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You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> McLeod & Ors v Crawford & Ors [2010] ScotCS CSOH_101 (23 July 2010)
URL: http://www.bailii.org/scot/cases/ScotCS/2010/2010CSOH101.html
Cite as: [2010] CSOH 101, 2010 GWD 29-609, 2010 SLT 1035, [2010] ScotCS CSOH_101, [2010] PNLR 33

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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:

ннннннннннннннннн________________

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 г10,000 in full and final settlement of the claim. In the alternative, they offered to pay the sum of г5,000 by way of provisional damages.

[10] On 12 February 2004, the defenders wrote to Mr McLeod informing him of the г10,000 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 г7,413.75. 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 г10,000 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 г9,000 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 out that if there was no remedy, it meant that a solicitor would have no liability in circumstances where he had been negligent.

[21] However, the most important consideration for Lord Goff was the first one that he identified:

"(1) in the forefront stands the extraordinary fact that, if such a duty is not recognised, the only persons who might have suffered 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 ... if the solicitor owes no duty of care 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." (259H - 260A)

[22] After a detailed survey of the law, which included an examination of comparative jurisprudence, Lord Goff decided that a solution was to be found in the law of tort, rather than in any other area of the law:

"In my opinion therefore your Lordships' House should in cases such as these extend to the intended beneficiary a remedy under the Hedley Byrne principle by holding that the assumption of responsibility by the solicitor towards his client should be held in law to extend to the intended beneficiary who (as the solicitor can reasonably perceive) may, as a result of the solicitor's negligence, be deprived of his intended legacy in circumstances in which neither the testator nor his estate will have a remedy against the solicitor." (268C-E)

It has been suggested by Chadwick LJ that the ratio of the case is to be found in that passage: Worby v Rosser [2000] PLNR 140, 149.

[23] The chief feature of Lord Goff's dictum may be said to be its circumscription. He framed the extension to the existing law in a very limited way. It applied only to intended beneficiaries. There is no suggestion that he had in mind any broader extension of the liability owed by solicitors to third parties.

[24] Lord Goff affirmed that approach in two later passages in his speech:

"Let me emphasise that I can see no injustice in imposing liability upon a negligent solicitor in a case such as the present where, in the absence of a remedy in this form, neither the testator's estate nor the disappointed beneficiary will have a claim for the loss caused by his negligence. This is the injustice which, in my opinion, the judges of this country should address by recognising that cases such as these call for an appropriate remedy, and that the common law is not so sterile as to be incapable of supplying that remedy when it is required." (269C-E)

"liability is not to an indeterminate class, but to the particular beneficiary or beneficiaries whom the client intended to benefit through the particular will" (269G - H).

[25] Lord Browne-Wilkinson agreed with Lord Goff and in doing so, laid emphasis on the need for a special relationship between the parties. In the case where a solicitor has instructions to draw a will, he assumes "responsibility for, the task of procuring the execution of a skilfully drawn will knowing that the beneficiary is wholly dependent upon his carefully carrying out his function" (275G - H). Lord Nolan agreed with the views of Lord Goff and Lord Browne-Wilkinson and also with the judgments in the Court of Appeal.


[26] Of the two members of their Lordships' House who dissented,
Lord Keith of Kinkel found the conceptual difficulties "to be too formidable to be resolved by any process of reasoning compatible with existing principles of law" (252A-B). He agreed with the speech of Lord Mustill, who believed that the proposed duty of care could not be restricted to solicitors and continued (291D -E):

"To hold that a duty exists, even prima facie, in such a situation would be to go far beyond anything so far contemplated by the law of negligence. I must emphasise that the purpose here is not to conjure up the spectre of "opening the floodgates". It is simply that I cannot discern a principled reasoning which could lead to the recognition of such an extensive new area of potential liability."

[27] Although as yet there is no authoritative decision on the point, White appears to have been accepted into Scots law: see Holmes v Bank of Scotland 2002 SLT 544, following Robertson v Watt & Co 2nd Div. 4 July 1995, unreported. Against that background, Mr Dunlop did not try to persuade me that Robertson v Fleming was binding upon me. However, he referred to two recent decisions which underline the principle that under Scots law, a solicitor does not normally owe a duty of care to third parties: Fraser v MacArthur Stewart [2009] PNLR 13; and Frank Houlgate Investment Company Limited v Biggart Baillie LLP [2010] PNLR 13.

The Existence of a Duty of Care
[28] In determining whether a duty of care exists in the present case, Mr Dunlop submitted that there were four factors that clearly distinguish White from the present case.

(a) Lacuna in the Law?

[29] The lacuna in the law identified in White was clear. If the solicitor did not owe a duty of care to the disappointed beneficiaries, no-one had a right to sue for negligence. As indicated above, Lord Goff regarded this lacuna as a "point of cardinal importance".

[30] That approach was followed in Worby v Rosser. There, the plaintiffs were beneficiaries under a 1983 will. The testator made a further will in 1989. After a lengthy court hearing, the 1989 will was declared invalid. The plaintiffs claimed against the solicitor who had drafted the 1989 will for the unrecovered costs which they had incurred in the court action. The basis of their claim was that he owed a duty to take reasonable care to ensure (a) that the testator had testamentary capacity to make the 1989 will; (b) that he knew and approved of its contents; and (c) that the will had not been obtained by the undue influence of one of the beneficiaries.

[31] The Court of Appeal held that no duty was owed. Delivering the principal judgment, Chadwick LJ stated that:

"In the present case there is no lacuna to be filled. If the solicitor's breach of duty under his retainer has given rise to the need for expensive probate proceedings resulting in unrecovered costs then prima facie those costs fall to be borne by the estate ... If the estate bears the costs thereby and suffers loss then if there is to be a remedy against the solicitor it should be the estate's remedy for the loss to the estate. There is no need to fashion an independent remedy for a beneficiary who has been engaged in the probate proceedings. His or her costs if properly incurred in obtaining probate of the true will can be provided for out of the estate. If there has been a breach of duty by the solicitor, the estate can recover from the solicitor the additional costs ... The practical difficulties which would be likely to arise if solicitors were held to owe duties directly to beneficiaries under earlier wills provide powerful support for the view that it would not be appropriate to provide a remedy in circumstances in which it is not needed." (p. 149)

[32] What is the lacuna in this case? Mr Hajducki contended that as these relatives would otherwise have no remedy, the law should supply them with one. In my view, however, there is no need to do so. I come to that conclusion for two reasons. First, this is not a case like White where there is no remedy. Instead an analogy can be drawn with Worby, because the claim by Mrs McLeod can proceed. Secondly, the amendment to the Damages (Scotland) Act 1976 now prevents the invidious choice faced by a person who is gravely ill. The legislature having provided a remedy, it is my opinion that the courts should be slow to find that a lacuna exists.

(b) Conflict of Interest
[33] In White the interests of the testator and the beneficiary coincided. He wished them to have the benefit of the intended legacies. They wished to receive them. There was no scope for a conflict of interest to arise.

[34] The position is otherwise if such a conflict could arise. In that situation, it is a major factor in determining whether a duty of care is owed. That is illustrated by D v East Berkshire Community Health NHS Trust & Others [2005] 2 AC 373. In that case, the House of Lords held that no duty of care was owed by a social work department to parents who had been wrongfully accused of sexually abusing their children.

[35] Lord Nicholls articulated the point as follows:

"Ultimately the factor which persuades me that, at common law, interference with family life does not justify according a suspected parent a higher level of protection than other suspected perpetrators is the factor conveniently labelled 'conflict of interest'. A doctor is obliged to act in the best interests of his patient. In these cases the child is his patient. The doctor is charged with the protection of the child not the protection of the parent. Best interests of the child and his parent normally march hand in hand but when considering whether something does not feel 'quite right' a doctor must be able to act single-mindedly in the interests of the child. He ought not to have at the back of his mind an awareness that if his doubts about intentional injury or sexual abuse prove unfounded. He may be exposed to claims by a distressed parent." (para. 85)

[36] He continued:

"The claimant sought to meet this 'conflict of interest' point by noting that the suggested duty owed to parents has the same content as the duty owed to the child: to exercise due skill and care in investigating the possibility of abuse. This response is not adequate. The time when the presence or absence of a conflict of interest matters is when the doctor is carrying out his investigation. At that time the doctor does not know whether there has been abuse by the parent but he knows that when he is considering this possibility the interests of parent and child are diametrically opposed. The interests of the child are that the doctor should report any suspicions he may have and that he should carry out further investigation in consultation with other childcare professionals. The interests of the parent do not favour either of these steps. This difference of interest in the outcome is an unsatisfactory basis for imposing a duty of care on a doctor in favour of a parent." (para. 88)

[37] Lord Rodger of Earlsferry put the point as follows:

"In considering whether it would be fair, just and reasonable to impose such a duty a court has to have regard however to all the circumstances and in particular to the doctor's admitted duty to the children. The duty to the children is simply to exercise reasonable care and skill in diagnosing and treating any condition from which they may be suffering. In carrying out that duty the doctors have regard only to the interests of the children. Suppose however that they were also under a duty to the parents not to cause them psychiatric harm by concluding that they might have abused their child then in deciding how to proceed the doctors would always have to take account of the risk that they might harm the parents in this way. There would be not one but two sets of interest to be considered acting on or persisting in a suspicion of abuse might well be reasonable when only the child's interests were engaged but unreasonable if the interests of the parents had also to be taken into account. Of its very nature therefore this kind of duty of care to the parents would cut across the duty of care to the children." (para. 110)

[38] The same point was considered in Jain v Trent Strategic Health Authority [2009] 1 AC 853. There the owners of a nursing home sued the local health authority that had obtained an order to cancel its registration. The decision was taken following a slipshod investigation. Accordingly, the authority had proceeded on the basis of inaccurate information. The claimants had been given no prior notice of the application, or of the grounds on which it was made. Consequently, it had no opportunity of contesting the enforced closure of the home. By the time that the decision had been appealed, the business was ruined.

[39] The claimants sought damages in tort to compensate them for the financial loss which they had suffered. The House of Lords held that no duty of care existed. Lord Scott of Foscote was critical of what had occurred. He indicated that there may have been a remedy under the Human Rights Act if it had been in force at the time. However, the decision hinged on whether or not there was a duty of care. Lord Scott put the conflict of interest point as follows:

"The reason is that the imposition of such a duty would or might inhibit the exercise of the statutory powers and be potentially adverse to the interests of the class of persons that powers were designed to benefit or protect thereby putting at risk the achievement of their statutory purpose." (para. 28)

[40] Mr Hajducki submitted that in the present case, no question of conflict arose. Properly informed, Mr McLeod would have made a decision to elect for provisional damages. That was precisely what the pursuers had also wished. In my view, it is incorrect to approach the matter on that basis. Whether in an individual case all the parties shared the same view and wished the same outcome is fortuitous.

[41] When the defenders advised Mr McLeod in early 2004, there may have been a number of gaps in their knowledge: (a) did he have a wife and children; (b) what were their respective financial positions; and (c) did they wish their father to accept a full and final settlement, or provisional damages?

[42] If the defenders did owe a duty of care to the pursuers, then they would have required to enquire about these matters. But at that stage, the potential for a conflict of interest could clearly arise. The members of the family might well have divergent views on whether or not an offer of provisional damages should be accepted. That might make it more difficult for the solicitor to give independent advice to Mr McLeod. It might also create unnecessary tensions among the family.

[43] I am of the opinion that these real practical difficulties militate against the imposition of a duty of care here.

(c) Assumption of Responsibility
[44] A key factor in imposing liability in White was the solicitors' assumption of responsibility. Mr Hajducki contended that the same considerations applied here. The defenders had assumed responsibility toward the immediate family of the deceased. That was because it was common for solicitors who dealt with asbestos cases to provide the client with advice and assistance in respect of both the original claim and any mesothelioma claim (should one arise). So any solicitor engaged in this area would have been fully aware of the potential for family claims. Even if it did not quite fit within the scope of White v Jones, Mr Hajducki submitted that to impose liability in this case would be an incremental increase that was fair, just and reasonable.

[45] Mr Dunlop argued that to impose liability in this case would be to stretch the concept of assumption of responsibility beyond breaking point. In this connection, he referred to Whitehead v Searle [2009] 1 WLR 549. The facts of the case were as follows. In 1986 the claimant's son was born suffering from spina bifida. The claimant left the mother of the boy not long after the birth. The mother instructed a claim for damages to be brought against the health authority. The claim was based on their alleged negligent failure to detect spina bifida. Before that case was heard, the mother committed suicide. She died intestate. The claimant was substituted in the first action and it was ultimately settled for the sum of г20,000. It was accepted that the claim for damages did not extend to any loss or expense incurred after her death. As the claimant stood in her shoes, he was likewise bound by that measure of loss.

[46] Accordingly a second action was raised against the mother's legal representatives. It was contended that the first action should have been brought to a successful conclusion before the date of her death. Had that been done, the costs of the boy's care would not have been curtailed at the date of her death. It was also argued that the first claim was settled at an undervalue. The trial judge found in favour of the claimant and awarded damages

[47] On appeal, it was argued that there are only four means by which a duty to exercise reasonable care in the provision of legal services may be imposed upon a solicitor (para. 30). The first and paradigm case is by the terms of a retainer between the solicitor and client. The second arises in the beneficiary cases. The third case is where there has been an assumption of responsibility. The fourth and final case is a residual category. Laws LJ discussing this classification stated (para. 31):

"It would in my opinion take a very striking case to found a duty of care in the fourth class, where there is no retainer, no intended beneficiary, and no assumption of responsibility."

[48] The claimant did not fall into any of the first two categories. He had never retained the solicitors and he was not a putative beneficiary. In relation to the assumption of responsibility Laws LJ stated that the solicitors "at no stage proffered themselves as shouldering any task, or undertaking any duty" for Mr Whitehead in his personal capacity (para. 36). So his claim fell squarely within the fourth potential category identified. Laws LJ described it as "a far stride, not a small step" to hold that the solicitors owed a duty to advise the claimant that he might possess a claim (para. 44).

[49] In my view there are close parallels between Whitehead v Searle and the present case. It is hard to see why the defenders should be deemed to have assumed to take responsibility for the interests of the pursuers when they advised Mr McLeod. He was the best judge of what was correct for him. If he had been presented with the choice offered by the insurers, he may have had a host of reasons for deciding to elect for a full and final settlement, rather than provisional damages.

[50] I believe that an extension of liability is not warranted, because the necessary proximity is not present. If, for example, Mr McLeod had died of natural causes then his acceptance of an offer of full and final settlement might have been financially beneficial to the pursuers. The position is very different in the 'disappointed beneficiary' cases where - without making any further enquiry - the solicitor knows the names of the beneficiaries and the effect any failure to comply with the testator's instructions will have upon them. As Lord Browne-Wilkinson stated "the solicitor who accepts instruction to draw a will knows that the future economic welfare of the intended beneficiary is dependent upon his careful execution of the task" (275F-G).

(d) Indeterminate Liability
[51] The question of unlimited claims was raised in White. Lord Goff was not persuaded that this "spectre" should dictate the result in a case, which involved "doing practical justice in a particular type of case" (269G). However, he pointed out that no indeterminate liability arose, because the duty was owed "to the particular beneficiary or beneficiaries whom the client intended to benefit through the particular will" (269G-H).

[52] Again, counsel were divided as to the application of this factor. Mr Hajducki was keen to confine his argument to the particular circumstances of this case, which he described as unique. He did not contend that solicitors owed a duty of care to the family of every client who consulted a solicitor. By contrast, Mr Dunlop maintained that to impose a duty of care, even one restricted to immediate relatives, could lead to "a tidal wave" of claims.

[53] I agree with the defenders' argument. In my view, there is no line which could sensibly be drawn if liability was imposed in this case. A solicitor in providing advice or other legal services would have to take into account whether and to what extent his conduct could have a pecuniary impact not only on the client, but on the client's family. That would result in a mushrooming of potential liability.

Decision
[54] For the reasons given above, I am of the view that the present case can be clearly distinguished from White. Each of the factors I have discussed points away from the imposition of the duty of care. It also seems to me that there are very significant practical problems in trying to delineate the scope of any duty of care. In those circumstances, I therefore hold that there was no duty of care owed by the defenders to the first pursuer as an individual, or to the second, third and fourth pursuers.

[55] I shall sustain the first plea-in-law for the defenders and dismiss the claim made on behalf of those pursuers. Accordingly the action will only proceed at the instance of Mrs McLeod as executor-nominate.


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