Case summary: Conveyancing error
Mr Brown is a senior partner in the property team at Smith & Co. He meets with Sir Alexander Humphries, a long-standing client of the firm who is selling his ancestral home and surrounding land. Sir Humphries gives Mr Brown specific instructions about the land he wishes to sell, as he wishes to keep an area of ground on the estate for now. He has aspirations to sell it to developers later.
After the initial meeting Mr Brown passes the file to his assistant to carry out the work. Only when the conveyancing is completed does it come to light that the area of land Sir Humphries wanted to keep has in fact been included in the sale.
The claim notification
Dear Lockton
I wish to notify the insurers of a claim against our firm.
We acted for the seller of a small country estate.
One of the partners of the firm took instructions from the client. The client specified that he wished to retain a three acre paddock for future development.
The partner passed the file to an assistant who dealt with the missives and the conveyancing.
The assistant omitted to retain the paddock.
The client has been in touch, complaining that due to the firm’s error he has sold more than he had intended. He intends to raise a claim against the firm unless the conveyance can be undone.
Kind regards
Underlying cause of claim
The problem in this case seems to have arisen because of a failure to act upon the client’s specific instructions. It is easy to assume that the instructions to the assistant were clear and it was the assistant that made the omission.
However, the omission might have arisen due to Mr Brown’s failure to pass on the instructions to his assistant. Did Mr Brown record the instructions correctly? Did he take a detailed file note?
When it came to passing the work to his assistant, we don’t know whether Mr Brown simply told them to take responsibility for the file and read the notes on the case management system, or whether he had a detailed handover meeting with them. We also don’t know whether the assistant was given the correct level of supervision during the transaction, or whether they were simply left to get on with it.
Lessons to be learnt
This case study highlights how a small error can be costly. This can be particularly true of conveyancing transactions which, like this example, are often high value. In this case study, it is unlikely that the conveyancing can be rectified without the buyer’s consent, and if the client can show that the land had significant development value the potential claim could be extremely high. However, the mistakes that may have resulted in this claim could happen in any practice area. The lessons to be learnt from this example include the need for accurate and detailed file notes, proper procedures for delegation, and effective supervision.
How to prevent these issues
There are a number of practical steps that, had they been taken in this scenario, could have avoided the error (and the subsequent claim):
- Attendance at meetings. If work is to be delegated, make sure the fee earner who will handle the transaction is actually present at the meeting at which the client’s instructions are taken.
- Record keeping. Detailed file notes are key when there is a query as to whether instructions were followed. Take a colleague with you to take notes if possible if a meeting is likely to be lengthy or will involve taking a client’s specific instructions.
- Checklists. If a standard checklist was used throughout the transaction this would hopefully have included a reminder to check the boundaries of the land being conveyed with the client.
- Supervision. If the assistant did make the error in this case study, this may have been picked up by better supervision. Ideally, the supervising individual should have oversight of each step in a transaction, and certainly each time something is communicated to the client.
- A clearly marked-up plan. This would have provided clarity between the client, the partner, and the assistant, and served as a practical aide-memoire when drafting the missives.
- Sending the plan to the client. The plan should have been sent to the client for approval, with a detailed explanation. Drawing the client’s attention to the intended boundaries and any rights conferred provides an opportunity to flush out any misunderstanding. You should also ask the client to confirm in writing that they are happy with the plan. Evidence that the client has been asked to confirm that they are happy with the boundary and has done so may have helped to defend the claim in this scenario.
- Work place culture. Perhaps the assistant in this case study realised their error but was afraid to tell anyone. Every law firm should foster a culture where staff feel able to speak up and admit to an error. This can often allow a problem to be solved at an earlier stage, long before it becomes a claim.
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