Advice again….

News | Tue 11th Apr, 2017

Over the last fortnight, two cases caught my eye in the field of professional negligence:

First, a case that has finally clarified the scope of duty for advisors and second, one which confirms that free advice can still carry liability (albeit only tortious).

The Supreme Court in BPE SOLICITORS & ANOR v HUGHES-HOLLAND [2017] UKSC 21 has revisited the distinction between advice as to a certain course of action and the provision of information leading up to the client taking a decision. An advisor will be liable for the negligent provision of his or her advice per se but not for the consequences of a client’s overall decision to embark upon a particular course – unless the advice wholly covered this expressly.

Clearly the losses caused by the specific negligent advice will usually be significantly lower than the loss caused by deciding to undertake the entire process/transaction. The Claimant bore the burden of pleading and proving a specified loss.

Now the effect of SAAMCO has been limited, such as did not occur in some of the intervening decisions. Accordingly, in the index case it translated into the firm being liable for the financial consequences of the loan document being improperly drafted but not for the decision to take out the loan itself.

The other case of note is BASIA LEJONVARN v (1) PETER BURGESS (2) LYNN BURGESS [2017] EWCA Civ 254. Those who read my articles with interest will recall that I mentioned the judgment in this case at first instance last year.   Now the Court of Appeal has confirmed that no contractual grounds can arise out of the provision of free advice (here from an architect to her friends) but it can, however, lead to an action in negligence if an assumption of responsibility for specialist advice has occurred and been relied upon.

Overall then two decisions which Defendant practitioners will welcome this Easter. Now back to that written Advice I was putting off…