They determined that the appellants should waive their fees in relation to dealing with the roof repair matter (£317.63 plus VAT), and pay compensation in the sum of £500.

But the appellant challenged the decision, arguing that the respondents “erred in law” by “failing to take into account relevant matters”, namely that the advice given by the first appellant on 27 March and 3 April was, on each occasion, “correct”.

It was submitted that the respondents acted “irrationally” in that they failed to explain how differently worded terms would have altered the advice or would have avoided a factual dispute about the adequacy of the roof repair.

He also argued that the respondents’ decision was “not supported by the facts” as there was no evidence that the advice given was inadequate and there was “good reason for the first appellant to change his advice”.

Refusing the appeal, the judges observed that the assessment of whether the service provided by a practitioner was inadequate was “pre-eminently a matter for the judgment of SLCC”, a majority of whose members are lay persons.

Delivering the opinion of the court, Lady Smith said: “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.

“Matters must be considered as much from the point of view of the lay client and lay public as from that of the legal practitioner and the legal profession. It is not a matter of asking whether a different determination committee, another complaints body or, indeed, this court, would have reached a different view.

“We do not accept that the central tenet of the appeal, namely that the advice given was correct on each occasion, was well founded. Whatever his understanding regarding the repair works being done or not done, the first appellant required to recognise that the retention agreement was limited in effect and did not include any provision whereby his clients would, at any time, be entitled to use the retention money to carry out the repairs themselves.”

She added: “In all these circumstances, it was not correct for the first appellant to state to his clients, on 27 March 2012, that they were entitled to go ahead and use the retention money to carry out the work themselves. Nor, indeed, is there any indication of him having explained to the clients the limitations to their rights under the retention agreement.

“It was clearly open to the SLCC to hold that the clients had not received an adequate professional service. There was no need for them to go further and…prescribe what ought to have been in the agreement or what the first appellant ought to have sought to have included in it, particularly in circumstances where the Law Society have already provided helpful guidance. We are not, accordingly, persuaded that any of the grounds of appeal for which leave was granted are established.”