NEGLIGENCE – DAMAGES – LEGAL PROFESSION – PROFESSIONAL NEGLIGENCE
DAMAGES : DRAFTING : DUTY OF CARE : LEGAL ADVICE : PROFESSIONAL NEGLIGENCE : SOLICITORS : WILLS : LIABILITY FOR DRAFTING WILL : NEGLIGENT LEGAL ADVICE
Firms of solicitors and their partners had been negligent in failing to draft the will of a testator in accordance with his instructions relating to an express power of advancement of capital to his widow. They had also given negligent advice to her concerning the tax treatment of national savings certificates held by his estate and her entitlement to a widow’s pension.
The claimant widow (M) brought an action for damages against the defendant firms of solicitors and individual partners in the firms (D) for alleged professional negligence. D had been instructed by M’s husband (H) who was terminally ill, to draft his last will and the third and fourth defendant partners (W and C), who were also the executors of the will, had drafted it. H died two weeks after the will was executed. Under the will, there was to be a discretionary charitable trust lasting for 20 years following M’s death with gifts over to charities of H’s choice. The will contained an express power of advancement of capital in favour of M. The principal allegation of negligence was that the power of advancement was drafted negligently, as instead of providing that a maximum of £100,000 could be advanced by the trustees, it should have provided that everything except £100,000 could be advanced. M intimated a claim for rectification of the will against the executors and the charities entitled in remainder. The action was compromised before the intended proceedings were issued. The deed of compromise resulted in a partition of the fund, 66.5 per cent to M and 33.5 per cent to the charities. Following H’s death, M sought advice from W as to whether she was entitled to a widow’s pension but was told by W that she was not. She also sought advice about the tax treatment of national savings certificates held by H’s estate and was informed that the tax free interest would go to her, but that the index-linked element would be treated as an addition to capital. M submitted that had the power of advancement been drafted in the manner contended by her, she would have been able to secure a more favourable settlement of the intended rectification action. She also argued that D had given negligent advice following his death in relation to a widow’s pension and the treatment of national savings certificates.
HELD: (1) It was M’s understanding of H’s intentions regarding the power of advancement of capital which was to be regarded as correct and accurate. Although W was a good witness, the detail of C’s recollection of the instructions on the drafting of the will could not so confidently be relied upon. The overall conclusion on the evidence was that it was H’s intention to extend the limit of the advancement to everything but the last £100,000. The will had therefore not been drafted in accordance with H’s instructions. The duty of care owed to M to draft the will in accordance with H’s instructions had therefore been breached. That failure caused loss to M because the right acquired under the will was less valuable than the right she should have received had the will been properly drafted as H had intended. M suffered a loss as a result of the negligent act with effect from H’s death. D were liable to M even though she was not their client, White v Jones (1995) 2 AC 207 HL applied. M would be entitled to damages amounting to 6.5 per cent of the fund taking into account the pre-discount calculations made by the solicitors acting for the charities. M would also be entitled to the costs of the rectification proceedings in the sum of £40,000. (2) Ordinarily, an executor did not owe a duty to advise a beneficiary in connection with their affairs; that rule was subject to the principles of assumption of responsibility and reasonable reliance, Cancer Research Campaign v Ernest Brown & Co (1997) STC 1425 Ch D applied. W had assumed responsibility to advise M about her pension entitlement, and to take steps to find out whether her belief in the non-entitlement was correct. The circumstances of the relationship were such as to make it reasonable for her to have relied on W, so as to create the necessary duty of care. Even though that was done as a favour, it was in a professional context in which it was reasonable for the recipient of the information to assume that it would be done with due care. M relied on the advice she was given and was left thinking there was nothing further she needed to do. As she did not hear further from W, she did nothing and lost her claim to entitlement to widow’s pension. Accordingly, there was a breach of duty. M was entitled to benefits that would have been paid to her over a seven-year period, which was valued at £25,000. (3) The proper treatment of the national savings certificates was to treat the addition to their value, whether described as interest or index-linking, as income and not capital, Holder, Re (1953) Ch 468 Ch D considered. The executors owed M a duty of care to point out that the national savings treatment was not or might not be correct, and on the facts were in breach of that duty.
Judgment for claimant
 EWHC 1920 (Ch)
ALISON MARTIN v (1) TRIGGS TURNER BARTONS (A Firm) (2) TRIGGS WILKINSON MANN (A Firm) (3) JUDITH JOYCE WYNNE WEDDERSPOON (4) TIMOTHY JOHN MARSHALL CATON (2009)