It is common practice for solicitors, upon spotting a mistake, to offer to rectify their error at the firm’s own expense. This is often a more cost-effective solution for the client than insisting they go to a new law firm for independent advice. The client is always free to choose another law firm to rectify the mistake and must be advised they can sue their current solicitor for professional negligence (if this is the case).
However, the recent case of Howell Jones LLP 11846-2018 has thrown doubt on the ability for law firms to act for a client who has suffered from a mistake caused by a solicitor in the practice.
Financial settlement gone wrong
The case involved a financial settlement in a divorce, Howell Jones LLP acted for the husband in the case (M). Howell Jones advised M on the settlement; however, after it was concluded, M complained that it was unfair. Opinion was sought from Counsel, who concluded the settlement was unfair and could be set aside in a further hearing.
Understanding it had a conflict of interest and having informed its insurers, Howell Jones apologised and admitted to M in a letter that it had made a mistake and M could either take independent advice or Howell Jones continue to act and seek to overturn the settlement at their own cost.
M accepted Howell Jones’s apology and the offer to continue to act. His legal fees to date (£6,238), were refunded. In addition to not charging anything for the attempt to set aside the settlement, Howell Jones indemnified M against any adverse costs should the attempt to set aside the settlement agreement fail.
Unfortunately, the application to set aside the agreement did not succeed. Adverse costs were set at £35,000, which had to be paid by Howell Jones. M complained to the Legal Ombudsman, and was awarded £50,000, also covered by the firm.
The SRA investigation
The SRA subsequently investigated Howell Jones and brought the firm before the SDT on the grounds it acted in circumstances where there was an own-interest conflict in breach of identified Principles and Outcomes.
The SDT concluded that Howell Jones erred in its decision to act for the client in having the financial settlement put aside. This is contrary to the earlier decision of Connolly v Law Society  EWHC 1175 (Admin) where The Right Honorable Sir Stanley Burnton J stated:
“I accept that generally the honest and genuine decision of a solicitor on a question of professional judgement does not give rise to a disciplinary offence. But that does not mean that for a solicitor to act where there is a significant risk of a conflict of interest cannot be a disciplinary offence. If a solicitor does not honestly and genuinely address the issue, he may be guilty of an offence. And if his decision is one that no reasonably competent solicitor could have made, it may be inferred that he did not (or could not) properly address the issue.”
By letting M know that a) he had the right to pursue a case in professional negligence against the firm, and b) he had the right to obtain independent advice, Howell Jones acted honestly and genuinely. And in seeking advice from Counsel on the conflict, it appears they properly addressed the conflict issue.
Implications for clients
The decision in Howell Jones LLP 11846-2018 has severe consequences for clients. Legal costs could significantly increase should a client, whose matter is complex, be forced to instruct a new law firm and possibly new Counsel. It would seem to be common sense that, even if a mistake has been made (and no one is infallible from such an occurrence), the solicitor who understands the background of the decision should be able to use their knowledge to rectify the error with minimum cost and distress to their employer and client.
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