Elizabeth Mcleod And Others V. John Hamilton Crawford And Others (all Partners In The Former Firm Of Campbell Smith And As Individuals)
| Jurisdiction | Scotland |
| Judge | Lord Woolman |
| Neutral Citation | [2010] CSOH 101 |
| Court | Court of Session |
| Published date | 23 July 2010 |
| Year | 2010 |
| Date | 23 July 2010 |
| Docket Number | A58/09 |
| OUTER HOUSE, COURT OF SESSION [2010] CSOH 101 | |
| A58/09 | OPINION OF LORD WOOLMAN in the cause ELIZABETH McLEOD & OTHERS Pursuers; against JOHN HAMILTON CRAWFORD & OTHERS (ALL AS PARTNERS IN THE FORMER FIRM OF CAMPBELL SMITH W.S. AND AS INDIVIDUALS.) Defenders: ________________ |
Pursuer: Hajducki QC; Thompsons
Defender: Dunlop; Brodies LLP
23 July 2010
Introduction
[1] A man develops health problems as a result of exposure to asbestos during his working life. He consults a solicitor for advice. The solicitor enters into negotiations with the insurers of his former employers. An offer to settle the claim is made on the basis of either (a) full and final payment, or (b) provisional damages. The solicitor only relays the full and final offer to the client. No mention is made of the alternative proposal.
[2] The worker accepts the full and final offer. He subsequently dies of an asbestos related condition. The right to sue the employers has been extinguished because the claim against them has been discharged. Can the widow and children sue the solicitor for professional negligence? Those are the essential elements of the present case.
[3] The legal issue involves examining the duty of care owed by a solicitor to third parties. In particular, does a solicitor owe a duty to the family of a client to whom he provides advice in respect of a claim for personal injury? If so, what is the content of that duty of care? Those are questions of law: Mitchell v Glasgow City Council [2009] 1 AC 874, 883D per Lord Hope of Craighead.
Preliminary Matters
[4] There are three matters which are worth mentioning at the outset. First, the law in this area has recently changed. The Rights of Relatives to Damages (Mesothelioma) (Scotland) Act 2007 now allows relatives to claim damages where a discharge has been granted by the deceased. The Act achieved its purpose by amending section 1 of the Damages (Scotland) Act 1976. It specifies (a) the class of relatives which can make claims; and (b) the nature of the damages which can be claimed. The new provision came into force too late, however, to apply to the present case.
[5] Secondly, the defenders accept that the first pursuer is entitled to sue in her capacity as executor, as she stands in the shoes of the deceased (eadem personam cum de functo). What the defenders deny is that any duty of care is owed to Mrs McLeod or to her children as individuals.
[6] Thirdly, there is a factual dispute between the parties. It concerns what Mr McLeod would have done if he had been informed of the two offers and received advice of the consequences in accepting one or the other. It was accepted that this issue of causation could only be resolved after proof. The pursuers' position is that "it is likely that he would have accepted the offer for provisional damages and would not have settled the claim on a full and final basis." They rely on the following factors in support of that proposition: (i) he was not in urgent need of money at the time; (ii) he was concerned about the future welfare of his family; and (iii) he would have taken the advice of his wife, who would have counselled him to accept the offer of provisional damages.
[7] The defenders state that he would have accepted the full and final offer. Again they rely on various factors to buttress their position: (a) at the material time he was in good health; (b) the medical advice at that time suggested a very low risk of adverse future developments related to exposure to asbestos; and (c) the vast majority of those who sought damages for pleural plaques accepted full and final awards in preference to provisional damages.
The Facts
[8] The facts are not disputed. Between 1959 and 1972, the late Mr McLeod was exposed to asbestos during the course of his work at the Clydebank Shipyard. In 2002 he developed breathing problems. Investigations at Glasgow Royal Infirmary disclosed that he had pleural plaques and chronic obstructive airways disease. He was informed that they were asbestos related. He applied to Industrial Diseases Compensation Limited ('IDCL') for legal assistance to make a claim against his former employers.
[9] IDCL referred Mr McLeod to the defenders. In May 2003 he consulted with them and they carried out various investigations into his claim, which included taking witness statements. They also obtained a medical report, which stated that he had a substantially increased risk of developing mesothelioma. The defenders intimated a claim on his behalf. On 5 February 2004, the employers' insurers (Iron Trades Management Services Limited) sent a settlement proposal by fax to the defenders. They offered the sum of £10,000 in full and final settlement of the claim. In the alternative, they offered to pay the sum of £5,000 by way of provisional damages.
[10] On 12 February 2004, the defenders wrote to Mr McLeod informing him of the £10,000 offer. No mention was made of the alternative offer. On 16 February 2004, he telephoned them to discuss the proposal. He was told that if he accepted the offer, he would receive £7,413.75. That figure took into account various deductions that required to be made, including a fee payable to IDCL.
[11] Mr McLeod authorised the defenders to accept that offer and provided a signed mandate to that effect. The defenders indicated that they would try to obtain a higher offer if possible. On 5 April 2004, the insurers confirmed that £10,000 was the maximum amount they were prepared to offer. The defenders wrote to the insurers on 7 April 2004 confirming settlement at that sum and enclosing the signed mandate.
[12] In 2007 Mr McLeod developed mesothelioma. He was 69 years of age. During his illness, he required increasing levels of personal care and support from his wife and family. On 22 October 2007, he was admitted to the Marie Curie Hospice in Glasgow and he died there on 15 November 2007.
[13] A claim was intimated to the insurers on behalf of Mr McLeod, but it was rejected on the basis that any liability which had been owed to him had been discharged by the 2004 settlement. The new provision introduced by the 2007 Act only applies where both the discharge of liability and the death occurred on or after 20 December 2006. As Mr McLeod granted his discharge prior to that date, the pursuers are not covered by this provision.
The Claim
[14] The first pursuer in the present action is Mr McLeod's widow, who sues in her capacity as his executor nominate and as an individual. The other pursuers are Mr and Mrs McLeod's three children. The basis of the action is that the defenders were negligent by failing to advise Mr McLeod of the offer of provisional damages. It is said that they should have advised Mr McLeod of both proposals and of the consequences of accepting one or the other. By failing so to advise him, both he and the pursuers were denied the possibility of making a future claim in the event that he developed mesothelioma. That failure is said to have involved a departure from the standard of care to be expected of an ordinarily competent solicitor.
The Development of the Law
[15] In the nineteenth century, the law adopted a robust position. Solicitors did not in general owe a duty of care to third parties. That was enunciated clearly in Robertson v Fleming (1861) 4 Macq. 167, where for example Lord Wensleydale stated:
"It is said ... by the law of Scotland quite independently of the question of who the contracting parties are, whenever an attorney or agent is employed by any one to do an act which when done will be beneficial to a third person, and that act is negligently done an action for negligence may be maintained by the third person against the attorney or agent. I cannot think that any such proposition is made out to be part of the law of Scotland."
[16] However, Steyn LJ described the decision in that case as "obscure" and one which "was decided when the law of negligence was wholly undeveloped": White v Jones 1995 AC 207, 235F-G. He went on to state that its authority disappeared after the decision in Donoghue v Stevenson [1932] AC 562.
[17] The modern development of this branch of the law, at least in relation to England, can be traced to the decision of Sir Robert Megarry V.-C in Ross v Caunters [1980] Ch. 297. He held that a prospective beneficiary did have a claim against a solicitor whose negligence had deprived him of his legacy. In a subsequent Scottish decision, Lord Weir regarded himself as bound by the decision in Robertson v Fleming, although he regarded it "as out of sympathy with the modern law of negligence": Weir v J M Hodge 1990 SLT 266, 270A-B.
[18] The issue was revisited in White v Jones. In that case a firm of solicitors had failed to implement a testator's instruction. They had been asked to prepare a new will leaving legacies of £9,000 to each of his two daughters, but the deceased died before they had done so. By a narrow majority, the House of Lords upheld the decision of the Court of Appeal granting decree in favour of the daughters.
[19] Lord Goff delivered the leading judgment. He outlined three conceptual difficulties that appeared to bar a claim by a potential beneficiary against the solicitor who had been negligent in respect of a will (256B - 257F). First, a solicitor acting on behalf of a client only owes a duty of care to his client. Secondly, the claim for negligence by the third party is non-contractual and normally a claim for purely financial loss only lies in contract. Thirdly, it would be impossible to place any sensible bounds to cases in which recovery was allowed.
[20] In holding that there was a duty of care owed to the plaintiffs, Lord Goff referred to the "strong impulse for practical justice" (260G). He said that impulse arose out of a number of considerations, which included the importance of legacies to society and society's interest in ensuring that solicitors prepare effective wills (260A - H). He also pointed...
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