What Exactly is Fair and Just?
| Author | Frederic Reynold |
| Pages | 1-25 |
PART ONE
WHAT EXACTLY IS FAIR AND JUST?
(1) “THE IMPULSE TO DO PRACTICAL JUSTICE”
The development of the law of negligence in recent years has been dominated by attempts, some more successful than others, to confine liability to what practising lawyers and judges regard as acceptable limits; and that has particularly been the case where what was in issue was financial or “economic” loss. There was a recurring pattern: judges (usually the Law Lords) would produce what they thought was an effective formula to solve a particular problem, but one which by its very nature happened to store up further trouble for the future. Following a number of decisions in the House of Lords, the position had eventually been reached that a person would be liable for causing financial loss to another through his negligence if the loss was foreseeable; the relationship between the parties was one of “proximity”; and it was fair, just and reasonable to impose a duty of care upon that person for the benefit of the other. This was certainly a pragmatic and flexible position, but whatever the concept of what is “fair, just and reasonable” gained in flexibility, it certainly lacked in precision. (What had become clear, however, was that for the imposition of a duty of care to be judged as fair, just and reasonable, it was necessary that the claimant had relied upon the defendant and that the defendant had “assumed responsibility”.) Then along came a case
2 Disagreement and Dissent in Judicial Decision-making
The facts could be said to be typical of everyday life, but the legal problem which they posed has been referred to as “a legal philosopher’s dream.” After a family row following the death of his wife, a father cut his two married daughters out of his will. Some six months later they became reconciled, and he therefore instructed his solicitors to change his will so as to provide legacies for both daughters. Both daughters were aware of this development. The matter was entrusted to a legal executive in a firm who, despite reminders, delayed taking any steps to prepare a new will or revise the old one, with the result that that the father died before his instructions were implemented and the will executed. Both daughters sued the firm of solicitors for negligence. The judge at first instance rejected the claim on the basis that the solicitors did not owe the claimants any duty of care: the firm had entered into a contract with the father to provide professional services for the father alone, and for his benefit. The only duty they owed was to him as their professional client. The Court of Appeal reversed the decision, their reasoning being that the loss suffered by the claimants from the failure to prepare the new will was foreseeable; that although the duty owed by a solicitor to his client was paramount, the acceptance of instructions by the firm to make the changes to the will, or prepare a new one, created a special relationship with the intended beneficiaries; and that in those circumstances it would be fair, just and reasonable to impose on a solicitor a duty of care to the claimants as otherwise there would be no sanction on the solicitor for his failure to exercise professional care and skill in carrying out his instructions. As mentioned, they approved a decision of the High Court some 14 years previously in a case in which the claimant had likewise lost the expectation of a legacy as a result of a solicitor’s negligence, the judge holding that it would be unfair and unjust to deny her a remedy against the solicitor when his carelessness had deprived her of a share of the estate, and when she had no other remedy.
The stark fact which had impressed itself both on the High Court judge some 14 years previously, and on the Court of Appeal, was that if the position was that the solicitor did not owe a duty of care to persons other then the client, the party entitled to a remedy (i.e. the estate of the testator) would not in fact have suffered any loss, and the parties who suffered the loss (i.e. the claimants) would have no remedy. There were, however, strong arguments pointing in the other direction. Can it be a fair and just solution for a solicitor to owe a professional duty of care to persons other than to the client who is paying for his services and who gives him his instructions, simply because they have an expectation of benefitting from those services when they have been performed? Can it, for example, be fair and just for the solicitor to be exposed to such open-ended liability in the case of a proposed
Part One – What Exactly is Fair and Just? 3
gift when the intended beneficiary may not have even been aware of the testator’s intentions at the time? Furthermore, would not such liability, arising as it did where there was no mutual relationship of any kind between the parties, undermine, or circumvent the need for, the contract between the solicitor and the client? Unsurprisingly, the Law Society became concerned as to the possible implications of the decision on behalf of its members, and in due course the case arrived in the House of Lords. Over 11 months elapsed between the hearing and the handing down of the judgments, and in the event the panel divided three to two in favour of the beneficiaries and upholding the decision of the Court of Appeal.
Of the majority, the leading judgment was delivered by Lord Goff, who in his years as a practising barrister had been a distinguished commercial lawyer. He acknowledged frankly both the extent to which his conclusion was influenced by his view of the merits of the particular case, and the formidable nature of the difficulties (in the form of existing precedents) which confronted him in reaching that conclusion. Yes, the general rule was that a solicitor acting on behalf of a client owes a duty of care only to the client, and the scope of those duties will be determined by the terms of the contract of retainer between them. Yes, where the claim for negligence was in respect of financial loss, liability depends upon there having been an assumption of responsibility and the fact that the party suffering the loss had relied on the other party. Yes, unlike in cases of breach of contract, damages are not recoverable in tort
But at the heart of the matter for Lord Goff was:
the extraordinary fact that, if such a duty [of care] is not recognised, the only persons who might have a valid claim (i.e. the testator and his estate) have suffered no loss, and the only person who has suffered a loss (i.e. the disappointed beneficiary) has no claim ... It can therefore be said that if the solicitor owes no duty to the intended beneficiaries, there is a lacuna in the law which needs to be filled. This I regard as being a point of cardinal importance in the present case. (emphasis added)
4 Disagreement and Dissent in Judicial Decision-making
Lord Goff went on to point out that the “injustice of denying such a remedy is reinforced if one considers the importance of legacies in a society [such as ours]” and the fact that the negligent solicitor escapes any form of sanction. For Lord Goff the crucial question was whether “it is possible to give effect in law to the strong impulse for practical justice.”
Having looked at a number of possible solutions, many of which had been advanced by counsel in the course of lengthy and scholarly argument – including the concept of “transferred loss” borrowed from German law – and found them all wanting, Lord Goff alighted on a solution nearer home: in other words, within the framework of the existing law of negligence. His solution was that the solicitor’s assumption of responsibility towards his client should be deemed in law to extend to the intended beneficiary who, as could be foreseen by the solicitor, would be deprived of her legacy by the solicitor’s non-compliance with his instructions in circumstances in which neither the testator nor his estate would have a remedy. This solution commended itself to his colleague, Lord Browne-Wilkinson: in his view the relationship between the solicitor and the intended beneficiary was a special relationship – even though it lacked “mutuality” – by virtue of the solicitor accepting instructions to prepare or revise the will; and that his assumption of responsibility to the client should be extended accordingly. He viewed the merits of the claimants’ case in the same way as Lord Goff. Likewise, Lord Nolan concluded that the conceptual difficulties in establishing liability “should not stand in the way of the simple justice of the ... claim.” In Lord Nolan’s view the acceptance by the solicitor of the instructions to prepare the will necessarily involved the extension of his assumption of responsibility to those affected by his client’s instructions.
The perspective...
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