Professional Liability, Other Areas of Law
The fallout from fraud: what is a solicitor’s duty when advising a client about signing a document?

One Saturday morning in March 2003 Mrs Padden told her husband that she was going into Exeter to do some shopping. To her surprise, he told her that she would be unable to use her credit card because the account had been frozen. He explained that this was due to a dispute with his employer about a company car. It was not. Mr Padden was a crook. His assets had been frozen because he had used his employment as a financial adviser to steal around £2m of his clients’ money.

Faced with the prospect of Mr Padden’s prosecution and imprisonment, his solicitor invited Mrs Padden to sign documents agreeing to give up her interest in the family home. She was told that this was the only way that Mr Padden’s clients could be repaid their money and hence that Mr Padden could avoid prosecution.

Mrs Padden sought advice from Bevan Ashford. At the first meeting she was told not to proceed and that if she did there was still a big risk that her husband would be prosecuted. At a second meeting, with a different solicitor, she signed the documents. Mr Padden was subsequently prosecuted and convicted.

Mrs Padden then sued Bevan Ashford, claiming that the firm had negligently advised her as to the implications of signing the documents. The key dispute was as to what advice she was given at the second meeting. The documents themselves included a declaration that the obligations and implications of signing them had been explained to her. But Mrs Padden claimed she had not received any such advice at the second meeting. Unfortunately for the firm, the solicitor concerned could not recall the key meeting. Nonetheless, his evidence was that his usual practice would have been to advice a client in Mrs Padden’s position as to the consequences of signing such documents.

The trial judge essentially accepted Mrs Padden’s version of events and gave judgment for her, holding that the firm had been negligent in failing properly to evaluate and advise Mrs Padden as to the risk that Mr Padden would be prosecuted and convicted regardless of his wife giving up her interest in the family home.

The firm appealed. It concentrated its attack on the trial judge’s approach to the contention that Mrs Padden would have signed the documents regardless of any advice she might have been given; in other words, that she would have taken any chance, however slim, to avoid her husband going to jail. 

The Court of Appeal (in Heather Mary Padden v Bevan Ashford (A Firm) [2013] EWCA Civ 824) upheld the trial judge, holding that he was entitled to prefer the evidence of Mrs Padden and having done so, go on to conclude that she would not have signed the documents if properly advised. 

The case is perhaps a salutary reminder of the need to keep proper attendance notes – had the solicitor in question been able to point to documentary evidence of what he said at the key meeting, rather than relying on his “usual practice”, the result might have been very different indeed.


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