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PROFESSIONAL NEGLIGENCE

WHITE v JONES LIABILIITY IN CONTEXT OF WILLS, TRUSTS AND TAX

A. WHITE V JONES

A.1. Nature of White v Jones liability

The purpose of this paper is to explore the nature and extent of a professional’s liability in

negligence pursuant to White v Jones [1995] 2 AC 207. In White v Jones the House of Lords

fashioned a new remedy for the benefit of the intended beneficiaries of a Will, who had been

deprived of legacies by reason of the negligence of a solicitor. Due to the solicitor’s unreasonable

delay, the Will was not prepared for execution before the testator’s death. Despite the absence of

any contractual relationship between the solicitor and the beneficiaries, the beneficiaries were

awarded a cause of action in tort to recover damages equal to the value of the legacies to which

they would have been entitled under the Will. The key point was that the testator and his estate

(who had a claim in contract) had suffered no loss, but that the disappointed beneficiaries (who had

suffered loss) otherwise had no claim. There was, therefore, a gap or “lacuna”, which the House of

Lords filled by providing, what they, no doubt, saw as a one-off remedy.

White v Jones limits liability to a case where a solicitor, or other professional, has been negligent in

failing to give effect to a client’s testamentary intentions. There is a retainer to prepare a Will. The

Will is not prepared or executed before the death of the client, or after death it emerges that the

Will is invalid or defective due to the negligence of the professional. In consequence, the intended or

disappointed beneficiaries suffer loss of the testamentary gift which the client had wanted them to

have.

However, White v Jones has been extended, by analogy, to negligence other than in connection with

the preparation of a Will, and to liability to others than the beneficiaries of a Will. The standard

elements are as follows:

(1) There is a contract between solicitor or other professional (P) and a client (C), the purpose of

which is to confer a benefit on a third party (X). The contract may involve the drafting of a

document such as a Will, a deed of gift, a trust deed; and/or it may involve the giving of

advice.

(2) There is no contract between P and X.

(3) The intention to confer the benefit may be entirely gratuitous (as in the case of a Will).

Alternatively, it may be pursuant to a contract whereby C has agreed to confer a benefit on

X, such as security for a loan, as a condition of receiving a benefit in return from X, such as

the advance of the loan (see E.8 below). In the latter case, there is a common purpose that X

should benefit from the transaction which P is instructed by C to implement.

(4) There is no conflict of interest between C and X. Often X will be a member of C’s family. If

there is such a conflict, then no liability arises.

(5) Often the benefit is to be conferred following C’s death, e.g. a legacy under a Will or a death-

in-service lump sum pension benefit (see E.7 below). However, liability may also arise where

there is an intention to confer a benefit on X during C’s lifetime in circumstances where, for

some reason, that benefit is not conferred and the position cannot be rectified. C may not

be able to remedy the situation by perfecting the gift (if, for instance, he has died); or the

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gift may have passed into the wrong hands and be irrecoverable; or a gift may have been

made into a trust which is ineffective to confer any benefit on X (see E.5 below). It is

essential, however, that neither C, nor his personal representatives, have a claim for

substantial damages (see (9) below).

(6) P voluntarily assumes responsibility for reward to C to implement C’s intention to benefit X.

P could have chosen not to have undertaken the task, but does so without any exclusion of

liability to X. It is reasonable (objectively) to treat that assumption of responsibility as also

extending to X.

(7) There is a high degree of proximity between P and X. P knows that the purpose of the

transaction is to benefit X, or a class of persons including X. X need not be named, but must

be ascertainable (see A.7 below). There is no indeterminate liability to an indeterminate

class.

(8) P can reasonably foresee that the X will suffer loss if P is negligent in implementing C’s

instructions. P knows that X is particularly vulnerable because, for instance, X is not party to

the instructions or is not independently advised and/or because X is a child and/or because X

has no other means of recovering any loss flowing from P’s negligence (see E.8 below). In

some cases, however, there will be conscious reliance by X on P’s exercise of skill and

competence and/or direct communication between X and C.

(9) Neither C, nor C’s personal representatives, has an effective remedy against P. The purpose

of the transaction will have been to benefit X. C will not, therefore, have suffered a

substantial loss by reason of P’s failure to benefit X. At best, C or his personal

representatives have a claim for nominal damages.

(10) X is the only person who has suffered loss, but does not have a cause of action unless the

court provides a remedy.

(11) The policy consideration that P, as a professional man, should be held liable to somebody for

his negligence, there being a public interest, for instance, in the efficient preparation of Wills

or similar documents. P should not be allowed to escape scot-free.

However, White v Jones cannot be used to impose a liability in any case on any person who has been

instructed, pursuant to a contract, to take a step, the effect of which is to benefit a third party. In

Wells v First National Commercial Bank [1998] PNLR 552 a company irrevocably instructed its bank

to make a payment of £275,000 to the claimant. The payment was not made. The claimant sued the

bank in negligence claiming that the bank owed it a duty of care to pay the claimant the sum of

£275,000. The claim was struck out. The Court of Appeal identified two key features of White v Jones

which rendered it exceptional: (1) the particular responsibility, or peculiar status, of a solicitor as a

professional man to draw up a Will in favour of a third party beneficiary; and (2) the absence of any

right of the testator to claim substantial damages if no benefit is conferred on the intended

beneficiary. The defendant bank was not a professional, exercising care and skill, in a matter such as

a Will. Furthermore, it seems that both the bank customer and the claimant had an effective remedy

in contract. There was a chain of agreements or contracts under which the claimant had an effective

claim. In any event, the circumstances were not exceptional. It was a commercial situation in which

the relationships between the parties were governed by contracts between themselves. There were

no dealings or communications between the claimant and the bank giving rise to any liability outside

contract.

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A.2. Summary

The House of Lords’ decision in White v Jones itself is analysed at A.3. The nature of the duty to the

beneficiaries is analysed at A.4: it is co-extensive with the contractual duty owed to the testator. The

requirement that the testator had a fixed, continuing intention, up to the date of death, to benefit

the claimants is examined at A.5. The duty is owed by any professional person who has undertaken

to prepare a Will (A.6) and can only be owed to ascertainable persons whom the testator wishes to

benefit (A.7).

In Part B instances of negligence are examined such as delay in preparing the Will (B.1). The case-law

is analysed for guidance as to reasonable periods of delay. Other instances of negligence are

explored: failure to chase up a client to execute the Will (B.2); inadequate advice as to execution

(B.3); failure to supervise execution (B.4); failure to check whether the Will was properly executed

(B.5); failure to secure an effective disposition of property, such as joint or trust property (B.6);

failure to include a provision in accordance with the testator’s instructions, including an examination

of the issue of whether it is necessary to mitigate by applying for rectification (B.7); failure to

ascertain the testator’s intentions (B.8); failure to give competent advice, including tax advice, in

connection with the Will (B.9); whether there is a duty to advise beneficiaries of their entitlement

(B.10); delay in obtaining a grant (B.11); failure to notify personal representatives (B.12); and breach

of duty not to act (B.13).

Part C examines the position where the professional’s negligence has given rise to a probate claim to

set aside the Will on the grounds of lack of testamentary capacity (C.1), want of knowledge and

approval (C.2), undue influence (C.3) or lack of testamentary intent (C.4). The allegation will be that

the professional ought, in the circumstances, to have declined to act. The relevant loss will be the

costs in the probate proceedings of the beneficiaries under the probated Will. As such, the action is

distinct from a classic White v Jones claim by disappointed beneficiaries of a defective or non-

existent Will for the amount of their entitlement under such a Will. The nature and extent of a

solicitor’s duty to inquire into testamentary capacity is examined, as are the circumstances in which

a solicitor should or should not refuse to act. Practical advice is given (C.1.7).

Consideration is given to the issue of whether the beneficiaries of the probated Will, or the personal

representatives, are entitled to claim the costs of the probate action (C.5). The interrelationship

between a claim for the costs of a probate action, and a claim by disappointed beneficiaries, is

considered (C.5.5). Issues of causation and loss are examined (C.5.7).

Part D deals with claims by personal representatives, and the problem of double liability. Cases of

liability to personal representatives are explored (D.1). The key characteristic of such a claim is that

the estate has suffered loss. In a classic White v Jones case the estate has suffered no loss. The

problem of double liability (to personal representatives and beneficiaries) is analysed by reference

to the decided cases (D.2). Practical advice is given as to who should be parties to a claim where the

estate has suffered loss.

Part E examines cases where White v Jones has been applied (or not as the case may be) to lifetime

transactions, or otherwise than in the context of the negligent preparation of a Will. The House of

Lords in White v Jones made a number of obiter comments to the effect that a solicitor could not be

liable for a defective lifetime gift since the client would be able to perfect the gift, or claim damages

from the solicitor, during his lifetime (E.1). This principle is examined in the case of imperfect gifts

(E.3) and misdirected gifts (E.4). A number of cases are explored where the courts have imposed

liability to third parties in respect of lifetime transactions, such as gifts to trusts which fail to confer

an intended benefit (E.5), defective pension advice (E.7), advice commissioned by one party

affecting another non-contracting party (E.8), failure to advise that notice of severance of a joint

tenancy should be served (E.9). Cases in which the courts have refused to apply a White v Jones

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liability are also examined, such as Clarke v Bruce Lance & Co (E.10) and Cancer Research Campaign

v Ernest Brown (E.11).

In Part F there is a full analysis of the potential liability of tax-advisers to beneficiaries or personal

representatives of estates which have incurred IHT liability in respect of defective IHT lifetime

planning. The estate will incur an IHT liability where X makes a gift to X’s children, but continues to

reserve a benefit for IHT purposes. This may give rise to a claim against professionals who have

failed to advise as to such a liability, or who have failed to avoid such a liability.The leading cases of

Daniels v Thompson and Rind v Theodore Goddard are considered in detail. The issue of limitation is

addressed (F.7.4) and practical advice given as to who should bring the claim (F.7.5).

Part G considers issues such as limitation in a classic White v Jones claim (G.1), and causation and

loss (G.2). Contributory negligence (G.3) and mitigation (G.4) are also explored.

Part H examines the issue of whether beneficiaries of a trust can or should sue a professional who

has given negligent advice in connection with the trust. A claim by a beneficiary is a claim by a non-

contracting party and is, to that extent, not unlike a White v Jones claim.

A.3. The decision in White v Jones

A solicitor or professional Will draftsman clearly owes a duty in contract and tort to his client to

exercise reasonable care and skill in relation to the proposed Will. But is there a duty owed to the

beneficiaries of the Will if, for instance, the Will is not executed prior to the death of the client due

to negligent delay on the part of the solicitor? Can a beneficiary, who would have received a legacy

under the proposed Will, recover damages from the solicitor for the loss of the legacy?

It was long thought that no duty was owed to a disappointed beneficiary on the basis that the

solicitor only owed a duty in contract, and that there was no privity of contract with the beneficiary.

However, in Ross v Caunters [1980] Ch 297 Megarry V-C held that a solicitor (who was responsible

for the defective execution of the Will) owed a duty of care in tort to the disappointed beneficiary

pursuant to the two-fold test in Anns v Merton [1978] AC 728: the beneficiary, who had suffered loss

by reason of the solicitor’s negligence, was a person within the direct contemplation of the solicitor

as being likely to be injured by a failure to carry out the testator’s instructions, and there were no

considerations to negative or limit the scope of the duty.

In White v Jones [1995] 2 AC 207 the House of Lords, by a majority, confirmed that the beneficiaries

of an intended Will may have a remedy in damages against a solicitor by whose negligence they have

suffered loss . The defendant solicitor had negligently delayed in implementing his client’s

instructions to amend the client’s Will, so as to include legacies in favour of his two daughters. The

client died before a new Will was executed. The daughters sued the solicitor for the amount of the

lost legacies. Their claim was upheld.

The rationale is set out in Lord Goff’s judgment. The assumption of responsibility by the solicitor

towards his client extended to the intended beneficiary who (as the solicitor could reasonably

foresee) might, 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.

The key point was the extraordinary fact that, if a duty of care to the disappointed beneficiary was

not recognised, the only persons who might have a valid claim (the testator and his estate) had

suffered no loss, and the only person who had suffered a loss (the disappointed beneficiary) had no

claim. If, therefore, the solicitor owed no duty to the intended beneficiary, there was a lacuna in the

law which needed to be filled. There was, therefore, an impulse to do practical justice by giving the

beneficiary a remedy. It would be unacceptable if, because of some technical rules of law, the wishes

and expectations of testators and beneficiaries generally could be defeated by the negligent actions

of solicitors without there being any redress.

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It did not matter that the beneficiaries had not relied upon the solicitor, as the foundation of liability

is an assumption of responsibility by the solicitor. As Lord Browne-Wilkinson said, what is important

is not that A knows that B is consciously relying on A, but that A knows that B’s economic well being

is dependent upon A’s careful conduct of B’s affairs (272A). Since the solicitor had assumed a

responsibility to do something, it was no objection that there is generally no liability in tort for a

pure omission unless the defendant is under a pre-existing duty.

A.4. Duty to beneficiaries dependent on duty to testator/exclusion clauses

The duty owed to the beneficiaries is not independent of the duty owed to the testator. White v

Jones departs in this respect from Ross v Caunters where there was held to be a direct, independent

duty of care owed to the disappointed beneficiary. As Chadwick L.J. said in Carr-Glynn v Frearsons

[1999] Ch 326, at 337E:

The duty owed by the solicitor to the specific legatee is not a duty to take care to ensure that

the specific legatee receives his legacy. It ... is a duty to take care to ensure that effect is

given to the testator's testamentary intentions.

In consequence: (a) the duty owed in tort by the solicitor to the intended beneficiary and the duty

owed in contract by the solicitor to his client are for all practical purposes one and the same; and (b)

the nature and extent of the duty is determined by any terms of the retainer which may exclude or

restrict the solicitor’s liability to the testator (White v Jones [1995] 2 AC 207, at 268G-H; Trusted v

Clifford Chance [2000] WTLR 1219, at 1256).

It follows that: (a) conduct on the part of the solicitor which amounts to a breach of his contractual

duty towards his client must also amount to a breach of his tortious duty towards the intended

beneficiary; and also that (b) unless the solicitor is in breach of his contractual duty towards his

client, he cannot be in breach of his tortious duty towards the intended beneficiary. Therefore, it has

been said that no tortious duty will arise in favour of the intended beneficiary unless and until the

testator has: (a) decided to confer on the intended beneficiary a particular testamentary benefit;

and (b) retained a solicitor for that purpose (Trusted v Clifford Chance [2000] WTLR 1219, at 1256-7).

The proper analysis is that the only duty owed by a solicitor is to the testator, but if (a) he was in

breach of that duty; and (b) a claimant did not receive a benefit under the testator’s Will which he or

she would have received if the defendant had not been in breach of that duty, then at least, on the

face of it, the claimant may have a claim for damages arising out of the defendant’s breach of duty

to the testator (per Neuberger J, X v Woolcombe Yonge [2001] WTLR 301, at 307).

In White v Jones [1995] 2 AC 207 Lord Goff considered that the assumption of responsibility by a

solicitor would be subject to the terms of the contract between the solicitor and the testator which

may exclude or restrict the solicitor’s liability to the testator (268G-H). If, therefore, the solicitor and

the testator have agreed that no action needs be taken to prepare the Will during a specific period,

e.g. because the solicitor will be away from work during that period, the solicitor cannot be liable to

the beneficiary if the solicitor dies within that period (Trusted v Clifford Chance [2000] WTLR 1219).

It is not so clear whether the same principle applies to a lifetime transaction, e.g. where a firm of

accountants have, pursuant to a contract with a company, undertaken a valuation of the shares of a

shareholder for the purposes of a buy-back of those shares by the company. In Kilick v

Pricewaterhouse [2001] PNLR 1 (see E.8 below) there was a clause in the contract between the

company and the accountants limiting liability. The shareholder sued the company alleging loss as a

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result of a negligent undervaluation. Neuberger J declined to hold, on a summary judgment

application, that the defendant firm of accountants could clearly not take advantage of the

contractual provision, limiting their liability in respect of a valuation of shares, so as to limit its

tortious liability to the shareholder.

It also follows that a solicitor will not be liable to a beneficiary for failing to prepare a Will where the

solicitor has declined to accept the retainer on the grounds of the testator’s lack of testamentary

capacity (see the Canadian case of Hall v Estate of Bruce Bennett [2003] WTLR 827).

A.5. Fixed, continuing intention

It may be that the instructions never became fixed and final. In Trusted v Clifford Chance [2000]

WTLR 1219 the testator never reached the position where he could give the solicitor definite and

comprehensive instructions as to the dispositions of his estate to be effected by his proposed Will

(1257G). There was, therefore, no liability.

Even if clear and final instructions are given, there may be an issue as to whether the testator’s

intention remained fixed up to the date of his death. Such an intention may, however, be inferred. In

Bacon v Kennedy [2001] WTLR 169 instructions for a Will were given an astonishing 9 years before

the deceased’s death; no Will was executed in the meantime. The deceased had repeated his

instructions, and it seems to have been assumed that his intention remained fixed until his death

(there being no evidence to the contrary).

This issue has been explored in Humblestone v Martin Tolhurst Partnership [2004] PNLR 26 in the

context of a claim that a solicitor was responsible for the defective execution of a Will. It was there

argued, on behalf of the solicitor, that the burden was on the claimant to prove that the testator’s

testamentary intention continued up to his death, and that it was to be inferred that he had changed

his mind subsequent to the defective execution of the Will. Mann J saw no reason in principle why,

in every case, it should be necessary for the claimant to establish such a continuing intention. Where

the testator did intend a disposition in favour of a beneficiary, it did not suffice to show that a

degree of equivocation had crept in. It had to be apparent that there was some actual change of

mind, rather than the creation of a generally open one. However, it was accepted that in a given

case, a change of testamentary intention, coupled with other factors, could break the chain of

causation.

A.6. By whom duty owed

The duty is owed by any professional person who has undertaken the preparation of a Will or has

advised in regard to a Will intending to benefit a third-party, or to any company offering itself out as

offering a similar Will-making service to a solicitor (Esterhuizen v Allied Dunbar [1998] 2 FLR 668). In

this paper, references to solicitors should, therefore, be taken to include Will draftsmen.

A.7. To whom duty owed

The duty is owed to the testator and by extension to the beneficiaries of the Will. In a normal case

where the claim is that the solicitor has delayed in producing a Will, or has been responsible for a

defective Will, there will be no difficulty in satisfying this test: the testator will have instructed the

solicitor of his wish to benefit identifiable beneficiaries.

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However, in Gibbons v Nelson [1999] Ch 326 the claim was the solicitor had negligently failed to

advise the testatrix that she could exercise a power of appointment by her Will over a half share in a

trust fund. The claimant claimed that the testatrix, if properly advised that she could do so, would

have exercised the power in favour of the claimant. The Judge held that it was not sufficient to give

rise to an assumption of responsibility by the solicitor to the claimant that the solicitor was: (1)

aware of the trust fund (2) aware of the claimant’s existence and (c) aware, if he thought about the

matter, that the testatrix might possibly wish to appoint some or all of her share in the trust fund to

the claimant.

It was necessary that the solicitor should know: (1) what the benefit is that the testator wishes to

confer and (2) who the person or persons or class of persons are (in each case ascertainable if not

actually named) on whom the testator wishes to confer the benefit. That test was not satisfied in

Gibbons as the testatrix had never given any consideration to benefiting the claimant. There was

simply no evidence as to her intentions with regard to the power of appointment. This does mean,

however, that the test may well be impossible to satisfy in any case where the claim is that the

testator did not benefit the claimant due to the solicitor negligently failing to advise that the testator

had power to do so. The decision in Gibbons is, therefore, questionable on this point.

As to whether a duty is owed to the personal representatives of the Will to the personal

representatives of a previous, valid Will, see D.1 below.

B. INSTANCES OF NEGLIGENCE

B.1. Delay in preparing Will

A solicitor, instructed to prepare a Will, is under a duty of reasonable care to present the Will for

execution within a reasonable time. If the testator dies or becomes incapable before the Will has

been so presented, and the delay is unreasonable in all the circumstances, the solicitor may be liable

in damages to an intended beneficiary who has suffered loss by reason of the delay. Time will start

to run from the date when the testator makes the solicitor aware that he wants to make a Will

(Smith v Claremont Haynes & Co, Times, 3 Sept, 1991, where the testator was suffering from

leukemia. The solicitor failed to attend on the testator to take formal instructions for 33 days by

which time the testator had become incapable. Such delay plainly amounted to negligence).

White v Jones was itself a case of delay in drafting the Will. In that case there was a delay of 59 days

between the giving of written instructions and the death of the 78 year-old testator. Such delay, not

surprisingly, was held to be unreasonable. However, there was no consideration as to what time

period would normally be regarded as reasonable.

In the New Zealand case of Gartside v Sheffield Young & Ellis [1983] NZLR 37 the testatrix was 89,

and had recently had a fall. She died 10 days after first informing the solicitor that she wished to

make a Will, 7 days after giving formal instructions. A claim to strike out the claim failed.

In X v Woolcombe Yonge [2001] Lloyds Rep PN 274 a delay of 6 days between request for

appointment and death was held not to be unreasonable in the case of a hospitalised 55 year old,

terminally ill, cancer sufferer with no imminent expectation of death. Neuberger J emphasised that

where the client is old or ill, the delay which may be acceptable will obviously be less than in the

absence of age or illness. Where, however, there is a real prospect (which may be less than a 50%

chance) of imminent death, it may be negligent not to draw up a Will or Codicil, if necessary by hand,

for immediate execution, as a holding operation. In any event, the solicitor had prepared a Will

which would have been ready for execution in 8 days. The solicitor took a view, which a reasonable

solicitor could perfectly well have taken, that this was not an unreasonable period of delay, given

that there was no reason to suspect that imminent death would occur.

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In Doidge v Bright Broad & Skinnard, The Lawyer 20 April 1993, there was a delay of 15 days

between the request for an appointment and the Will being engrossed. The testatrix died, before

the Will was executed, after 18 days. She was 92, but not obviously in bad health. The delay was

held not to have been unreasonable, given the state of the testatrix’s health. This may be regarded

as a generous decision to the solicitor, given the age of the testatrix.

In Carr-Glynn v Frearsons [1992] 2 WLR 1046 the 81-year old testatrix wished to leave her share in a

property, owned jointly with her nephew to her niece. The solicitor was in some doubt as to whether

the testatrix and her nephew were joint tenants or tenants in common beneficially. The solicitor

advised that the deeds should be checked, which the testatrix agreed to do. The Court of Appeal

held that this was negligent advice: the testatrix should have been advised to serve a notice of

severance in any event. There was nothing to be gained, and much to be lost, by delay. The moral of

the tale, particularly in the case of an elderly client, is not to delay any longer than necessary without

good reason. However, arguably, there was no compelling urgency in Carr-Glynn that could not have

awaited the outcome of the testatrix’s investigations.

It is dangerous for a solicitor to cancel an appointment with an elderly client, who is in hospital,

without making inquiries as to the state of the client’s health, so as to be satisfied that any

additional delay will not be to the detriment of the client (see Hooper v Fynmores [2001] WTLR 169).

In Hooper the solicitor cancelled an appointment, for the Will to be executed, due to his own

hospitalisation. However, if (as he should have done) he had made enquiries, he would have

discovered that the client was gravely ill, and he could have arranged for another solicitor to attend.

There was a delay of about 12 days between the request for an appointment and the death of the

client. This amounted to negligence in the case of an 83 year old client, who had been in hospital for

about 1 month when the appointment was requested.

In Bacon v Howard Kennedy [2001] WTLR 169 the testator gave instructions for a new Will in 1986

and again in 1987. He died in 1995. It is not clear why he did not follow the matter up between 1987

and 1995. He may have thought that a Will had been executed. In any event, it would not be safe for

a solicitor to conclude, from lack of any response from the client, that the client no longer wishes to

proceed. The solicitor should clarify the position with the client.

The solicitor will not be liable to a beneficiary in respect of any period of delay to which the client

consents (Trusted v Clifford Chance [2000] 1 WTLR 1219). However, the client should be given the

chance to instruct another solicitor if such delay is unacceptable. His consent should also be given in

writing.

There may be reasons for delay, e.g. the need to take tax advice. If so, the client should be advised

as to the possibility of making a holding Will, and there should be an agreed time-frame for the

production of the Will based on a full consideration of the tax position.

In conclusion, there is no standard period of reasonable delay. However, in the case of a client who

is not old or ill, a period of up to 14 days between initial contact and production of the Will for

execution might be thought to be reasonable. If, however, the client is either old or ill, 7 days might

be more appropriate. If there is a real risk of imminent death or incapacity, it may be negligent not

to prepare a Will immediately.

B.2. Failure to chase up client to execute Will

It is not clear to what extent there is a duty to chase up a client to execute a Will which has been

sent to the client for execution. In Atkins v Dunn & Baker [2004] WTLR 477 a draft Will was sent to

the client seeking his approval prior to preparing the engrossment. There was no response from the

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client, who died intestate 3 years later. The Court of Appeal held that “in the circumstances of this

case” the Recorder had been entitled to hold that the ball was in the client’s court and that the

failure to send a reminder did not constitute such a fall below the standard to be expected of a

competent solicitor as to amount to negligence. However, it was accepted that there will often be

situations where there is a duty to send a reminder to the client. However, the circumstances in

which such a duty would arise are not spelt out. It would no doubt be advisable to send a reminder

letter if nothing has been heard after, say, 7 days.

B.3. Inadequate advice as to execution

There is a clear duty to take proper care in advising the testator as to the procedure to be

followed for the valid execution of a Will, if the solicitor is not to be present at the execution (Gray

v Richards Butler [2000] WTLR 143, at 157D). Clear written instructions (it is suggested, in a

standard form) should be given to the testator as to mode of execution.

If there is a failure to advise clearly or at all as to proper execution, the breach of which invalidates

the Will, there may be a liability to a disappointed beneficiary (see Ross v Caunters [1979] 3 All ER

580 where there was a failure to advise that the witnessing of the Will by the spouse of the

beneficiary would invalidate the gift). If the solicitor does actually supervise execution, but fails to

ensure that the Will was validly executed, the solicitor will be liable to the disappointed

beneficiaries (Hill v Van Earp (1977) 71 AJLR 457).

In Corbett v Newey [1998] Ch 57 the testratrix signed, but did not date, her Will. She returned the

undated Will to her solicitors who knew that she intended that it should not to be dated and was

only to take effect once certain inter vivos gifts had been completed. The solicitors duly dated the

Will only after the lifetime gifts had been completed. The Will was set aside on the basis that the

testatrix did not have any animus testandi when she signed the Will because she did not intend it

to have immediate effect. The costs of the parties were payable out of the estate. An action was

commenced by the residuary beneficiaries of the Will claiming that the solicitors owed them a

duty of care to ensure that the Will was validly executed. The claim was compromised on terms

that the claimant beneficiaries received the full amount of their entitlement under the Will

undiminished by the costs of the probate action. The solicitor was liable to the disappointed

beneficiaries on classic White v Jones grounds: the testator had intended to benefit the

beneficiaries by her Will, but had not done so due to the negligence of the solicitors who had

failed to advise her that the Will was not validly executed. There was then a further claim by the

personal representatives of the last true valid to recover the costs of the probate action (see

C.5.5. below).

B.4. Failure to supervise execution

B.4.1. Is there a duty to supervise?

In Esterhuizen v Allied Dunbar Assurance [1998] 2 FLR 668 it was held that the solicitor has a duty to

supervise the execution of the Will personally. In that case the Will, in favour of two friends of the

testator, was invalid because it was not attested by two witnesses in accordance with the Wills Act

1837. The entire estate passed on intestacy to the testator’s adopted daughter. The testator had

been advised in writing that two witnesses were required. However, Longmore J determined that to

leave written instructions and do no more was not enough. There was a duty to take reasonable

steps to assist the testator in the execution of his Will, by inviting the testator to the Will-preparer’s

offices to execute the Will, or by visiting his home with another member of staff. A testator can

10

expect reasonable assistance in regard to the process of execution and attestation, even if no

express request for such assistance is made.

The decision in Esterhuizen may appear somewhat harsh, given that clear written instructions were

given to the testator as to the need for two witnesses; Longmore J commented that the testator

probably understood this advice; and the standard attestation clause makes it clear that two

witnesses are required. Alternatively, the requirement to supervise execution should be limited to a

case where the solicitor has reason to believe that the testator is incapable of arranging execution

for himself.

Esterhuizen is also inconsistent with Gray v Richards Butler [2000] WTLR 143. In Gray the Will was

invalid as the witnesses were not both present at the same time when the testatrix signed the

Will. The Will had been left with the client for execution. However, the solicitor had left with the

testatrix a standard set of instructions on execution, described by Lloyd J as “most

comprehensive”. The solicitor’s conduct was held not to have fallen short of that required of a

reasonably competent solicitor. Gray J also commented (158C) that the attestation provision in

the Will made clear the vital need for the witnesses to be present together when the testatrix

signed the Will (a point supported by Re Groffman, Groffman and Block v Groffman [1969] 2 All ER

108 at 109).

B.4.2. Testator’s competence to follow instructions

There is some difference in view between the first instance High Court Judges in Gray and

Esterhuizen as to the relevance of the testator’s apparent competence to understand instructions.

In Esterhuizen the testator was found to have lacked the intellectual equipment or frame of mind to

arrange execution for himself. Longmore J decided that the solicitor should personally have

supervised execution. However, he does not seem to have based this conclusion on the client’s lack

of capacity. He stated that it was not sufficient to leave written instructions even “in ordinary

circumstances” which must, presumably, include circumstances where the testator is clearly capable

of following instructions. He also rejected the suggestion that the extent of the duty might depend

on how competent or intelligent the testator was perceived to be (but somewhat confusingly

conceded that that “actual performance” of the duty might vary according to the solicitor’s

perception of his client).

In Gray, Lloyd J considered that the extent of the solicitor’s duties in any given situation may depend

on who the client is and the view that the solicitor has formed, or ought to have formed if acting

with reasonable competence, as to the ability of the client to understand and follow advice as to the

relevant procedures (157E-F). Although there was evidence from a friend, and also from the son, of

the testatrix that executing the Will without expert help would have been an “unclimbable

mountain” for the testatrix, Gray J found that she was not stupid and that she was capable of

following procedures, such as those involved in the valid execution of a Will, if they were properly

explained to her. In any event, in assessing a person’s capacity, the standard to be applied was the

knowledge gathered by a competent and careful private client solicitor, and not the insight of one

who had known the testatrix socially from time to time, still less that of a close family member. It

was, therefore, sufficient to give written instructions as to execution to the testatrix.

It is submitted that Lloyd J’s approach in Gray is to be preferred. It is generally accepted that the

extent of the duty to advise may depend upon the experience or intelligence of the client as it

appears to the solicitor (see Carradine Properties v Freeman (1985) 1 PN 41).

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B.4.3. Resolution of Gray and Esterhuizen

However, a possible resolution of Gray and Esterhuizen may be that, where the client is

reasonably perceived as being capable of following clear guidance as to execution, it is sufficient

to give such clear guidance in writing. If, on the other hand, there is any reason to believe that the

client is not so capable, the solicitor should supervise execution. Nonetheless, to be on the safe

side, a solicitor might reasonably consider that he should, in every case, supervise execution,

unless the client agrees in writing that this is not required.

B.5. Failure to check whether Will properly executed

If the solicitor has not supervised execution, he will be under a duty, if and when the Will is

returned to him, to examine it to see whether it appears to be properly executed (Gray v Richards

Butler [2000] WTLR 143, at 157D-E). In Gray the witnesses had not, in fact, witnessed the

testatrix’s signature at the same time in her presence. It was submitted that the solicitor should

have been put on notice that there was something wrong with the execution of the Will by a

number of circumstances, including the fact that one of the witnesses was a neighbour, and the

other witness a financial manager with the testator’s bank (Coutts), whose address was in another

part of London. However, the Judge regarded those circumstances as minor irregularities which

were not such as to put a reasonably competent solicitor upon enquiry that there was any real or

substantial possibility that the Will had not been validly executed. The solicitor was entitled to

obtain reassurance from the fact that an employee of Coutts was one of the attesting witnesses,

since it would be extremely unlikely that such a person would fail to insist on the correct

procedures being followed.

In Humblestone v Martin Tolhurst Partnership (a firm) [2004] EWHC 151 the Will was checked by a

secretary, who found it to be in order. In fact, the testator had not signed the Will. The Judge

considered that the normal fulfilment of a retainer would require the solicitor, when the

document was returned for safe keeping, to check that, on its face, and on the facts then known

to him, its execution was ostensibly valid. Furthermore, as the normal practice of the solicitor’s

firm was to check returned Wills, it had, in any case, assumed a duty of care to check competently.

Whether it is necessary to ask for the return of the Will for checking is not clear. However, it might

be a prudent step if the solicitor has not supervised execution.

B.6. Failure to secure effective disposition of property

B.6.1. Joint property

If the testator’s instructions are to include a gift of the testator’s share in joint property, in which the

testator has or may have a beneficial interest passing outside the Will by survivorship on the

testator’s death, the solicitor is under a duty to advise the testator to sever the joint tenancy, e.g. by

serving a notice of severance on the other joint tenant. The service of such a notice is part of the

Will-making process.

In Carr-Glynn v Frearsons [1999] Ch 326 the testatrix owned a property jointly with her nephew. She

instructed her solicitor to prepare a Will leaving her share to her niece. The testatrix (who was 81)

died before notice of severance was given. The Will was, therefore, ineffective to pass a half share in

the property to the niece. The solicitor was aware that the property was in joint names and might be

jointly owned beneficially, but advised that the deeds should be obtained so as to check whether

there was a beneficial joint tenancy or tenancy in common. The Court of Appeal found that this

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advice was negligent: the correct advice should have been to sever in any event given that the

testatrix was likely to die before her nephew. There was nothing to be gained by waiting, and a real

risk that her intentions might be defeated by delay. The Judge had found that if advice to sever

immediately had been given, the testatrix would have accepted that advice. The solicitor was held

liable to the niece.

This conclusion is, perhaps, somewhat harsh on the solicitor. The advice to check the deeds before

severance does not seem so unreasonable as to amount to negligence. Furthermore, the testatrix

offered to obtain the deeds herself, and then failed to do so. Should the solicitor have insisted that

the testatrix serve an immediate notice of severance, rather than taken up the testatrix’s offer? The

conclusion that the testatrix would have accepted advice to sever in any event is also questionable.

She had an understandable reluctance to serve a notice of severance on her nephew, and did not, in

fact, serve a notice in the following 4 years before her death.

In Kecskemeti v Rubens Rabin & Company, The Times, 31 Dec 1992, the defendant solicitor was held

to have acted in breach of duty in failing to ascertain that the interest of the testator in two

properties which he wished to dispose of by Will was that of a beneficial joint tenant, and to advise

him that, if the gift was to be effective, he would have to sever the joint tenancies. The testator

failed to sever the joint tenancies with the result that the testator’s interest passed by survivorship.

The claimant was someone who would have benefitted under the testator’s Will if the joint

tenancies had been severed.

Both the solicitor and the testator wrongly believed that the properties were subject to tenancies in

common. However, it was no defence that the solicitor was acting on his client’s instructions. The

Court held that it would have been obvious to the solicitor from a look at the Land Registry

documents that this was a beneficial joint tenancy. This indicates that there may be a duty to

investigate the true position as to beneficial ownership, rather than simply accepting the testator’s

instructions. However, whether it is sufficient that the correct information is readily available, or

whether there must be something to put the solicitor on notice that the testator is mistaken, is a

moot point (but see Earl v Wilhelm, at B.6.2 below).

B.6.2. Trust property

In the Canadian case of Earl v Wilhelm (2000) 183 DLR (4th) 45 the testator instructed his solicitor to

prepare a Will including specific bequests of areas of farmland to various persons. The Will was

validly executed. However, the specific bequests of land were ineffective, as the testator had no

beneficial interest therein: he held the land on trust for a farming company controlled by himself (as

the solicitor knew). The solicitor was liable to the beneficiaries for loss consequent upon their

failure to receive the specific bequests of land. The Court held that, if the testator had been advised

that the beneficial ownership of the land was vested in his farming company, he would have made

arrangements to ensure that effect was given to his wishes.

Notably, it was not a defence that the lawyer was acting on the testator’s instructions in including

the specific bequests of the farmland in the Will. The Court commented that it was not a sufficient

discharge of a solicitor’s duty to a testator in circumstances such as these to simply enquire of him

what he wishes and then to record and thereafter prepare the Will without anything further. That

would be to relegate a solicitor and his obligations to that of a “parts counterman or order-taker”.

The public is entitled to expect more from the legal profession.

Certainly, if the solicitor knows that the testator does not have beneficial ownership of an asset of

which the testator wishes to dispose, he must so advise; similarly if the testator only has a limited

13

interest (such as a life interest). There is probably also a duty to advise that suitable enquiries be

made to ascertain the true position, if the solicitor has notice of any facts which might indicate that

the testator is not competent to dispose of the asset.

B.7. Failure to include provision in accordance with testator’s instructions

B.7.1. Duty and breach

If a testator instructs a solicitor that he wishes to make a testamentary gift of his interest in an asset

to X, and the Will fails to carry out the testator’s intention in that regard, the solicitor may be liable

in damages to X.

B.7.2. Convincing evidence

However, the burden is on the disappointed beneficiary to prove, by “convincing evidence” (Walker

v Medlicott & Son [1999] 1 WLR 727, at 731H, 738A) that the testator instructed the solicitor to

confer the relevant benefit on the beneficiary, and that the solicitor negligently failed to carry out

those instructions.

This may provide real difficulty as the decision in Walker v Medlicott & Son illustrates. In Walker

there was ample evidence that the testatrix had informed the claimant and 9 other persons, that she

had left her house to the claimant. She had even made a note, prior to visiting the solicitor, as a

reminder to leave her house to the claimant. However, the testatrix’s Will did not include a specific

devise of the house to the claimant, only a less favourable gift of a 1/6 share of her residuary estate

including the house. The issue was whether the claimant had proven, by convincing evidence, that

instructions to include a gift of the house to the claimant had been given to the solicitor. The

difficulty was that the testatrix was dead; the claimant was not present when instructions were

given; and the solicitor had no specific recollection of the meeting at which instructions were given.

The solicitor was found to be honest, had made a detailed attendance note which corresponded

with the contents of the Will, and had given reliable evidence as to his usual practice in preparing a

Will. Based on that practice and the documentary evidence, the solicitor was convinced that the

testatrix must have changed her mind and decided not to give her house to the claimant. The Judge

was entitled to attach weight to the solicitor’s evidence. It was also possible that there had been a

genuine misunderstanding between the testatrix and the solicitor. Therefore, the allegation of

negligence was not proved.

However, if there is a misunderstanding, the solicitor may be liable if the Court finds that there has

been a negligent failure to clarify the instructions which have been given (Gray v Buss Merton [1999]

PNLR 882).

In Martin v Triggs Turner Bartons [2010] PNLR 3 the claimant succeeded in overcoming the evidential

hurdle of proving convincingly that a power of advancement contained in her husband’s Will trust

had not been drafted in accordance with her husband’s instructions. The claimant had attended the

meeting at which the instructions were given. There was a conflict between her evidence and that of

the solicitor. The Judge preferred the claimant’s evidence. The solicitor had not kept a proper

attendance note.

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B.7.3. Mitigation by rectification

There was a second ground on which the claimant failed in Walker v Medlicott & Son [1999] 1 WLR

727. The claimant had failed to mitigate by bringing rectification proceedings. Pursuant to s. 20 of

the Administration of Justice Act 1982 if a court is satisfied that a Will if so expressed that it fails to

carry out the testator's intentions, in consequence (a) of a clerical error or (b) of a failure to

understand his instructions, it may order that the Will shall be rectified so as to carry out his

intentions. An application for an order for rectification shall not, except with the permission of the

court, be made after the end of the period of 6 months from the date on which representation with

respect to the estate of the deceased is first taken out (s. 20(2) AJA 1982).

In Walker v Medlicott the Court of Appeal found that, if, as the claimant asserted, the Will failed to

carry out the testatrix’s intentions, that must have been in consequence either of a clerical error of

the solicitor in recording her instructions in his attendance note, leading to a corresponding error in

the Will as drafted; alternatively, of a failure on his part to understand her instructions. On either

basis the Will could have been rectified. The key point was that the evidence in support of the

negligence claim would be the same as that in support of the rectification claim. Indeed, rectification

was easier to establish than negligence (on the basis that there may have been a non-negligent, but

rectifiable, misunderstanding by the solicitor of the testatrix's intentions). The claimant should have

applied for rectification first, exhausting that remedy, and only sued the solicitor as a last resort.

If successful, the claimant would have inherited the house; any damages for negligence would have

been confined to the costs incurred in putting right the terms of the Will (there being no bar to a

White v Jones claim that the claimant also has a remedy in rectification). If, on the other hand, the

application for rectification failed, so would the negligence claim fail.

In Walker the solicitor had not offered an indemnity in respect of the costs of the rectification claim.

It was also accepted that a claimant need not take the risk of starting uncertain litigation against a

third party (Pilkington v Wood [1953] Ch 770). However, in Pilkington, the defendant was admitting

negligence and yet contending that the claimant should embark on complicated litigation with only

doubtful prospects of success. By contrast, in Walker, the defendant was denying negligence and

contending correctly that the claimant would have no greater difficulty in establishing claim for

rectification than in establishing liability against him.

Walker v Medlicott was distinguished in Horsfall v Haywards [1999] 1 FLR 1182. In Horsfall the

claimant’s uncle instructed the defendant solicitors to prepare a Will leaving his house to X for life,

with the remainder to the claimants. Due to the solicitor’s admitted negligence, the Will left the

house to X absolutely. By the time the mistake came to light, X had sold the house and emigrated to

Canada with the sale proceeds. The court was prepared to proceed on the basis that a rectification

claim would be likely to succeed. However, the question was whether the claimant had failed to take

reasonable steps, in not bringing rectification proceedings and in not seeking to negotiate with X.

The claimant had acted reasonably in not instituting rectification proceedings. Such proceedings

would have had to have been commenced in Canada; they would have been resisted; and the costs

would probably have extinguished the entirety of the fund. The rectification proceedings in

themselves would not have resulted in any material recovery of the funds (without further action to

recover the sale proceeds). In any event, by the time that the claimant became aware of the

mistake, the capital of that trust fund had been made available to X in Canada, and the 6-month

time limit for rectification proceedings had expired. The claimant had not taken proceedings within

the jurisdiction, within time, as the defendant solicitor, who acted in the administration of the

estate, had not advised as to the possibility of rectifying the Will.

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B.7.4. Advice where potential claim to rectify

Generally, where the claim is that the Will does not express the testator’s intentions due to a clerical

error, or a failure to understand the testator’s instructions, the claimant should first commence

rectification proceedings. If successful, a claim can subsequently be made in negligence against the

solicitor to recover the costs of the action. It may also be possible to claim damages equal to the

difference between the value of benefits under the Will, following the reasonable compromise of a

rectification claim, and the value of such benefits if there had been no negligence (see the special

facts of Martin v Triggs Turner Bartons [2010] PNLR 3).

Alternatively, negligence and rectification claims could be brought in the same proceedings, with the

negligence claim being stayed pending the conclusion of the rectification claim. In any event, the

negligence claim should not be commenced in advance of the negligence proceedings (Re Grattan

[2001] WTLR 1305, at 1311B).

However, negligence proceedings may be commenced if, for any reason, it is unreasonable to expect

the claimant first to seek rectification, e.g. because of difficulties of enforcement.

B.7.5. Clerical error/failure to understand instructions

It is clearly important to identify whether the case is an appropriate for a rectification claim because,

if so, that claim should normally be pursued in preference to negligence proceedings.

There are 3 relevant questions: (1) what were the testator’s intentions with regard to the

dispositions in respect of which rectification is sought; (2) whether the Will is so expressed that it

fails to carry out those intentions; and (3) whether the Will is expressed as it is in consequence of

either (a) a clerical error or (b) a failure on the part of someone to whom the testator has given

instructions in connection with his Will to understand those instructions (Re Segelman [1996] Ch

171, at 180). Although the standard of proof required in a claim to rectification is the balance of

probabilities, the probability that a Will which the testator has executed in circumstances of some

formality reflects his intentions is usually of such weight that convincing evidence to the contrary is

necessary (Re Segelman, at 184). Speculation is no basis upon which to interfere with a formal

expression of testamentary intentions.

Therefore, in the case of both a rectification and a negligence claim, it is necessary to adduce

convincing evidence that the Will does not express the testator's intentions.

The courts have given a wide meaning to the term “clerical error”. In Wordingham v Royal

Exchange Trust Co Ltd [1992] Ch 412 the testatrix instructed her solicitor to draft a new Will

making changes to her previous Will concerning specific bequests, but otherwise leaving the

provisions of the previous Will intact. The solicitor drafted the new Will, but by mistake excluded a

provision, contained in the previous Will, exercising a power of appointment. A clerical error was

defined to mean an error made in the process of recording the intended words of the testator in

the drafting or transcription of the Will. The failure to copy the provision exercising the power of

appointment, from the previous Will into the new Will, amounted to a clerical error. Where it is

alleged that words have inadvertently been omitted, rather than inserted, there may be a greater

potential for characterising the error as one of a clerical nature (Pengelly v Pengelly [2008] Ch 375,

at 383).

There will also be a clerical error where the relevant provision – by reason of which the Will is so

expressed that it fails to carry out the testator’s intentions - has been introduced, or not been

16

deleted, in circumstances in which the draftsman has not applied his mind to its significance or

effect (Clarke v Brothwood [2007] WTLR 329 where the testatrix had intended to give 20% of her

residuary estate to each of her 4 godchildren). The Will provided for gifts to the 4 godchildren of

1/20 (not 20%) of the residuary estate, which had the effect that 60% of her estate remained

undisposed of. Even if the testatrix had said 1/20, and the solicitor had correctly recorded 1/20,

there would be still have been a clerical error since, if the solicitor had applied his mind to the

problem, he would have appreciated that the testatrix could not have meant 1/20.

Rectification may be ordered under s. 20(1)(b) AJA 1982 where there is no clerical error, i.e. where

the error is caused by the solicitor’s deliberate choice of words, if that choice of words is caused by

the failure to understand the testator’s instructions (see Wordingham v Royal Exchange Trust Co Ltd

[1992] Ch 412, at 419). Therefore, if it can be proved by convincing evidence that the Will contained

an error caused by a failure to understand instructions, rectification will be available (see Sprackling

v Sprackling [2009] WTLR 897).

However, it will often be the case that the solicitor has introduced words, to which he has applied

his mind with a proper understanding of his instructions, but which (perhaps through failure

properly to understand the law) do not achieve the objective which the solicitor and the testator

intended (Re Selegman, at 184). Such an error is not caused by a failure to understand the

instructions. Nor is it a clerical error. In that event, the appropriate remedy of any beneficiary

suffering loss by reason of the error is a negligence claim against the Will draftsman. Rectification

will not be available.

Nor will rectification be an appropriate remedy where the solicitor has failed to take the testator’s

instructions, as opposed to failing to understand instructions that have been given (Littlewood v

Wilkinson Woodward [2009] PNLR 29, at para. 33; see B.8.3 below).

B.8. Failure to ascertain testator’s intentions

B.8.1. Duty to ascertain testator’s instructions on relevant matter

The solicitor’s negligence may consist in a failure to take the testator’s instructions on a material

matter, as opposed to a failure to understand instructions that have been given, or a clerical error in

recording those instructions.

In Gibbons v Nelsons [1999] Ch 326 the testatrix had a power of appointment by deed or Will over a

half share in a trust fund, the principal asset of which was a house in which her sister, the claimant,

lived with the testatrix. Her Will contained a gift of her residuary estate, including any property over

which she might have a general power of appointment by Will, in favour of charities. The solicitor

did not advise the testatrix that she had a power of appointment over a half share in a trust fund,

nor that the gift of residue effected an appointment in favour of the charities. Indeed, there was

some evidence that the solicitor did not appreciate the effect of the residuary gift.

The Court found that there was nothing to limit the scope of the solicitor's duty. He should therefore

have ascertained what the client's intentions were with respect to her half share of the trust fund.

He was aware of the testatrix’s power of appointment. It was, therefore, his duty to remind her that

she had this power and to ascertain from her whether she wished to exercise it and if so in whose

favour; and to remind her of the consequences of not exercising the power.

17

B.8.2. Proof of testator’s intentions

However, the claim in Gibbons v Nelsons failed since there was not sufficiently unequivocal evidence

as to the testatrix’s intention that the trust fund should go to the claimant. The Judge accepted that

convincing evidence was required as to what the testatrix would have done if properly advised.

However, there was no real evidence, let alone convincing evidence, that the testatrix intended

leaving her half share of the trust fund to her sister, or to anyone else for that matter. There was

certainly no written record. The claim, therefore, failed, even though it was a reasonable assumption

that she did not intend to leave her half share to the charities.

In any case, no duty was owed to the claimant as the there was no evidence that the testatrix made

the solicitor aware of any intention that the claimant should benefit from her exercise of the power

of appointment (see A.7 above).

This conclusion does seem generous to the solicitor. The only reason that the testatrix had not made

the solicitor aware of any intention to benefit the claimant was that she was not advised as to the

possibility of benefiting the claimant. However, on the balance of probabilities, it must have been

likely that the testatrix would have appointed her half share in the property, in which she had

cohabited with her sister, in favour of her sister.

There may, however, be a distinction between cases such as Gibbons and Littlewood (see B.8.3

below) where the claim is that the testator would, if properly advised, have made some different

provision from that in the Will (which would require convincing evidence of a contrary intention);

and a case such as Sutherland (see B.8.3 below) where the testator had made no provision at all in

the events that had happened (which might require a lower standard of proof).

B.8.3. No liability if advice did not or would not have caused change to Will

In the New Zealand case of Sutherland v Public Trustee [1980] 2 NZLR 536 the 81 year-old testator

left his whole estate to his 65-year old wife. No provision was made as to what should happen in the

event that the wife predeceased the testator. The wife did, in fact, predecease the testator. The

testator had no children of his own. However, the wife had children by a previous marriage, who

sued the Public Trustee for failing to include in the Will a provision that they were to be entitled to

the estate if their mother predeceased the testator. The claim failed. The court found that the

solicitor had advised the testator that the wife might predecease him, and suggested that provision

be made for the step-children. The testator had decided not to make any provision in this event.

There was no duty to persuade the testator otherwise. Arguably, the decision would have been

different if the solicitor had simply failed to advise the testator to include some provision in the

event of his wife predeceasing him.

In Littlewood v Wilkinson Woodward [2009] PNLR 29 gave instructions that she wished to make a

gift of the sale proceeds of her house to her granddaughter on attaining the age of 21. The solicitor

was concerned about the testatrix’s mental capacity, in particular that she might have been affected

by alcohol when giving her instructions. The solicitor decided to meet with the testatrix again and to

make a fresh start in taking her instructions. The testatrix thereupon gave new instructions which

did not include a specific gift of the testatrix’s house to her granddaughter. There was no discussion

relating to the testatrix’s previous instructions. The granddaughter claimed that the solicitors had a

duty to clarify the testatrix’s intentions with relation to her house. The Judge accepted that it might

have been better to have made specific reference to the testatrix’s previous instructions. However,

having regard to the fact that the solicitor had taken reasonable care to obtain comprehensive

instructions at the subsequent meetings, their failure to query the testatrix’s change of testamentary

intention did not amount to negligence. In any event, the Judge was not satisfied that, if the matter

18

had been raised, the testatrix would have stated that she wished to leave her house to her

granddaughter.

B.8.4. Scope of retainer

If the claim is that the solicitor has failed to ascertain the testator’s intentions, there may be an issue

as to whether the solicitor had a duty to advise on the issue in question. In Gibbons v Nelsons [1999]

Ch 326 the Court found that, although the burden of proof rests with the claimant to establish what

the scope was of the solicitor's retainer, once the claimant establishes that the solicitor was retained

to prepare a Will, the burden must shift to the solicitor to show, if he can, that his responsibility for

the preparation of the Will did not extend to advising the client on some aspect of the Will relevant

to the claim.

If, however, there is any dispute between the client and the solicitor as to the extent of the retainer,

prima facie the client’s version should prevail (Gray v Buss Merton [1999] PNLR 882).

B.9. Failure to give competent advice in connection with Will

B.9.1. Miscellaneous duties to advise

A number of duties to advise have already been discussed, including duties to:

(a) advise as to the proper mode of execution of the Will (see B.3 above)

(b) advise whether the proposed testamentary dispositions are effective (see B.6 above);

(c) ascertain correctly the testator’s intentions, and to advise according (see B.8 above)

including a duty to point out that the testator has not made any, or any effective, gift in

certain circumstance, e.g. if the testator were to survive the donee (see B.8.1 above).

There will be a duty to advise that a Will is revoked on subsequent marriage, by virtue of s. 18 of the

Wills Act 1838, at least if the solicitor has reason to believe that marriage is a real prospect in the

near future (see Hall v Meyrick [1957] 2 All ER 722, at 730).

There will be a duty to advise a testator, who wishes to revoke a “mutual Will”, that the Will will not

be effective without the consent of the other person who had made a mutual Will. If such advice is

not given, the solicitor may be liable for the litigation costs of setting aside the new Will.

There will no doubt be a duty to advise as to the risk of claims being made against the estate, e.g. an

undue influence claim if instructions are given to the solicitor with a principal beneficiary being

present.

There will also be a duty to advise as to the risk of a claim under The Inheritance (Provision for

Family and Dependants) Act 1975. It may be, for instance, that an adult child of the testator has a

claim under the 1975 Act, but that no provision is made for the child (of whom the solicitor is aware)

because the solicitor fails to advise as to the possibility of such a claim. The beneficiaries of the

estate (or the personal representatives if the costs are payable out of the estate) may have a claim

against the solicitor in respect of any reasonable costs incurred in defending or settling the 1975 Act

proceedings; or possibly even in respect of some or all of the provision which they may be ordered

or agree to pay to the child, if a suitably-worded memorandum by the testator, as to his objective

reasons for excluding the child would have given stronger grounds for defending the claim.

19

Although there may be a duty to advise, there is no duty to persuade the testator to accept the

advice (Sutherland v Public Trustee [1980] 2 NZLR 536).

B.9.2. Duty to give tax advice in connection with the Will

There is no doubt a duty to advise as to the tax implications of the Will which the solicitor is asked to

prepare. In Cancer Research Campaign v Ernest Brown & Co [1997] STC 1425 Harman J said that he

did not doubt that a solicitor, in considering a Will he is asked to prepare, must consider what

inheritance tax complications will be caused by the bequests in respect of which he had been given

instructions.

If the solicitor wishes to exclude liability for tax advice, clear, informed and written consent of the

testator will be required. The client should be fully informed as to the limited reliance he may place

on the solicitor and the reason for it (i.e. the solicitor's lack of any basic knowledge or competence

as to tax), that this limitation is not a normal term of a solicitor's engagement, and that the client

may be better advised to go to another solicitor who is not so handicapped and can be retained with

no such limitation on his duties. Common sense requires that all these matters should also be

recorded in an attendance note of the meeting where they are discussed and agreed, and should

subsequently be recorded in a letter to the client (Hurlingham Estates Ltd v Wilde & Partners [1997]

1 Lloyd’s Rep 525, at 529).

In practice, the level of consideration of tax issues may not be that onerous. Consideration should no

doubt be given to the issue of whether to include a nil rate band legacy in favour of chargeable

beneficiaries, or whether to rely upon the transferable nil rate band. The extent of the duty will,

however, vary according to the size and nature of the estate, the age of the testator, the identity of

the proposed beneficiaries, and the complexity of the Will.

The necessity to give tax advice may have an impact upon the assessment of a reasonable period of

delay in preparing the Will.

B.9.3. Failure to give post-death planning advice to testator

The existence of a duty to give post-death planning advice in respect of the estate of someone other

than the testator was denied in Cancer Research v Ernest Brown & Co [1997] STC 1425. A brother

and sister died within 18 months of each other. The majority of the brother’s estate passed to the

sister, and the majority of her estate to 7 charities. A legal executive in the defendant firm acted in

the administration of the brother’s estate, and prepared the sister’s Will following the brother’s

death. It would have been beneficial for IHT purposes for the sister (or after her death, her personal

representatives) to have entered into a deed of variation within 2 years of the brother’s death, in

compliance with s. 142 IHTA 1984, redirecting the brother’s estate directly to the charities. There

would then only have been one transfer of value, which would have exempt. However, no deed of

variation was executed within the 2-year period.

The charities claimed that the solicitors were under a duty to the sister to advise her to execute a

deed of variation of her brother’s estate redirecting his estate directly to the charities, saving IHT on

the brother’s death. Harman J held that the retainer was to prepare the sister’s Will. This was

properly carried out. There was no duty to inform an intended testator, who comes in to instruct a

solicitor about his or her Will, about tax avoidance schemes in connection with some quite other

estate. The duty was limited to carrying out the testator’s instructions completely and promptly.

Harman J also rejected the claim on the grounds that there was no evidence that the testatrix would

have acted on advice to enter into a deed of variation.

20

The Judge also rejected a claim that the legal executive was under a duty to advise the charities of

their entitlement so that they could execute a deed of variation within 2 years of the testator’s

death (see B.10 below).

The decision was influenced by the Judge’s perception that the legal executive could not be

expected to give tax-avoidance advice. The Judge commented that tax avoidance is a matter which

occurs naturally and at once to any regular practitioner in Chancery matters, and to most- although

nowadays not all - members of chambers in Lincoln’s Inn. That did not mean, however, that it is an

idea that occurs naturally, or that it should be attributed to ordinary people in the ordinary way of

business, or to a legal executive in a small firm of high street solicitors.

It must, however, be debateable whether: (a) a firm of solicitors, holding itself out as competent to

prepare Wills and administer estates, could not reasonably be expected to give advice as to saving

IHT by means of a deed of variation; and (b) it would be appropriate in all cases to apply the

standard of expertise to be expected of a legal executive in a small firm of high street solicitors. A

firm of solicitors, particularly a larger firm with a private client department, would not be safe to

conclude that it could be under no liability in similar circumstances for failure to advise as to tax

savings to be achieved by deeds of variation.

B.9.4. Defective post-death planning advice

Furthermore, if solicitors do, in fact, give incorrect advice as to deeds of variation, or fail to act in

such a way that the deed is effective for tax purposes, they could be liable to the beneficiaries of the

client’s Will. In Cotterell v Leeds Day [2001] WTLR 435 a deed of variation was executed by a wife

redirecting the husband’s half share in the matrimonial home, which had been left to his wife, to

their daughter. The solicitors negligently failed to register the deed of variation within 6 months of

execution with the result that the deed was not treated as having been made by the husband on his

death for IHT purposes. In consequence, the wife made a PET, which became chargeable in her

estate on her death. The daughter sued the solicitor for damages equal to the additional IHT payable

in the wife’s estate on her death. It is not clear whether the daughter sued in her capacity as

executor or beneficiary of the wife’s estate. In any event, there was an issue as to limitation which

was heard as a preliminary issue. The action was held not to be statute-barred. There is no further

report of the case. Presumably, the claim was compromised. This does suggest that the solicitors

could, in similar circumstances, be liable in respect of the additional IHT liability caused by an

ineffective deed of variation.

As to whether there can be a liability in respect of lifetime transactions, entered into for estate

planning reasons, see F below.

B.10. Duty to advise beneficiaries of entitlement

In Cancer Research v Ernest Brown & Co [1997] STC 1425 (see B.9.3 above) the charities made a

secondary claim that the legal executive in the defendant firm had negligently failed to advise the

charities, after the death of the sister, that they were beneficiaries of her estate. The charities

claimed that, if they had been so advised within 2 years of the brother’s death, they would have

executed a deed of variation of the brother’s Will redirecting his estate from the sister to the

charities. The sister died about 6 months before the expiry of the 2-year period, so that there was

ample time to inform the charities of their entitlement. As it was, the charities did not become

21

aware of their entitlement until after the 2-year period for executing a tax-effective deed of

variation had passed.

Harman J dismissed this claim on the basis that the defendant firm, acting as solicitors in the

administration of the sister’s estate, was under no duty to the residuary beneficiaries of that estate,

only to the executors thereof. A solicitor acting in the administration of the estate is under no duty

to notify a legatee of the legatee’s entitlement unless instructed to do so by the executor. Indeed, an

executor is under no duty to inform a legatee of the legatee’s prospective entitlement to the legacy

(Re Lewis [1904] 2 Ch 656, at 658). There was in any event no duty on the defendant firm, during the

course of administration of the estate, to notify the charities that the estate of the sister included

substantial benefits under the brother’s unadministered estate, or of the date of the brother’s

death, so as to give them the opportunity to execute a deed of variation whereby they would be

deemed for tax purposes to have derived their entitlement from another estate. The duty on a legal

executive could not include a duty to facilitate a tax-avoidance scheme.

The decision is questionable. Where there are double deaths in quick succession, and the ultimate

beneficiaries are charities, the tax saving to be derived from a deed of variation, executed within 2

years of death, should be apparent to any reasonably competent solicitor or legal executive acting in

the estate. In Cancer Research the legal executive was also an executor of the sister’s estate. Why

should he not have been under a duty at least to notify the charities of their entitlements, given that

it was readily foreseeable that they would otherwise be deprived of an opportunity to maximise

their entitlements?

If a solicitor does, in fact, advise as to a beneficiary’s entitlement, but does so negligently, causing

loss to the beneficiary who has relied upon that advice, the solicitor may be liable to the beneficiary

(Martin v Triggs Turner Bartons [2010] PNLR 3, paras. 93 to 100).

B.11. Delay in obtaining grant

In Chappel v Somers & Blake [2003] WTLR 1085 the solicitors instructed to act in the administration

of the estate did nothing to obtain a grant of probate for almost 5 years with after which the

executrix obtained a grant of probate through another firm. The executrix claimed loss of income

from two properties comprised in the residuary estate during the period of delay. There was no

question but that the failure to obtain a grant promptly amounted to negligence. The issue was

whether the executrix (who had no interest in the residuary estate) had suffered any loss which she

could claim (see D.1.2 below).

Neuberger J accepted (para. [12]) that no duty was owed by the executor to the beneficiaries arising

out of a delay by the executor in obtaining a grant of probate. This surprising result may be

explained by the fact that a person is not under a duty to accept an appointment as an executor. In

any event, a beneficiary who thinks that an executor is not moving swiftly enough to obtain a grant

of probate can apply for the issue of a citation to accept or refuse a grant, or for an order passing

over the executor. If an executor cannot be liable to a beneficiary for delay in obtaining a grant,

there can be no question of the executor having a claim for an indemnity against the solicitors for

any liability arising out of the same delay.

In Sifri v Clough & Willis [2007] WTLR 1453 the beneficiaries of a Will, which was admitted to

probate after a contested probate action, claimed damages from the solicitors who had negligently

prepared a later Will (set aside in the probate action) for losses incurred in consequence of the delay

in obtaining a grant due to the probate dispute. This aspect of the claim was rejected on the grounds

that, where a dispute emerges as to which Will is valid, there is much that can be done to protect

22

the estate pending the outcome of the probate action, including the appointment of an interim

receiver or administrator pending action.

B.12. Failure to notify personal representatives

There is no English authority as to whether a solicitor, who has agreed to store the Will, owes a duty

of care to the executors of the estate in respect of loss suffered by a negligent failure to locate the

executors and notify them of the existence of the Will. However, in the Australian case of Hawkins v

Clayton (1988) 164 CLR 539 it was held that such a duty was owed. The solicitors made little or no

effort for 6 years to trace the executor causing loss (a fine for late payment of estate duty, and

diminution in the value of estate property allowed to fall into disrepair). Such loss was recoverable,

being loss of the exercise or enjoyment of the rights of ownership by an executor who does not

know of his entitlement. It is submitted that an English court would reach the same conclusion on

the basis that a solicitor is entrusted with the custody of a Will in order to ensure that the Will is

safeguarded for the benefit of the executor, so that it can be produced promptly for probate for the

ultimate benefit of the beneficiaries.

B.13. Duty not to act

Where there was a continuing contractual relationship between a solicitor, and a husband and wife,

it was a breach of the solicitor’s retainer to prepare a new Will for the husband disinheriting the

wife, and also to advise that the joint tenancy of the matrimonial home should be severed (Hines v

Willans [2002] WTLR 299). The solicitor had prepared reciprocal Wills for the husband and wife, and

continued to advise the wife on testamentary matters. The wife had to pay a sum of money to her

step-children to settle her claim to set aside the husband’s new Will. She successfully recovered the

whole of that sum on the basis that the Judge found that – had the husband been turned away by

the defendant solicitor – he would not have pursued his aim to instruct another solicitor to produce

a Will in the same terms.

A solicitor will also have a duty not to act where he has reason to believe that the Will has been

procured by undue influence, or if not satisfied that the instructions represent the wishes of the

testator (see C.2 and C.3 below). He may also be under a duty not to act if the testator is clearly

incapable of giving testamentary instructions.

C. PROBATE CLAIMS

C.1. Testamentary capacity

C.1.1. Preparation of Will for incompetent testator

A solicitor may be liable to beneficiaries of a Will if the solicitor has prepared a Will for execution by

the testator in circumstances in which no reasonable solicitor would have so acted having regard to

the testator’s apparent lack of testamentary capacity. However, there is no English authority in

which a solicitor has been held so liable.

C.1.2. English authority suggesting that duty to inquire into testamentary capacity and, if

necessary, refuse to act

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In Re Simpson (1977) NLJ 487 Templeman J said that in the case of “an aged testator or a testator

who has suffered a serious illness, there is one golden rule which should always be observed,

however straightforward matters may appear and however difficult or tactless it may be to suggest

that precautions be taken: the making of a will by such a testator ought to be witnessed or approved

by a medical practitioner who satisfied himself of the capacity and understanding of the testator,

and records and preserves his examination and findings.”

This suggests that a medical opinion should be obtained, or at least proposed, in the case of an aged

testator, or a testator who suffers from a serious illness, even if there are no obvious indicators of

lack of capacity. It also implies that a medical opinion should be sought, even without the testator’s

consent or approval. Indeed, in Re Morris [2001] WTLR 1137 Rimer J stated that the solicitor should

have “insisted” that some medical assistance was invoked. The implication is that the solicitor should

refuse to act if the testator does not consent. The Solicitors’ Code of Conduct 2007, r. 2.01(1) states

that a solicitor is generally free to decide whether to take on a particular client (see also Hall v Estate

of Bruce Bennett [2003] WTLR 827, at C.1.6 below).

In Worby v Rosser [2000] PNLR 140 the testator made two Wills, the first in 1983, the second in

1989. The 1989 Will was set aside in contested probate proceedings on the grounds, inter alia, of

lack of testamentary capacity. The claimants (who were beneficiaries of the 1983 Will) brought a

negligence claim against the solicitor who had prepared the 1989 Will - alleging that he owed a duty

to them – as beneficiaries of the 1983 Will – to take reasonable care to ensure that the testator had

testamentary capacity. The claimants claimed as damages the irrecoverable costs of the probate

action: a costs order had been obtained against the defendants to the probate action, but was

unenforceable.

The claim was dismissed on the basis that any claim for the costs of the probate proceedings was

one which should be made by the personal representatives of the 1983 Will, and not by the

beneficiaries thereof, on the basis that the beneficiaries’ costs were payable out of the estate (see

C.5.2 below).

There was, therefore, little consideration given to the issue of what duty, if any, a solicitor might

owe (to the testator or his personal representatives) when accepting instructions from a testator

who is subsequently found to have lacked testamentary capacity. Chadwick L.J. merely commented

that he was content, for present purposes, to adopt the careful analysis of the matters which a

solicitor would need to consider when accepting instructions to make a Will set out in paras. 52 to

54 in Vol. 42 of the Encyclopedia of Forms and Precedents, including a duty “when entering upon the

task of preparing a will, and being satisfied that the intending testator is not under any incapacity, ...

to ascertain from the testator in all necessary detail what are his instructions.”

It might, therefore, be thought that there is a duty on a solicitor to satisfy himself that the intending

testator does not lack testamentary capacity; and, if not so satisfied, to decline to accept

instructions. If the solicitor does accept instructions and prepares a Will, where the testator is

subsequently found to have been incapable, the solicitor could be liable to the personal

representatives of the last valid Will for the costs of the probate action to set aside the later Will.

C.1.3 New Zealand authority that no general duty to inquire into testamentary capacity and/or

to refuse to act

However, in the New Zealand case of Public Trustee v Till [2002] WTLR 1169, at para. [71], the Judge

expressed the view that the passage, quoted in C.1.2 above from the Encyclopedia of Forms and

Precedents, fell short of establishing any positive duty on a solicitor to establish to his or her

24

satisfaction that the testator has testamentary capacity. In any event, it begged the question as to

the extent of the solicitor’s duty should there be any doubt about testamentary capacity.

In Knox v Till [2002] WTLR 1147 the New Zealand Court of Appeal did not accept that there was a

duty on a solicitor to refuse to act if not reasonably satisfied as to the testamentary capacity of an

intending testator. There is in general an obligation to carry out the client’s instructions. The

appropriate response of a solicitor, who has doubts as to capacity, is to give the testator advice as to

the consequences of executing a Will, where such capacity is in doubt, and to record that advice. The

claim by the residuary beneficiaries of the last valid Will, to recover the costs of the probate claim to

set aside the Will, was struck out on the basis that the solicitor was under no obligation to refuse to

carry out the client's instructions to prepare a Will, even if not reasonably satisfied as to the

testator's testamentary capacity.

Indeed, In Public Trustee v Till it was not alleged that the solicitor should have refused to act. The

claim was that the solicitor should have made appropriate inquiries as to the testator’s capacity,

including obtaining medical advice. However, the claim failed. On the evidence, the Judge found that

there was nothing in the circumstances surrounding the taking of instructions for the invalid Wills

which ought to have alerted a reasonably competent practitioner to any lack of testamentary

capacity. There was, therefore, no reason to obtain medical advice. In the absence of clear indicators

of lack of understanding, or plainly defective recollection of assets or family members, the solicitor is

under no general duty to inquire into the issue of lack of testamentary capacity.

C.1.4. Duty to refuse to act if the testator clearly incapable of giving instructions

In Public Trustee v Till [2002] WTLR 1169 the Judge accepted that a solicitor could only decline to

proceed with a Will in exceptional circumstances, including “where the client is so obviously lacking

in mental capacity that the instructions are not truly instructions at all” (para. [26]). A solicitor could,

therefore, be held liable to the personal representatives of a previous, valid Will in respect of any

irrecoverable costs of probate proceedings incurred by the personal representatives or the

beneficiaries of that previous Will, to the extent that those costs are payable out of the estate.

However, if the client was obviously lacking in mental capacity, the costs of any probate action to set

aside the Will may be minimal and/or that a costs order might be made against the defendants to

the probate action.

This must be the case also in English law.

C.1.5. Whether costs of probate action caused by solicitor’s failure to make inquiries as to

testator’s capacity

In Public Trustee v Till [2002] WTLR 1169 it was stated that, even if there were grounds for inquiry as

to the testator’s capacity, the claimants would have to prove that the testator would have agreed to

medical advice being taken; that such medical advice would have established lack of capacity or, at

least, doubts about that capacity; that, if the testator had been informed of the medical advice and

advised appropriately, the testator would not have proceeded with the Will; and that the costs of

the probate action were caused by and within the reasonable contemplation of the solicitor. These

are tough tests to satisfy. In Public Trustee v Till it was, for instance, impossible to be satisfied that

the testator would not have proceeded with the Will, if informed that the medical advice cast doubts

on his capacity, and that his Will might be challenged. There was a complete absence of evidence on

this point.

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C.1.6. Refusal to prepare Will for testator on grounds of testator’s apparent incapacity

In Ryan v Public Trustee [2000] 1 NZLR 700 the Public Trustee was held to be liable to a beneficiary

for having failed to have a Will executed on the instructions of the testatrix. The Public Trustee had

consulted with a matron at the testatrix’s rest home, and concluded that the testatrix lacked

capacity. However, no doctors had been consulted. The Judge held that there was a duty to

investigate testamentary capacity by consulting the testatrix’s doctors. Had that happened, the

medical evidence would have established the testatrix’s testamentary capacity. The beneficiary of

the Will had been deprived of the opportunity of having a Will made in her favour. Damages were to

be assessed on the basis of the loss of that chance.

However, it is questionable whether a solicitor would have any liability to a disappointed beneficiary

of a Will in respect of which the solicitor declines to accept instructions, particularly if the solicitor so

declines in the reasonable belief that the testator lacked capacity. In the Canadian case of Hall v

Estate of Bruce Bennett [2003] WTLR 827 the prospective testator could not remember the full

extent of his estate and was not alert enough to review or sign his Will. During his interview with the

lawyer, he could only stay awake for a few minutes at a time. The lawyer refused to accept any

retainer. A beneficiary of the intended Will sued the lawyer claiming that the testator was

competent, and that the lawyer had a duty to accept the retainer and prepare the Will. The Ontario

Court of Appeal determined that the lawyer acted reasonably and prudently in assessing capacity,

and in refusing the retainer. The lack of any retainer meant that there could be no duty to the

intended beneficiary (see A.4 above). Indeed, the Court even doubted whether, regardless of the

lawyer’s opinion as to capacity, he could be held to be under any legal duty to accept the retainer.

C.1.7. Advice as to how to proceed

English (and, indeed, Canadian) authority is, therefore, arguably, in conflict with the Public Trustee v

Till if and to the extent that that Till states that: (a) there is no duty to inquire into the issue of

testamentary capacity in the absence of clear indicators of lack of understanding; (b) the solicitor

would only be justified in seeking medical advice if the testator agreed; and (c) the solicitor would

not be justified in refusing to act unless the testator was clearly incapable of giving instructions.

There is, therefore, some uncertainty as to the law. In particular, it is not clear whether the solicitor

should or should not accept instructions where there is doubt as to the testator’s capacity. A

solicitor may be damned if he does, and damned if he does not. If he refuses to prepare the Will, he

may be liable to the disappointed beneficiaries of that Will. If he prepares the Will, which is then set

aside, he may be liable to the personal representatives or beneficiaries of the previous, last Will in

respect of the costs of the probate proceedings. A number of rules of thumb are suggested.

Firstly, the safe course must be to advise that a medical opinion be sought where the testator is old,

has suffered a serious illness, or where there is reason to suspect a lack of capacity, including a case

where the Will is irrational or perverse (see Sharp v Adam [2006] WTLR 1059; Re Ritchie [2009]

EWHC 709 (Ch)). Secondly, the medical practitioner should be informed of the test of testamentary

capacity; be informed of any indications of lack of capacity; and be advised of the terms of the

proposed Will and of previous Wills and of other material matters, such as details of the testator’s

family and assets. Thirdly, the doctor should, preferably, have some experience in mental capacity

issues, and should conduct an examination of the testator’s capacity shortly before the execution of

the Will. Fourthly, if the testator declines to agree to a medical assessment, or insists upon

proceeding with a Will when the medical evidence casts doubt on the testator’s capacity, the

solicitor may be justified in refusing to act. However, the safer course is to leave the issue of capacity

for decision by the court, and to prepare the Will for execution, unless there can be no reasonable

26

doubt that the testator lacks capacity. It is unlikely that the solicitor will be found to have acted

negligently in accepting instructions in these circumstances. Fifthly, all advice should be carefully and

fully recorded in writing.

C.2. Preparation of Will of which the testator did not know of and approve

A Will can be set aside where the testator did not know of and approve its contents. Where there

are suspicious circumstances as to whether the testator knew of and approved its contents, and a

failure to adduce sufficient evidence to rebut that suspicion, e.g. evidence that the contents of the

Will were explained to the testator by an independent solicitor. Therefore, a solicitor who prepares a

Will, without taking proper steps to ensure that the contents of the Will are brought home to the

testator, may well be liable to the personal representatives, or beneficiaries, of a previous valid Will

in respect of the costs of the probate action to set aside the Will.

In Sifri v Clough & Willis [2007] WTLR 1453 the testator made two Wills in favour of his wife which

were set aside in a probate action, brought by the testator’s daughter, as the beneficiary of a

previous Will, on the grounds of want of knowledge and approval. The daughter did not obtain an

award of costs in the probate action. She subsequently brought negligence proceedings against the

solicitor, who had prepared the Will, to recover damages equal to her costs, on the grounds that the

solicitor had failed to ascertain from the testator what his true instructions were, and that he had

taken instructions from the testator’s widow. The solicitor accepted liability. As the Judge

commented, if a solicitor fails to take instructions from the proposed testator, takes them instead

from a third party, and does not check to see he has understood his instructions properly, and does

not keep proper notes of his instructions, it is reasonably foreseeable that a challenge to whatever

Wills are executed as a result will ensue, and that the costs thereby incurred are foreseeable.

Rule 2(1)(d) of the Solicitors Code of Conduct provides that a solicitor must refuse to act where

instructions are given by someone other than the client, or only by one client on behalf of others in a

joint matter. The solicitor must not proceed without checking that all clients agree with the

instructions given.

The preparation by a solicitor of a Will under which the solicitor himself benefits significantly will be

a breach of rule 3.04 unless the solicitor has taken independent advice. If this rule is breached, the

Will could be set aside for want of knowledge and approval (see Wintle v Nye [1959] 1 WLR 284).

The solicitor could be liable in these circumstances to the beneficiaries or personal representatives

of a previous Will in respect of the costs of probate proceedings to set aside the Will.

It is also conceivable that the solicitor could be liable to the intended beneficiaries of the Will, which

is set aside for want of knowledge and approval, for the loss of a chance that the testator would

have made a valid Will if the solicitor had fully explained its contents to the testator. However, there

is no reported case.

C.3. Preparation of Will procured by undue influence

Undue influence in the case of Wills means coercion. In Worby v Rosser [2000] PNLR 140 (see C.1.2.

above) two Wills was set aside in probate proceedings on a number of grounds, including undue

influence. The beneficiaries of the last valid Will brought negligence proceedings against the

solicitors who had prepared the invalid Wills alleging, claiming their costs in the probate

proceedings. One of the claims was that the solicitors failed to take reasonable care to ensure that

27

the Will was not procured by undue influence. The claim was dismissed on the grounds that the

proper claimants were the personal representatives of the last valid Will, not the beneficiaries, as

the costs of the beneficiaries were payable out of the estate. However, in principle, there is no

reason why solicitors should not be held liable to the personal representatives for the costs of

probate proceedings if they failed to take reasonable care to ensure that the Will was not procured

by undue influence.

Under the Solicitors Code of Conduct, r. 2.01(1)(d) a solicitor must refuse to act if he knows or has

reasonable grounds to believe that the instructions are affected by duress or undue influence. The

solicitor should not take instructions, of final instructions, in the presence of a beneficiary; and

should, if any cause for suspicion arises, ask the testator whether any pressure has been applied to

make the Will in question.

C.4. Lack of testamentary intention

A Will is invalid if the testator does not have an animus testandi, i.e. a testamentary intention, at the

date of execution (Corbett v Bond Pearce [2001] 3 All ER 769). The solicitor will be negligent for

having failed to advised that the testator must, when signing the Will, have an intention to make a

Will having immediate effect (see B.3 above).

C.5. Costs of probate proceedings

C.5.1. Claim for costs of successful probate proceedings to set aside invalid Will

Assume the following scenario: T makes a Will (“Will 2”) revoking a previous Will (“Will 1”). Will 2 is

set aside in a probate claim brought by the beneficiaries of Will 1 on the grounds of lack of

testamentary capacity, want of knowledge and approval and/or undue influence. The beneficiaries

of Will 1 obtain an order for costs in the probate action, but it cannot be enforced (e.g. because the

defendants were publicly funded). The beneficiaries of the Will 1 then bring negligence proceedings

against the solicitor who prepared Will 2 alleging that the solicitor failed to take reasonable care to

ensure that Will 2 was not invalid.

The above was the position in Worby v Rosser [2000] PNLR 140 (see C.1.2 above). The claimants

were the beneficiaries of Will 1. They had incurred irrecoverable costs in probate proceedings to set

aside two later Wills. In effect, their claim was that they would not have had to incur those costs if

the solicitor had acted with reasonable competence by declining to accept instructions to prepare

the later Wills, given that the testator lacked testamentary capacity etc.

A similar claim was made in Sifri v Clough & Willis [2007] WTLR 1453 (see C.2 above). The claimants

were the beneficiaries of the last valid Will. They had incurred costs in probate proceedings to set

aside two later, invalid Wills. The claimant did not obtain an award of costs. She sought to recover

the costs of the probate proceedings from the solicitor who had prepared the later Will on the basis

that, but for his negligence, she would have received her entitlement undiminished by her costs in

the probate proceedings.

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C.5.2. Claim by beneficiaries - loss

It might be thought that the correct claimants are the residuary beneficiaries of Will 1. It is they who

have incurred the costs of the probate proceedings; and it is their entitlement under Will 1 which is

reduced by the costs of the unrecovered probate claim.

However, in Worby v Rosser [2000] PNLR 140 the Court of Appeal dismissed the claim by the

beneficiaries of the last valid Will, on the basis that any claim for the costs of the probate

proceedings ought to have been made by the personal representatives of the last valid Will.

Beneficiaries who have properly incurred costs in propounding the last true Will of a testator are

entitled to recover those costs out of the estate. The estate was, therefore, diminished by the

beneficiaries’ costs in the probate proceedings. The personal representatives were the persons who

should sued to recover any costs payable out of the estate.

In the New Zealand case of Public Trustee v Till [2002] WTLR 1169 a claim was brought by the

personal representatives of the last true Will to recover the beneficiaries’ costs of the probate action

to set aside the later invalid Wills. However, the Judge did not accept that the estate (as distinct

from the residuary beneficiaries) had incurred costs in connection with the litigation. The residuary

beneficiaries directed the personal representative to pay their legal costs out of residue. However,

the Judge said that the estate was never liable for those costs, and did not meet them. Nor was

there any court order requiring the estate to meet the costs, and the estate never accented any

liability to pay them. This appears to run contrary to the analysis in Worby v Rosser that beneficiaries

who had properly incurred costs in propounding the last true Will of a testator are entitled to

recover those costs out of the estate, with the result that it is the estate which has suffered loss,

even if there is no order that costs be paid out of the estate.

In Sifri v Clough & Willis [2007] WTLR 1453 the claim to recover the costs of the probate proceedings

was brought by the beneficiary of the last valid Will. The defendant solicitor accepted liability. No

point was taken that the claim ought to have been commenced by the personal representatives. The

claimant was, however, both the beneficiary and the putative personal representative of the last

valid Will: an order had been made for a grant of letters of administration to the claimant, albeit that

the grant had not been made.

C.5.3. Claim by beneficiaries - duty

In Knox v Till [2002] WTLR 1147 (see C.1.3 above) the New Zealand Court of Appeal dismissed a claim

to recover the costs of a probate action, by the residuary beneficiaries of the last true Will, on the

grounds that no duty was owed to the residuary beneficiaries, rather than that no loss had been

suffered by the beneficiaries. If the solicitor refused to act on the testator's instructions, there would

be a conflict between the interests of the testator and those of the claimant beneficiaries. The

degree of proximity in relationship was too distant; there was no assumption of responsibility by the

solicitors; the claimant beneficiaries placed no reliance upon the solicitors; and there were no policy

consideration is sufficient to justify the imposition of such a duty.

It is submitted that the reason for rejecting the beneficiaries’ claim in Knox v Till (no duty) is more

persuasive than that in Worby v Rosser (no loss). The claim by the beneficiaries of a former Will

against a solicitor who has negligently prepared a later Will is not a White v Jones claim at all. Any

claim by the beneficiaries of an earlier Will must be determined on normal negligence principles.

There is no assumption of responsibility by the solicitor to those beneficiaries. There is, therefore, no

duty owed to the beneficiaries in respect of the costs of the probate action.

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C.5.4. Claim by personal representatives

In Worby v Rosser [2000] PNLR 140 it was suggested by Counsel for the defendant solicitor that the

personal representatives of the last valid Will could not have a claim to recover the costs of the

probate action to set aside the subsequent invalid Wills. Chadwick L.J. did not, however, accept that

there were no circumstances in which such a claim would lie. It seemed to him that such a

submission went too far. But he did not find it necessary to decide what the relevant circumstances

might be. The Court of Appeal determined that the beneficiaries had no claim on the basis that “if

there is to be a remedy against the solicitor, it should be the estate’s remedy for the loss to the

estate”. The issue of whether the personal representatives would have a valid claim was, therefore,

left open.

However, in Corbett v Bond Pearce [2001] WTLR 419, at 430D-E, Sir Christopher Slade interpreted

the decision in Worby v Rosser as involving an acceptance that, in a case where a solicitor's

negligence in regard to the preparation or execution of a Will was the cause of expensive probate

proceedings, this could give rise to a claim for damages against the solicitors at the suit of the

testator's personal representatives for the benefit of the estate generally. On the particular facts of

Worby, the testator’s personal representatives would, he said, have had a good cause of action for

the loss suffered and, if they had pursued this claim, the solicitor would have been exposed to no

double liability.

There is no analysis in any of the above cases for the basis of a claim by the personal

representatives. However, it is suggested that the correct analysis is that a solicitor, who is asked to

prepare a Will, owes a duty to the testator in respect of any diminution in the value of his estate, e.g.

the costs of probate proceedings, caused by the solicitor negligently accepting instructions to

prepare an invalid Will. If the testator has died, when the facts giving rise to the claim come to light,

then the testator's cause of action will devolve on his personal representatives under s. 1 of the Law

Reform (Miscellaneous Provisions) Act 1934. Where a duty of care is owed to a person during that

person's lifetime, and that there is a breach of duty during that lifetime causing loss to the estate

which accrues on the death of the client, the estate may have a cause of action against the solicitor

for that loss (see Corbett v Bond Pearce [2001] PNLR 31, at paras. 16 and 17; Rind v Theodore

Goddard [2008] EWHC 459, at para. 41).

However, the costs of the probate action must be payable or recoverable out of the estate for the

personal representatives to bring a claim (see C.5.2 above).

C.5.5. Claim for costs of probate proceedings by personal representatives of earlier valid Will

where successful White v Jones claim by beneficiaries of later invalid Will

Where a Will is set aside due to the incapacity of the testator, or due to undue influence, it is most

unlikely that there will be a negligence claim by the beneficiaries of that Will against the solicitor

who prepared the invalid Will. If the solicitor had acted competently, the solicitor would have

declined to act, and the Will would not have been executed. The beneficiaries would not have

received any benefit. Alternatively, if, say, the solicitor failed to make reasonable inquiries as to the

testator’s capacity, and the Will is set aside on the grounds of incapacity, the beneficiaries would not

have received any benefit if the solicitor had made reasonable inquiries. Any negligence claim will be

by the personal representatives of the last valid Will to recover the costs of probate proceedings to

set aside the invalid Will (see C.5.4 above).

However, a problem arises if the Will, prepared by the solicitor, is set aside in circumstances where,

but for the solicitor’s negligence, the Will would have been effective to confer benefits on the

beneficiaries of the Will. In such a case there may be claims by: (a) the intended beneficiaries of the

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invalid Will and also (b) the personal representatives of the last true Will, leading to the possibility of

double liability.

This scenario arose in a series of related cases commencing with Corbett v Newey [1998] Ch 57. In

Corbett v Newey a Will made in September 1989 was set aside due to the lack of animus testandi by

the testatrix when she executed the Will (see B.3 above). An earlier Will, made in February 1989,

was admitted to probate. The costs of the probate action (£150,000) were ordered to be paid out of

the estate.

The beneficiaries of the September 1989 Will commenced proceedings against the defendant

solicitors to recover damages in respect of the failure to procure the valid execution of the

September 1989 Will in accordance with the testatrix's instructions. This claim (“the Disappointed

Beneficiaries’ claim”) was settled on the basis that the disappointed beneficiaries were paid the

amount of the net residuary estate undiminished by the costs of the probate action.

The personal representative of the February 1989 Will then brought a negligence claim against the

solicitors to recover the costs of the probate action, on the basis that the estate had been

diminished by those costs. At first instance the claim succeeded, but it was dismissed on appeal

(Corbett v Bond Pearce [2001] PNLR 31).

There were three justifications for this decision based on: (a) the scope of the duty; (b) double

liability; and (c) causation. As to the scope of the duty, this had to be determined by reference to the

kind of damage from which the solicitors had to take care to keep the testatrix harmless, having

regard to the terms of their retainer. The kind of damage from which she was to be kept harmless

was the loss which those who would become interested in her estate, whether as beneficiaries

under the September 1989 Will or as creditors, would suffer if effect were not given to her latest

testamentary intentions. It was not the loss which the various classes of beneficiaries named in the

February 1989 Will would suffer, because the testatrix had no wish or intention that the February

1989 Will should have any effect after the September 1989 Will came into force. As to double

liability, the defendant solicitors were under an indisputable liability to compensate the residuary

beneficiaries under the September 1989 Will for the full amount of the residuary estate,

undiminished by the costs of the probate action. They could not at the same time be under a liability

to the testatrix's personal representatives in respect of the same costs. If the claims of the

disappointed beneficiaries under the September 1989 Will, and of the personal representatives

under the February 1989 Will, had been consolidated in one action, the court would not have

awarded damages to the personal representatives, as this would have involved double liability and

double recovery. Thirdly, on causation, if the personal representatives’ claim succeeded, the

residuary beneficiaries of the February 1989 Will would be better off than if there had been no

breach of duty on the part of the defendant solicitors, because they would have received no part of

the residuary estate if the September 1989 Will had been effective.

It is submitted that this decision was correct. The residuary beneficiaries of the February 1989 Will

were never intended to benefit; if there had been no negligence, they would not even have received

their entitlements diminished by the costs of the probate action. The personal representatives of the

February 1989 Will were suing, in effect, on behalf of the residuary beneficiaries, and should not be

entitled to recover damages for a loss which the residuary beneficiaries would never have suffered if

there had been no negligence. The residuary beneficiaries’ loss was not within the scope of the

solicitors’ duty.

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C.5.6. Duty owed to personal representatives if estate insolvent due to costs of probate claim

There was, however, a curiosity to the judgment in Corbett v Bond Pearce [2001] PNLR 31. The

defendant solicitors had admitted liability. The Court of Appeal determined a preliminary issue that

the personal representative of the February 1989 Will was not entitled to recover damages equal to

the diminution of the value of the estate attributable to the cost payable in the probate action.

However, the Court of Appeal gave liberty to apply to the claimant on the basis that the estate

would have a claim to damages if, after deduction of the costs of the probate action, it was insolvent

and could not pay its creditors, pecuniary legatees and specific devisees. This makes little sense. If

the solicitors had not been negligent, the creditors, pecuniary legatees and specific devisees of the

February 1989 Will would not have received anything, any more than the residuary beneficiaries

would have done if the estate had been solvent. The explanation may be that the Court of Appeal

considered that the loss of the residuary beneficiaries (the cost of the probate proceedings) and the

loss of disappointed beneficiaries (the net estate undiminished by costs) represented, in substance,

the same monetary loss to the extent of those costs (see para. 32 of Slade L.J.’s judgment). In other

words, if the costs of the probate action were £x, the disappointed beneficiaries would receive their

full entitlement undiminished by £x, and the residuary beneficiaries of the probated Will would

receive the residue estate diminished by £x. However, if the value of the estate were insufficient to

pay all the creditors or legatees, in part by reason of the costs of the probate action, the shortfall

would not necessarily be £x. Therefore, the logic must be that any shortfall is, in substance, a distinct

loss from that suffered by the disappointed beneficiaries. However, if this is the logic, it is not made

explicit, and is in any event questionable. The fact that there may be two claims including the same

sum (£x) does not mean that the claims are the same; nor does it follow that if one claim is for £x,

and the other is for less than £x, the two claims must be distinct.

The matter was further complicated by the Court of Appeal making an order as to how damages

should be assessed, if the estate were insolvent, which in itself was confused and made little sense

(see Corbett v Bond Pearce [2006] WTLR 967, at paras. 54 and 58; C.5.6 below).

C.5.7. Causation/loss

The measure of damages will not necessarily be exactly equal to the amount of the irrecoverable

costs in the probate action. It is necessary to prove that any diminution in the estate attributable to

the costs of the probate action was caused by and was within the reasonable contemplation of the

solicitors in the event of their negligence (Public Trustee v Till [2002] WTLR 1169, at 1178H).

In Sifri v Clough & Willis [2007] WTLR 1453 the testator made a Will which was set aside for want of

knowledge and approval. The solicitor was negligent in not taking the testator’s instructions directly.

The testator’s daughter, who was the principal beneficiary under a previous valid Will obtained an

order setting aside the later Will in contested probate proceedings. She did not, however, obtain an

order for costs because (a) she had made unreasonable claims of undue influence and lack of

testamentary capacity, which were dismissed and (b) in regard to the successful claim of want of

knowledge and approval, the Judge considered that the full circumstances in which the Will was

executed would not necessarily have emerged except at trial. The Judge found that the defendant

solicitor should pay 40% of the claimant’s costs of the probate action, subject to a 10% reduction for

assessment on the standard basis. Presumably (it is not made explicit) the Judge considered that

40% of the costs were attributable to the successful want of knowledge and approval claim. If,

however, a costs order is obtained, but cannot be enforced due to the defendant’s impecuniosity,

the claimant should be entitled to recover 100% of the costs.

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No deduction was made for the contingency that, if the testator’s instructions had been taken

directly, he might have might have given instructions in the terms of the Wills that were set aside.

Indeed, the point does not seem to have been argued, presumably on the basis that that

contingency was remote.

The loss is not necessarily confined to the costs of the probate action. It can include any loss or

liability, the suffering or incurring of which can fairly and reasonably be said to been caused by the

probate action or any order made in that action, provided that such liabilities fall within the type of

damage from which the solicitors are under a duty to hold the estate harmless (Corbett v Pearce

[2006] WTLR 967, at para. 68 to 69). This will not include costs which the personal representative

has earlier in the negligence proceedings been ordered to pay to the defendant solicitors; nor any

costs of the personal representative in such proceedings payable to his own solicitors, which will be

recoverable as costs, if at all, rather than as damages (Corbett v Bond Pearce, paras. 77 to 80).

D. CLAIMS BY PERSONAL REPRESENTATIVES AND DOUBLE LIABILITY

D.1. Claims by personal representatives

D.1.1. Requirement of loss to the estate

There are a number of areas in which a claim by a personal representative is appropriate, in

conjunction with, or as distinct from, a claim by a disappointed beneficiary. In a White v Jones case

there is no question of any claim by the personal representatives of the testator’s estate. The estate

has suffered no loss; the effect of the negligence is that the estate passes to different beneficiaries

from those whom the testator intended to benefit. Because neither the client, nor his personal

representatives, can sue, there is a lacuna which justifies imposing a duty to the beneficiaries who

have suffered the loss.

However, in some circumstances, the effect of the solicitor’s negligence may be that the estate is

deprived of an asset that would otherwise form part of the estate on the death of the client. In those

circumstances, the claim for damages for loss to the estate would normally be brought by the

personal representatives of the estate.

D.1.2. Loss to estate during administration

In Chappel v Somers & Blake [2003] 3 All ER 1076 solicitors had negligently failed to take any steps to

obtain probate and then to get in and administer the assets of the estate for a period of 5 years. This

meant that no income was derived from two properties which were unlet during that period. Those

properties formed part of the residuary estate. The executrix brought an action against the solicitors

alleging breach of contractual and tortious duties owed by them to her. The solicitors applied to

strike out the action contending that any alleged loss had been suffered by the residuary beneficiary,

to whom the properties had been devised, and not by the executrix in her capacity as such.

Neuberger J held that the executrix represented the interest of the deceased owner of the property

and was, therefore, the person entitled to recover damages. During the period of administration she

was the person entitled to income from the properties comprised in the estate. Those properties did

not, during the period of administration, vest in the residuary beneficiary. The executrix was liable to

account to the beneficiary for any damages received. The executrix had herself suffered a loss

because she has lost the income that she would have received if probate had been obtained and the

assets are administered promptly. Therefore, the proper claimant was the executrix, not the

residuary beneficiary.

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Indeed, there may be no duty owed by solicitors, acting in the administration of the estate, to the

beneficiaries of the estate, in respect of the solicitors’ conduct of the administration (see Cancer

Research v Ernest Brown [1998] PNLR 592, at B.9.3 above, where Harman J said that to assert that

the solicitors came under a direct duty of their own to the legatees of a Will would put them under a

duty which was wholly outside any previous decision. The solicitors owed their duties to the

executor, their client).

D.1.3. Costs of personal representatives in probate action to set aside later invalid Will

This type of claim is dealt with at C.2 above. Clearly, such a claim is distinct from a classic White v

Jones claim. The claim is not by the disappointed beneficiaries of a Will who, due to the solicitor’s

negligence, have not received the benefits the testator intended. The claim is by the personal

representatives of an earlier Will (in respect of which the solicitor may not have been retained, or in

respect of which there is no allegation of negligence) for damages arising out of the unreasonable

failure by the solicitor to decline to act in the preparation of the later Will, leading to costs being

incurred in probate proceedings to set aside the later Will. The point is that those costs will be

payable out of the estate, with the result that the proper claimants are the personal representatives

(see C5.2 and C.5.4 above).

D.1.4. Breach of contract to client causing loss of value to estate on death

It is possible for a cause of action in contract, arising during the lifetime of the client, to devolve on

his personal representatives on death. Section 1(1) of the Law Reform (Miscellaneous Provisions) Act

1934 provides that on the death of any person ... all causes of action subsisting against or vested in

him shall survive against, or as the case may be, for the benefit of, his estate. Since a cause of action

in contract arises even where no loss has been suffered, that cause of action can devolve on the

deceased’s personal representatives.

In Otter v Church Adams Tatham & Co [1953] 1 Ch 280 Mr Otter had an entailed interest in settled

property. It was open to him during his lifetime to bar the entail so that he would become absolutely

entitled to the settled property. He was negligently advised by the defendant solicitors that he was

already the absolute owner of the settled property, and that there was no need to bar the entail. He

died without having barred the entail, with the result that the settled property did not form part of

his estate. The settled property passed to his uncle as reversioner, so that his estate suffered loss. It

was accepted that a contractual duty was owed to Mr Otter during his lifetime, and that an action in

contract is capable of surviving death. It was also accepted that, had Mr Otter sued in his lifetime, he

would only have recovered nominal damages (because he could have mitigated his loss at little or no

expense by executing a disentailing deed). The court nonetheless held that his personal

representatives could recover substantial damages measured “at the time that the damage

accrues”, i.e. on death. A cause of action arose during his lifetime because he had been deprived of

the opportunity of increasing his estate by executing a disentailing deed. That remained the position

on death. That cause of action vested in his personal representatives on death. The loss, which was

to be measured on death, was substantial, and could be recovered by the personal representatives.

The correctness of the decision was accepted in Corbett v Bond Pearce [2001] 3 All ER 769, at paras.

[16] and [17]. Sir Christopher Slade commented that no decision has been brought to the court’s

attention in which the correctness of the decision in Otter had been questioned. In fact, Otter had

been described as a “strange case” in Sykes v Midland Bank Executor and Trustee Co Ltd [1971] 1 QB

113, 129-130, where Salmon L.J. commented that it was a surprising conclusion that Mr Otter’s

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estate could recover substantial damages, when Mr Otter himself had suffered only nominal

damages.

In McLellan v Fletcher [1987] NLJ Rep 593 a solicitor was held to be liable to the deceased’s estate

for failing to ensure that a life policy securing a mortgage loan was in force on completion of the

deceased’s purchase of the property. The deceased could never have received the proceeds of the

policy during lifetime. However, McLellan was not followed by Lynne v Gordon Doctors and Walton

(1991) 135 Jo LB 29 on the grounds that the deceased himself had suffered no loss for which the

estate could claim. In conclusion, it is not certain whether Otter represents good law.

However, the correct analysis may be that personal representatives can recover substantial damages

where the deceased did suffer some substantial, as opposed to nominal, loss during his lifetime.

Otter can be so explained. Mr Otter had, in consequence of the solicitor’s negligence, lost the

opportunity to take a step which would have increased the value of his assets during his lifetime. If

he had been advised to disentail during his lifetime, he could have alienated the settled property for

value; without disentailment he could not. He had suffered a substantial loss during his lifetime,

albeit one that could have been mitigated if he had been aware of the solicitor’s negligence.

D.1.5. Breach of duty of care to testator with regard to lifetime transaction causing loss in value

of estate after death

It is not only contractual claims, but also claims in tort, giving rise to loss to the estate, that may be

enforced by the personal representatives (see Rind v Theodore Goddard [2008] PNLR 24, at para.

41). Clarke v Bruce Lance & Co [1988] 1 All ER 364 (see E.10 below) is a case where solicitors had

advised a client in respect of a lifetime transaction (the grant of an option exercisable on the client’s

death) causing a diminution in the value of the entitlement of the claimant (who was a beneficiary

under the client’s Will) following the death of the client. The claim was struck out. One of the

grounds was that - if the solicitors were negligent in failing to advise the client that the grant of the

option was an improvident act - then he during his lifetime had, and his personal representatives

after his death also had, a cause of action against the solicitors. This is consistent with the general

principle that the personal representatives of an estate are the proper claimants where the alleged

negligence has caused loss to the estate.

D.1.6. Loss of severable share in joint property

In Carr-Glynn v Frearsons [1999] Ch 326 (see B.6.1 above and E.9 below) the solicitors failed to

advise the testatrix to sever a joint tenancy in a property, with the result that a half share therein did

not form part of her estate on death passing under her Will. Instead, her beneficial interest passed

by survivorship to the other joint tenant, whom the testatrix did not want to benefit following her

death. The negligence lay in failing to ensure that an asset fell into the estate by advising that a

notice of severance be served promptly. Prima facie, therefore, there was a loss suffered by the

estate. However, the Court of Appeal allowed a claim by the intended specific devisee of the

severable half share in a property on the basis that, if the damages were paid to the personal

representatives, they would form part of the residuary estate distributable to the residuary

beneficiaries, and not to the claimant as the testatrix intended. Presumably, therefore, if the

testatrix had intended to sever the joint tenancy, and then to leave her half share to the claimant as

part of a residuary gift, the personal representatives would have been the correct claimants.

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D.2. Double liability

D.2.1. Introduction

As has been seen in D.1 above, there are circumstances in which a claim can be made by the

personal representatives of the estate. Often it is possible, on the same facts, to posit a claim by

beneficiaries. This gives rise to the possibility of double recovery or double liability, which the courts

are keen to avoid. The defendant solicitors should not have to pay damages twice over for the same

loss; nor, having paid the personal representatives, should they be exposed to a further claim by the

beneficiaries, or vice versa. Furthermore, it was part of the ratio of White v Jones that, if the

beneficiaries were not given a remedy, there would be no other person who could sue the negligent

solicitor. Neither the testator, nor his personal representatives, can sue, having suffered no loss, and

so cannot claim any more than nominal damages. That is the “lacuna” which needs to be filled by

permitting the beneficiaries to claim. This has led the court to conclude, in some of the cases, that if

there are potential claims by both the personal representatives and by the beneficiaries, there is no

lacuna, and the personal representatives, not the beneficiaries, are the correct claimants.

D.2.2. No claim by beneficiaries where personal representatives have claim

In Worby v Rosser [2000] PNLR 140 (see C.5.4 above) the Court of Appeal determined that the

personal representatives of the last valid Will had a cause of action to recover the costs of

beneficiaries, payable out of the estate, incurred in the course of a successful probate claim to set

aside a later Will. The claim had, in fact, been made by the beneficiaries. The claim was dismissed in

part because a White v Jones remedy is provided where there is a breach of duty by the solicitor to

the testator in circumstances in which the persons who have suffered a loss from that breach will

have no recourse unless they can sue in their own right. There was, however, no lacuna to be filled

because the personal representatives could sue in respect of the estate’s loss, including the costs to

which the beneficiary was entitled out of the estate.

This reasoning is, arguably, suspect in that it was unnecessary to rely on the principle that there was

no lacuna in order to deny the beneficiary’s claim. The claim in Worby v Rosser was by the

beneficiaries of a former Will against a solicitor who has prepared a later Will pursuant to the

testator’s instructions, not a claim by the disappointed beneficiaries of a Will who have not obtained

the benefits that the testator intended. It is not a question of the beneficiaries and the personal

representatives of the earlier Will both having potential claims against the solicitor and of the

personal representatives’ claim trumping that of the beneficiaries there being no “lacuna”. On

normal negligence principles, no duty of care is owed by the solicitor to the beneficiaries of a former

Will whereas the personal representatives have a solid claim based on the diminution in the value of

the estate.

In Chappel v Somers & Blake [2003] 3 All ER 1076 (see B.11 and D.1.2 above) the court considered

that the claim was properly brought by the personal representative, and not by the residuary

beneficiary. There was an application to strike out the claim, which had been brought by the

executrix of the estate for loss of income from estate properties during the period of administration

consequent upon the solicitors doing nothing during that period. It was contended that the

residuary devisee of the properties was the proper claimant on the basis that, if the estate had been

wound up earlier, the devisee, not the personal representative, would have received the income.

This argument was rejected in part because there was no lacuna necessitating the grant of a remedy

to the beneficiary. There was a basis upon which it could fairly be said that the executrix could

maintain a claim for the loss that had been suffered, in that the loss of income was suffered during

the period when the properties were vested in the executrix. The executrix should, therefore, be

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entitled to pursue the claim. In addition, there was no prospect of double recovery. Any damages

recovered by the executrix would be paid to the residuary beneficiary. As the properties had not

been given to a specific legatee, there was no other person who could sue for the same damage.

Given that any damages would ultimately come to the beneficiary, irrespective of who had the right

to sue, the question of whether it was executrix or the beneficiary who could bring the proceedings

was of no great significance. The decision is consistent with the general rule that it is personal

representatives, not beneficiaries, who should bring claims on behalf of the estate (Williams v

Holland [1965] 1 WLR 739, at 734-5).

D.2.2.1. Parties

In conclusion, where loss has been suffered which has the effect of diminishing the value of the

estate in the hands of the personal representatives, and ultimately in the hands of the residuary

beneficiaries, the personal representatives are the proper claimants.

In Chappel v Somers & Blake Neuberger J did, however, order that the residuary beneficiary be

joined as a party to the action in order to avoid any risk of double recovery. It may, therefore, be

sensible for the personal representatives and residuary beneficiaries both to be claimants, or for the

residuary beneficiaries to be joined as defendants to the claim (which they would not contest).

There may be a problem if the executor does not wish to bring the claim on behalf of the residuary

beneficiary, having distributed the residuary estate in which the executor has no beneficial interest.

The executor would no doubt want an indemnity in respect of the costs of the proceedings. If still

unwilling, the beneficiaries could apply to the court for an order directing the executor to bring

proceedings, with the benefit of an indemnity, and to account to the beneficiaries in respect of the

proceeds of the action. Alternatively, the beneficiaries might be entitled to bring derivative

proceedings on behalf of the estate, joining the executor as a defendant on the basis that the

executor has declined to bring proceedings (see H.5 below).

D.2.3. Claim by specific legatee where personal representatives have no claim for substantial

damages

Where the effect of the negligence is that an asset does not, as it should have done, fall into the

estate, prima facie the personal representatives should be the claimants. However, it may be that

the testator instructed the solicitor to include a specific gift of that asset to X. If the personal

representatives recovered damages for the loss of the asset, they would hold those damages on

trust for the residuary beneficiaries whom the testator did not intend to benefit. The specific legatee

would receive no benefit from a successful claim by the personal representatives.

This, in essence, was the position in Carr-Glynn v Frearsons [1999] Ch 326 (see B.6.1 above and E.9

below). In consequence of the solicitor’s negligence the testatrix’s interest in a joint property was

not severed. The testatrix’s interest passed on her death to her nephew, and not under her Will

which included a specific gift of a half share in the property to the testatrix’s niece. The niece sued

for damages.

The Court of Appeal determined that the claim was properly brought by the niece. If she was not

given a remedy, there would be a lacuna. She would be the only person who had suffered a loss, but

would have no claim. The personal representatives would have a valid claim on behalf of the

residuary beneficiaries, but the residuary beneficiaries would have suffered no loss. Following White

Jones it was, therefore, appropriate to fashion a remedy to avoid what would otherwise be an

37

injustice. This illustrates the general principle that beneficiaries can only bring a claim for loss

suffered by them if the personal representatives cannot claim substantial damages.

The Court of Appeal nonetheless considered that, even though the specific legatee was the proper

claimant, the personal representatives could also have a claim, giving rise to the risk of double

liability. It was not the case that the only duty which was owed was to the specific legatee. There

was a duty owed to the testatrix and her estate, and a duty owed to the specific legatee. The duty

owed to the testatrix and her estate was to save them harmless from loss by those interested in the

estate (whether as creditors or as beneficiaries) if effect was not given to the testatrix’s

testamentary intentions. The duty owed to the specific legatee was a duty to take care to ensure

that effect was given to the testatrix's testamentary intentions by ensuring that the specific legatee

did not lose the interest which she would have had as a beneficiary in the estate comprising the

severable half share in the joint property.

These two duties were described as being "complementary", as opposed to being inconsistent. The

rationale was as follows. The duty owed to the specific legatee was not a duty to take care to ensure

that the specific legatee received her legacy. The duty was to give effect to the testator’s

testamentary intentions. If effect had been given to her testamentary intentions, a half share in the

joint property would have formed part of the testatrix’s estate passing under her Will. The Will

would have included a specific gift to the niece, subject to the payment of estate liabilities. The loss

from which the niece was to be saved harmless was the loss of the interest that she would have

received as a beneficiary of the estate comprising the half share.

On that basis, the personal representatives would have a claim to the extent that liabilities need to

be paid out of the specific gift in the ordinary course of administration. (In fact, they would, in the

absence of any intention to the contrary, have been payable in priority out of residue). If there is no

need to resort to the share to meet estate liabilities, and the property subject to the specific gift is

distributable to the specific legatee, the estate has suffered no loss. It was not suggested that there

were any persons interested in the estate, other than the specific legatee, who had suffered loss by

reason of the solicitor's breach of duty. Therefore, the action by the specific legatee was properly

constituted.

It is submitted that the decision makes internal sense. However, it is arguable that the only person

that the testatrix intended to benefit was the specific legatee (the niece). Although this was to be

through the medium of the estate, following a severance of the joint tenancy, the testatrix had no

intention that any other persons, such as creditors, should benefit from her severable share in the

joint property. Therefore, following the death of the testatrix, the only duty owed was to the specific

legatee/niece. There was no competing or even complementary duty owed to the testatrix and her

personal representatives for the benefit of any persons other than the niece. Therefore, the proper

claimant was the niece.

To complicate matters further, there is another possible, inconsistent analysis. In Chappel v Somers

& Blake [2003] 3 All ER 1076 Neuberger J considered that a personal representative, who has

recovered damages in respect of loss of income from property which is the subject of a specific gift,

should account to the specific legatee for the damages, not to the residuary beneficiaries (para.

[31]). On that basis, the personal representative could bring the proceedings.

D.2.3.1. Parties

In any event, the ratio of Clarke is that if the personal representatives have no effective remedy,

because any damages would be payable to the wrong persons, i.e. the residuary beneficiaries, the

specific legatee should be allowed to sue. Chadwick L.J. did, however, say that in any case where

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there are, or may be, persons interested in the estate (other than the specific legatee) who have

suffered loss by reason of the solicitors’ breach of duty to the testator, it would be appropriate for

both the personal representatives and the specific legatee to be parties to the action, if necessary by

the personal representatives being joined as defendants.

It is suggested that in any case where the specific legatee wishes to bring an action for damages, the

personal representatives should be joined as co-claimants, or as defendants.

D.2.4. No claim by personal representatives where good competing claim by beneficiaries

In Corbett v Bond Pearce [2001] PNLR 31 the claim of personal representatives of the last true Will

to recover the costs of probate proceedings, for the benefit of their residuary beneficiaries, was

dismissed, where there had already been a successful claim by the beneficiaries of a later invalid Will

for the benefits that they would have received under that Will if the solicitors had not been

negligent. For an analysis of the decision, see C.5.5 above.

One of the grounds for dismissing the claim was that if the solicitors were liable to both the

disappointed beneficiaries under the later, invalid Will, and also to the personal representatives

under the earlier Will, there would be double liability. There was a indisputable White v Jones claim

by the disappointed beneficiaries of the later Will. There was, therefore, no scope for another claim

for, in substance, the same loss, by the personal representatives of the earlier valid Will.

This might seem to turn White v Jones on its head in giving primacy to the claim by the beneficiaries

over the claim by the personal representatives. However, that conclusion involves a

misunderstanding of the true position. There was a White v Jones claim by the beneficiaries of the

later Will (who would have benefited thereunder but for the solicitors’ negligence). The

disappointed beneficiaries were entitled to claim damages because they had suffered loss, in

circumstances where neither the testatrix nor her personal representatives could make a claim,

there being no loss to the estate by reason of the beneficiaries not receiving the intended benefits.

The disappointed beneficiaries’ claim was, therefore, valid because a claim by the personal

representatives would not compensate them for their loss.

The personal representatives under the last valid Will then brought proceedings to recover the costs

of the probate action. The better analysis is that they had no claim at all. The testator never

intended to benefit the residuary beneficiaries of the earlier Will after she purported to execute the

later Will. If the solicitors had not been negligent, the residuary beneficiaries of the earlier Will

would not have received anything under that Will. The solicitors had not assumed a duty to save the

residuary beneficiaries of the earlier Will harmless from any loss. Therefore, there was no question

of there being two valid claims, or of the claim by the disappointed beneficiaries trumping that of

the personal representatives. Nor was the claim by the personal representatives of the earlier Will a

White v Jones claim: the solicitor was not negligent in respect of the earlier Will. The personal

representatives of the earlier Will simply had no claim.

It is true that Slade L.J. did state, at para. 32 of his Judgment, that there was a duty owed by the

defendant solicitors (in contract) to the testatrix, and (in tort) to the beneficiaries named in the later,

invalid Will. Following Carr-Glynn v Frearsons, he regarded those duties as being complementary,

with the result that the payment of compensation to the disappointed beneficiaries pursuant to “an

indisputable liability” extinguished the claim of the personal representatives on behalf of the

beneficiaries of the earlier Will. This does look as if he regarded both claims as being valid, but that

of the disappointed beneficiaries as trumping that of the personal representatives. However, the

better analysis is that there was an indisputable liability to the disappointed beneficiaries, and no

39

liability at all to the personal representatives on behalf of the residuary beneficiaries of the earlier

Will.

It is also a fallacy that there were two duties: (a) a duty in contract to the testatrix, and on her death

to the personal representatives of her last true Will, to ensure that the residuary beneficiaries of her

last true Will received their full entitlement undiminished by the costs of a probate action; and (b) a

duty in tort to the disappointed beneficiaries of the later Will to ensure that they received the

benefits under the Will to which the testatrix intended to give effect. There was certainly a duty

under (b). However, as far as (a) is concerned, no loss was suffered by the testatrix in respect of the

costs of the probate action arising after her death; and her personal representatives cannot recover

the costs of the probate action, even though her estate is diminished thereby, because their claim

must be for the benefit of the residuary beneficiaries of the earlier Will, who are not within the

scope of the solicitors’ duty of care.

E. WHETHER LIABILITY LIMITED TO WILLS

E.1. White v Jones

The classic White v Jones scenario arises where a solicitor is instructed to prepare a Will conferring a

benefit on X, but fails to do so effectively or at all. The liability arises out of the breach of duty to the

testator to exercise competence in giving effect to the testator’s instructions to confer a

testamentary benefit on X. The relevant retainer is, therefore, to prepare a Will or Codicil. The

judgments in White v Jones indicate that their Lordships considered that liability was confined to

cases where a solicitor negligently drafted or failed to draft a Will, and the testator had died, with

the result that the testator or his estate has no effective remedy.

On that basis, Lord Goff considered (White v Jones [1995] 2 AC 207, at 265) that, if a solicitor was

responsible for misdirecting a lifetime gift to the wrong donee, the client could either recover the

gift from the recipient or, if he could not, he could sue the solicitor for damages. If the donor fails to

make an effective gift, and then changes his mind and decides not to perfect the gift, the intended

donee cannot sue the solicitor because the donor is able to do what he wishes to put the matter

right (at 262).

Lord Browne-Wilkinson considered that the position was different in the case of a Will (276). First,

there can be no conflict of interest between the testator and the intended beneficiary. Both would

want the beneficiary to receive the intended testamentary gift and, if that is not possible, to receive

compensation. It would not be a case where the donor decides not to perfect an imperfect gift.

Second, in the case of a negligently drawn Will (which does not take effect until after death) the

negligence will often remain hidden until it takes effect on the death of the testator, i.e. at the very

point in time when normally the error will be incapable of remedy. By contrast, in the case of a

lifetime transaction, the transaction takes immediate effect (or not, as the case may be) and the

consequences of the negligence are immediately apparent. However, these comments were obiter.

E.2 Extensions of White v Jones

There are cases in which the courts have extended, or purported to extend, a White v Jones liability

to persons other than the solicitor’s client in negligence in connection with a lifetime transaction

which has caused loss to persons whom the client wished to benefit (see A.1 above). Some of those

cases do not even involve negligence in the preparation of a Will or a duty owed to the beneficiaries

of such a Will. However, in most of the cases, there is at least a contract between a client and a

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solicitor or professional to prepare a document, or to give advice, for the purposes of the client

conferring a benefit on an indentified third party, with whom there is no contractual relationship.

That benefit may be one which will only be conferred on the death of the client, or it may be an

immediate benefit. In any event, the negligence causes loss to the third party, who does not receive

the expected benefit. The client has suffered no loss and/or there is some other reason why he

cannot remedy the position if necessary by suing the solicitor. The third party, who has suffered

substantial loss, is, therefore, given a remedy in tort to claim damages from the solicitor or other

professional.

E.3. Imperfect gifts

In Hemmens v Wilson Browne [1995] Ch 223 a solicitor was instructed by a client to draft a

document giving the claimant an immediate enforceable right to call on him to pay her the sum of

£110,000. The executed document failed to confer any enforceable rights on the claimant. When the

claimant sought to compel the client to make a payment he refused.

The claim was dismissed on the basis that it was not fair, just and reasonable to impose a duty on

the solicitor given that:

(1) The donor was still alive and could put the matter right. No irremediable situation had

occurred which had put it beyond his power to rectify the situation. He was not dead,

insane, insolvent, bankrupt, no third parties had acquired any interest in the subject

matter of the gift, and tax had not become payable which would not have been payable

if the document been appropriately drafted. In short, the only reason why the situation

had not been rectified was that the donor had changed his mind.

(2) It was not a case in which a negligent solicitor would go scot-free if the law provides no

remedy to the claimant. The donor could treat the contract as repudiated and refuse to

pay the bill. If he has already paid, he can retain another solicitor to draft an

appropriate document and recover the additional charges as damages for breach of

contract. The donor had not chosen to go to another solicitor to put the matter right,

although it was within his power to do so.

(3) The solicitor had not assumed a responsibility for the claimant’s interests as he had told

her to consult her own solicitors if she had any doubt about the effectiveness of the

transaction.

The case was decided after White v Jones in the Court of Appeal, but before the House of Lords’

decision. However, it is consistent with obiter comments made by their Lordships (see E.1 above).

One possible justification of the decision in Hemmens is that the client had waived the breach of

duty. If there is no duty to the client, there can be no duty to the person whom the client wishes to

benefit (see A.4 above). There is also no policy justification for the imposition of a duty to the

intended donee where the donor has changed his mind and, therefore, no impulse to do practical

justice by giving a remedy to the donee. The fact that the donor also has a remedy is, however, less

convincing as a reason for refusing relief. If the donor does not wish to proceed with the gift, he will

not be pursuing any remedy against the solicitor. It is irrelevant that, if he did wish to proceed with

the gift (which he does not) he would have a remedy.

It is not clear what the position would be if the donor could not perfect the gift because, for

instance, he has died or become incapacitated. In White v Jones [1995] 2 AC 207 Lord Goff did say

(at 262C) that there was some authority that, exceptionally, equity would perfect an imperfect gift if

the donor has died or become incapacitated: see Lister v Hodgson (1867) LR 4 Eq 30, 34-5. If the gift

was ineffective due to defective drafting of the instrument of transfer, the court could rectify the

instrument after the death of the donor if satisfied that this is necessary to give effect to the donor’s

intentions (see Van der Linde v Van der Linde [1947] Ch 306). If, however, the donor instructed the

41

solicitor to prepare documentation giving effect to the gift, the solicitor delayed, and the donor then

died, the intended donee might, perhaps, have a claim against the solicitor for failure to procure an

effective gift in reasonable time before the death of the donor.

E.4. Misdirected gifts

In Hemmens v Wilson Browne [1995] Ch 223 Judge Moseley Q.C. said: “I can well understand that if

a settlor, acting on the advice of his solicitor, executes an irrevocable deed of settlement, conferring

benefits on X instead of, as intended, Y, the solicitor may owe a duty of care not only to the settlor,

but also to Y. In such circumstances, leaving aside the possibility of rectification, it will be beyond the

power of the settlor, though still alive, to put matters right, and Y will be able to prove an

identifiable loss.”

However, in White v Jones [1995] 2 AC 207, Lord Goff had stated (at 265) that, if a solicitor was

responsible for misdirecting a lifetime gift to the wrong donee, the client could either recover the

gift from the recipient or, if he could not, he could sue the solicitor for damages. However, it is

possible that the client could not recover the gift, and also that he might not be entitled to recover

substantial damages on the basis that he has suffered no loss. The intended donee might have a

remedy against the solicitors in those circumstances.

E.5 Gifts to trust which fail to confer the intended benefit

In Hemmens v Wilson Browne [1995] Ch 223 Judge Moseley Q.C. said that he could well understand

that a duty of care might be owed by a solicitor to an employee for whose benefit that solicitor is

retained by the employer to draft an effective tax avoidance scheme. If the scheme is ineffective, the

tax will be payable and it will be beyond the ability of the employer, even if still alive, to put matters

right.

Hughes v Richards [2004] PNLR 706 involved a similar problem in that an accountant had negligently

advised that an offshore trust should be set up for the benefit of the clients’ children. The vehicle

chosen proved not to be tax effective. A claim to strike out a claim in negligence by the children

failed. The issue was described as follows: “When A contracts with B to perform professional

services in connection with the establishment of a trust for the benefit of C and B is negligent in the

performance of those services with the result that C receives no benefit from the trust, does A or C

have a remedy in tort against B?”.

Mr and Mrs Richards wished to set up a trust with £100,000, before the deduction of tax, for the

benefit of their children. The defendant accountant advised them to set up a series of complex

offshore trust arrangements in order to avoid tax. However, no tax was saved, and the fund was

used up in fees, charges and tax liabilities, with the result that no sums were paid out of the trust for

the benefit of the children. A claim was brought against the accountant in the name of the children

as beneficiaries of the trust alleging that the accountant had assumed a responsibility to the

beneficiaries to advise as to a more suitable investment and also to monitor the performance of the

investment. The defendant applied to strike out the claim on the basis that he owed the

beneficiaries no duty of care.

It was argued, on behalf of the defendant, that it was the parents who had suffered the relevant

loss. They had provided the relevant funds which had been wasted due to the negligence of the

solicitors. They, therefore, had a claim in damages, which meant that the children should not have a

claim, since there was no lacuna. It was argued, on behalf of the children, as their primary case, that

42

it was the children who had suffered the relevant loss. The children had not received the benefit that

the parents intended. Their loss was the value of the fund which, if properly invested, would have

been held in trust. There was a tactical advantage in claiming that the children had the better claim.

There was an alternative claim by the parents, but it was subject to a possible limitation defence,

and the children were legally aided, whereas the parents were not.

The Judge at first instance refused to strike out the claim, and the Court of Appeal decided that he

has not erred in exercising his discretion. Furthermore, it was not appropriate to strike out a claim

unless certain that it was bound to fail. The issue of whether a professional could owe a duty of care

to a person other than his client was an uncertain and developing area of law in which a strike out

was inappropriate.

Gibson L.J. accepted that there was a strongly arguable case that the parents and not the children

were owed a duty of care. However, he would not go so far as to say that it was certain that the

children’s claim would fail. He referred to the obiter comments of their Lordships in White v Jones

(see E.1 above) to the effect that there could be no liability to persons other than the client in

respect of lifetime gifts. However, it was not obvious that those comments covered an example

corresponding to the circumstances of the case, where the gift was neither imperfect nor

misdirected, nor were the consequences immediately apparent, but only emerged several years

after the scheme was implemented. Nor were the views tested by consideration of what would be

the position if the donor dies or became bankrupt or was denied the remedy by reason of a

limitation defence.

It is submitted that a duty of care was owed to the children, who had suffered the relevant loss. The

parents’ sole purpose was to benefit the children. They never intended to retain any benefit for

themselves. But for the accountant’s negligence, the children would have benefited from a suitable

investment in which the parents would have had no interest. To that extent, the parents had not

suffered any loss. The case was not one of an imperfect gift where the donor changes his mind and

decides not to perfect the gift. The parents had perfected the gift, and it remained their intention to

benefit their children. The complaint was that the gift was of no value to the children. There was no

conflict of interest between the parents and their children. There was close proximity between the

accountant and the children who, to the accountant’s knowledge, were not being independently

advised. Not only was it foreseeable that the children would suffer loss from his negligent advice,

but there was, in effect, an assumption of responsibility to the children on the basis that the

accountant was giving advice for the benefit of the whole family. There was also no question of an

indeterminate liability to an indeterminate class.

E.6. Contractual claim by family members

In Richards v Hughes [2004] PNLR 706 Jacob L.J. considered that there was an alternative, arguable,

ground of liability. The defendant accountant should be regarded as acting not only for the parents,

but also for the children. There was, arguably, a contractual duty owed to the children.

One possible analysis is that where parents seek financial advice for the benefit of their children, the

children should be entitled to claim under the contract, pursuant to the Contracts (Rights of Third

Parties) Act 1999, on the basis that the contract purports to benefit the children.

However, in more commercial circumstances, where, for instance, a solicitor has been instructed by

a borrower to confer an effective security on his lender, an implied contract of retainer has not

generally been recognised. In Dean v Allen & Watts [2001] EWCA Civ 758 the test adopted was

whether an objective consideration of all the circumstances make it so clear that a retainer arises

that the solicitor himself ought to have appreciated it. It is a material factor, but not conclusive

43

against the existence of a retainer, that the claimant is not liable for the solicitor’s fees and did not

directly instruct the solicitors. The fact that there has been a retainer in the past may point towards

a continuing retainer (see Hines v Willans [2002] WTLR 299), particularly if the solicitor has not

advised the claimant to seek independent advice. In Dean the solicitor’s instructions came from the

borrower, not the lender/claimant; the solicitor gave no express advice to the claimant about the

security; and, on one of the relevant transactions, the solicitor had made it clear that he could not

act for the claimant. In Searles v Cann & Hallett [1999] PNLR 494 no retainer was found to exist

between the solicitor and the lender, with regard to security being provided by the borrower, either

expressly, orally, or by conduct. There was nothing in the previous course of dealings, or in the

course of the relevant transaction, which clearly pointed to the existence of a contractual

relationship.

E.7. Defective pension advice affecting dependents’ entitlement after death of client

In Gorham v BT [2000] 1 WLR 2129 Mr Gorham sought advice from Standard Life in respect of

pension and life insurance cover, making it clear that his first priority was to provide for his wife and

children in the event that he predeceased them. Standard Life sold him a personal pension plan,

negligently failing to advise him that his employer’s (BT’s) occupational pension scheme was

superior. Mr Gorham died. Mrs Gorham brought an action against the insurance company, on her

own behalf and that of her children, for damages for the loss of pension rights under the employer’s

scheme, including a lump sum death in service benefit. She alleged that the insurance company

owed a duty of care to herself and her children as potential beneficiaries of the pension and life

insurance arrangements.

The Court of Appeal held that a duty of care was owed to Mrs Gorham and the children. The position

of an investor who goes to a financial adviser seeking investment or pensions advice in relation to

make provision for his family after his death is analogous to a White v Jones case where a person

goes to a solicitor seeking advice in relation to making provision by Will for his family after his death.

The adviser’s assumption of responsibility towards the investor extends to the intended beneficiary

who (as the financial adviser can reasonably foresee) may, as a result of the adviser’s negligence, be

deprived of an intended benefit and who, in a very real sense, is dependent upon the dealings

between the adviser and the person seeking advice to safeguard his position. It was fundamental to

the giving and receiving of advice upon a scheme for pension provision and life insurance that the

interests of the customer’s dependents will arise for consideration. Practical justice required that

disappointed beneficiaries should have a remedy against an insurance company in such

circumstances. Advice was expected and was directed not only to the interests of Mr Gorham but to

the interests of his dependents should he predecease them.

There was no conflict between the interests of Mr Gorham and of his family. The duty was not one

to ensure that his family were properly provided for (which might conflict with his wish to do the

best he could for himself by way of pension during his lifetime). It was a duty to the family not to

give negligent advice to Mr Gorham which adversely affected their interests as he intended them to

be.

As it happened, the claim failed on causation. Mr Gorham was, after the initial advice, correctly

informed that BT’s scheme was better, but he failed to make any inquiries with BT as to whether he

was covered by their scheme.

In any event, the case does confirm that there may be a White v Jones liability in respect of negligent

advice concerning a lifetime transaction which is intended to confer a benefit on identified persons

after the death of the client. Pill L.J. distinguished the case from one where a donor decides not to

44

perfect an imperfect gift where the chain of causation is broken because the donor had the

opportunity to perfect the gift but chose not to do so. Mr Gorham had died, and neither he nor his

estate had suffered any loss. His dependents had suffered a loss, and practical justice required that

they should be given a remedy.

E.8. Advice sought by X for the benefit of Y in regard to transaction between X and Y, where no

conflict of interest, causing loss to Y, but no loss to X

In Killick v Pricewaterhouse Coopers [2001] PNLR 1 the directors of a company instructed

Pricewaterhouse to value the shares held by the executors of the estate of a shareholder pursuant

to a compulsory buy-back provision in the company’s articles of association. The claimants alleged

that the shares had been undervalued by £30 million. One issue was whether accountants,

instructed by a company to perform a valuation of the company’s shares, thereby setting the price at

which the shares were to be compulsorily acquired pursuant to the company’s articles of

association, owed the executors a duty of care in the conduct of the valuation.

Neuberger J held that there was a duty of care owed to the executors, even though it was the

company with whom there was a contractual relationship. The defendants were appointed for the

purpose of valuing shares for a specific purpose known to them in circumstances where there was

no possibility of the executors challenging the valuation or obtaining insurance against the

negligence of the defendants. The liability would be defined and limited. The defendants could have

refused the appointment or sought a larger fee or more comprehensive insurance cover, whereas

the claimants could not. The claimants were not involved in the appointment of the defendants, nor

could they be. The defendants' terms did not exclude liability for negligence to third parties. No one

other than the claimants could sue. It was a material factor (following White v Jones) that, if the

valuation was negligent, then no one else other than the executors could sue. The company had

suffered no loss (as it had acquired the shares at an undervalue).

The same analysis has been applied in two cases where a borrower has instructed a solicitor to

confer effective security on a lender, but where, due to the solicitor’s negligence, the security is

ineffective. The solicitor was held to have owed a duty of care to the lender, despite the absence of

a retainer. In Dean v Allin & Watts [2001] EWCA Civ 758 the foundation of liability was that the

solicitor knew that the solicitor knew that the borrower wished to confer an effective security on the

lender, that such security was fundamental to the transactions which he was instructed to effect,

and that there was an identity of interest between borrower and lender. However, Robert Walker

L.J. did not see this as an extension of White v Jones, but as an example of an exceptional case

where it is fair, just and reasonable to impose a duty on a solicitor to someone other than his client.

In Searles v Cann & Hallett [1999] PNLR 494 the Judge considered that the position of the lender,

who has not been provided with effective security by the borrower’s solicitor, was akin to that of the

disappointed beneficiaries in White v Jones. The defaulting borrower has a right of action against the

solicitor in contract, but has suffered no loss. The lender has suffered no loss, but apart from the

existence of a duty of care has no claim. The tests of foreseeability and proximity were satisfied, and

it was fair, just and reasonable to impose some liability.

Clearly, the result would have been different if there had been any conflict of interest between

borrower and lender (see Clarke v Bruce Lance & Co [1988] 1 All ER 364 , at E.10 below) . However,

there was no such conflict. The borrower needed to be able to confer an effective security on the

lender in order to obtain the loan. The borrower and the lender, therefore, had a common interest

in the solicitor acting competently, just as much as where a client wishes to benefit his family (see

Richards v Hughes [2004] PNLR 706, at E.6 above).

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E.9. Notices of severance of joint tenancy

The solicitor’s duty may extend to lifetime steps that are integral to the carrying into effect of the

testator’s intention to make a Will, or which are part of the Will-making process. For instance, there

will be a duty to advise that a joint tenancy be severed if the testator’s instructions include a gift of

the testator’s interest in joint property.

In Carr-Glynn v Frearsons [1999] Ch 326 (see B.6.1 above) the testatrix wanted to leave a half share

in joint property to her niece. However, the joint tenancy was not severed, and the Will was

ineffective to pass any interest in the joint property to the niece (the testatrix’s interest passing by

survivorship to her nephew).

The solicitor’s liability to the niece did not arise out a failure to procure the execution of a valid Will.

The lack of care lay in failing to ensure that an asset fell into the estate by advising that notice of

severance be served promptly. It was, however, held that advice as to the severance of the joint

tenancy was integral to the carrying into effect of the testatrix’s intention that her share in the

property should pass to the niece under her Will. Service of a notice of severance was part of the

Will-making process. The niece was as much an intended beneficiary of the severance as of the gift

in the Will.

The service of a notice of severance is a lifetime transaction. However, it is no great step to extend a

White v Jones duty to an intended beneficiary of the severance, given that the severance will be

effected with a view to that person benefiting under the client’s Will.

E.10. No general liability to beneficiaries of estate for advice to client re lifetime transaction

There may be cases where the solicitor has given negligent advice to a client in respect of a lifetime

transaction, which nonetheless causes loss to the beneficiaries of the client’s Will following his

death. Generally, the beneficiaries will not be entitled to recover damages from the solicitor.

In Clarke v Bruce Lance & Co [1988] 1 All ER 364 the testator had made a Will containing a devise of

a service station upon trusts under which the claimant was the remainder beneficiary. The Will was

drafted by the defendant firm. 5 years later he instructed the same firm to advise on the grant of an

option to the tenant of the service station at a fixed price within 6 months of the death of the client

or his wife, whichever was later. By the date of his death the value of the service station had

increased substantially with the result that the value of the claimant’s entitlement was reduced. The

claimant brought an action against the solicitors claiming damages for negligence, contending that

the solicitors had breached the duty that they owed to the testator, and to the claimant as

beneficiary (knowing that his interest under the Will would be affected). It was alleged that they

ought to have advised the testator that the fixed price option was an uncommercial transaction. The

action was struck out.

The case was decided before White v Jones, applying a test of proximity as to whether a duty of care

was owed by the solicitors to a beneficiary of their client’s Will. It was held that there was no such

proximity on the following grounds:

(1) There was no close degree of proximity between the claimant and the defendants. When the

defendants were instructed to prepare the documentation, containing the grant of the option,

there was no reason why they should have been expected to contemplate the claimant as a

person likely to be affected by any lack of care on their part. In no way could it be said that the

solicitor's contemplation of the claimant in relation to the grant of the option was "actual,

nominate and direct".

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(2) The grant of the option did not have as its object the benefit of the claimant. There was an

obvious conflict of interest between the interests of the testator and those of the claimant. If

the testator had been warned that the grant of the option was improvident from the point of

view of the beneficiaries under his Will, he might nonetheless have wanted to proceed, given

that the option was part of a wider transaction.

(3) If a duty was owed to the claimant, it was also owed to anyone to whom the testator might

give the property during his lifetime or by his Will. If, therefore, a duty was owed to anyone

other than their client, it would also be owed to the whole of an indeterminate class of

potential donees or beneficiaries. That would expose them to a "liability in an indeterminate

amount for an indeterminate time to an indeterminate class”.

(4) This was not a case where there was no other effective remedy. If the solicitors were negligent

in failing to advise the testator that the grant of the option was an improvident act, then he

during his lifetime had, and his personal representatives after his death have, a cause of action

against the solicitors. If a duty were to be owed to the claimant, the solicitors would be at risk

of paying damages twice over, since any damages awarded to the estate would not enure to

the benefit of the claimant, as specific devisee, but to the residuary beneficiaries.

It is submitted that the decision is correct, given the conflict between the interests of the testator

and his beneficiaries. However, the objection that there may be liability to an indeterminate class

should not in itself be a blanket objection to a claim by beneficiaries of an estate that negligent

advice has been given to the deceased in respect of a lifetime transaction. It may be that the nature

of the transaction is such that it is readily foreseeable that the beneficiaries of the client’s estate

(who may even be identified) are likely to be affected. If then, there is no conflict between the

interests of the client and the beneficiaries of his estate, it is possible that there could be liability to

the beneficiaries. In fact, the key question is whether the object of the transaction is to benefit the

beneficiaries of the estate, or at least not to prejudice their interests (see E.10.1 below).

E.10.1. Possible liability to beneficiaries of estate re lifetime advice to client where intention that

beneficiaries’ entitlement should not be affected

There may be an exception to the general rule, stated at E.8 above, where the purpose of the

lifetime transaction is to ensure that the beneficiaries of the estate continue to benefit, or are not

adversely affected. Certainly, a duty may be owed to the beneficiaries of the client’s estate under an

existing Will of which the solicitor is aware.

In Punford v Gilberts Accountants [1998] PNLR 763 the Court of Appeal was prepared to accept

(distinguishing Clarke v Bruce Lance & Co) for the purposes of a strike-out application that, as a

matter of law, a professional man, who has undertaken the preparation of a Will or who has advised

in regard to a Will intending to benefit a named third party, owes a duty to that third party when

giving subsequent advice to the testator which is intended to ensure that his instructions as

expressed in the Will continue to benefit the third party, in the event that such advice is found to

have been given negligently and the benefit in favour of the third party is defeated.

In Punford solicitors had drafted the testator’s Will whereby the testator left his residuary estate

upon trust for his wife for life, and subject thereto, upon trust to transfer his house to his son. The

solicitors subsequently advised in connection with the transfer of the house by the testator to his

wife and himself as beneficial joint tenants. The testator died. His interest in the house passed to his

wife. She sold the house and gave the proceeds to another son. The claim was that the solicitors

should have advised the testator that the effect of the transfer would be to defeat his testamentary

gift, if he were to die before his wife. However, the purpose of the transfer was not to ensure that

the Will continued to benefit the claimant son. On the contrary, it must have been perfectly obvious

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to the testator that the transfer to himself and his wife as beneficial joint tenants would make it

impossible for the testamentary gift of the house in favour of the claimant to take effect in the event

of him predeceasing his wife.

Punford is, therefore, a case where the interests of the client in effecting the lifetime transaction

may conflict with those of the beneficiaries of the client’s Will. However, it does not rule out liability

where there is no such conflict.

In any event, a solicitor would be well advised to ask a client, for whom he acts in a lifetime

transaction, whether he would like to review his Will in the light of that transaction, particularly if

the solicitor drafted the client’s Will. What if a solicitor is asked to act on the sale of his client’s

house? The client, as the solicitor knows, has made a specific devise of the house to X in his Will, his

residuary estate being left to other beneficiaries. The gift of the house will adeem on sale. The

solicitor could conceivably owe a duty to X if he fails to advise the client to review his Will so that he

can consider making a substitute gift of his new house, or some other asset, to X. Or, following

Punford, would it be so obvious to the client that the devise would fail, that the solicitor would

escape liability?

E.11. Post-death tax planning advice

In Cancer Research Campaign v Ernest Brown [1998] PNLR 592 Harman J held that there was no duty

owed by a solicitor to a client, who instructs the solicitor to prepare a Will, to give post-death tax

planning advice, e.g. to execute a deed of variation in another estate (see B.9.3 above). This does

not necessarily mean that there can be no liability to the beneficiaries of a client’s estate for

negligent advice in connection with a deed of variation, which the solicitor has prepared, even

though the deed of variation is a lifetime transaction (see B.9.4 above). The object of the transaction

is to benefit the beneficiaries of the client’s estate after his death.

F. INHERITANCE TAX PLANNING AND LIFETIME GIFTS

F.1. Daniels v Thompson

A problematical area is whether a professional, giving tax advice to a client in respect of a lifetime

transaction, may be liable to the personal representatives or beneficiaries of the client’s estate, in

the event that the tax advice is negligent, causing additional tax to be paid in the client’s estate.

The leading case is Daniels v Thompson [2004] EWCA Civ 307. In 1989 Mrs Daniels retained the

defendant solicitors to give tax planning advice. She gave her house to her son pursuant to advice

that the gift would be exempt from IHT if she survived for 7 years. However, she continued to live in

the house rent-free until her death in 1998. This meant that she reserved a benefit for IHT purposes,

and IHT was payable on her death in respect of the value of the house. This was something of which

Mrs Daniels had not been advised. Mrs Daniels’ son issued negligence proceedings in May 2002. His

pleaded case was that he was entitled to damages as personal representative on behalf of Mrs

Daniels’ estate in respect of a breach of duty owed to Mrs Daniels in giving her defective tax-

planning advice. The defendant solicitors asserted that the claim was statute barred since, in effect,

the loss arose at the date of the gift, which was more than 6 years before the commencement of

proceedings. The claimant claimed that the claim in tort was not statute-barred since no loss was

suffered until Mrs Daniels’ death.

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The cause of action in contract was clearly statute barred. Any cause of action in tort would,

however, only arise when loss was suffered. The pertinent question was, therefore, when the

relevant loss was suffered.

However, the Court of Appeal determined the case on more fundamental grounds than limitation. It

held that Mrs Daniels had suffered no loss in her lifetime. She was never at any risk of having to pay

any IHT. That was a risk to which the estate, and the estate alone, was exposed, since liability to pay

IHT only arises on death (para. 34).

Therefore, there was no cause of action which could accrue to her personal representative on her

death under s. 1 of the Law Reform (Miscellaneous Provisions) Act 1934. No issue of limitation arose.

The argument (to overcome the limitation defence) that the claimant did not suffer loss until the

death of Mrs Daniels amounted to an implied admission that Mrs Daniels did not have a cause of

action (in which case the pleaded case was bound to fail).

If, however, Mrs Daniels did have a cause of action during her lifetime, then it arose when she relied

on the defendant’s advice by making the gift with a reservation. On that alternative basis the claim

was statute barred.

F.2. Alternative claim by personal representatives

An application was, however, made to amend the claim so as to plead that the solicitors owed a

direct duty to Mrs Daniels’ personal representatives (as opposed to a duty to Mrs Daniels devolving

on her personal representatives on her death). The argument was that the personal representative

had obtained a cause of action as soon as Mrs Daniels died when the personal representative

became liable to pay additional IHT. In this way it was hoped: (a) to establish a cause of action and

(b) to argue that the cause of action was not statute barred since it only arose on the death of Mrs

Daniels when the liability for IHT arose.

However, the Court of Appeal refused to allow this amendment. In part, this was because the

application was made very late in the day, and the costs of allowing an amendment would be

disproportionate. However, the application to amend was also rejected on the grounds that the

amended claim had no real prospect of success.

F.3. Damages recoverable by deceased during lifetime

However, the Court of Appeal did accept that any legal costs incurred in taking advice, and of any

reasonable remedial steps taken to make good the deficiency, are recoverable before death (Daniels

v Thompson, para. [36]). Presumably, any tax liability of the client incurred in taking reasonable

remedial steps would also be recoverable. To that extent the client has a cause of action during his

or her lifetime. It was also accepted that Mrs Daniels might have been able to claim repayment of

fees for the performance of services that were worthless, in restitution, on the basis that payment

was made for no consideration (para. 40).

This may mean that the client has a cause of action during lifetime to recover the costs of taking

advice in respect of a failed IHT scheme, and in respect of any remedial steps, even if there is no

cause of action in respect of the IHT liability itself. Presumably, however, the client could not claim

an indemnity in respect of IHT payable by his estate following death, since the client has no cause of

action with respect to the IHT.

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F.4. Contractual cause of action of deceased devolving on personal representatives

A contractual claim by the personal representatives was not considered in Daniels v Thompson

because such a claim would have been statute-barred. The cause of action in contract arose when

the tax advice was given (which was more than 6 years before the commencement of proceedings).

It is not clear whether a contractual claim could have been made in Daniels by the personal

representatives if the claim had been made within the limitation period. In Rind v Theodore

Goddard [2008] PNLR 459 Morgan J commented that the Court of Appeal in Daniels did not discuss

in any detail a possible claim in contract, nor whether it would give rise to substantial or nominal

damages.

Morgan J also referred to the case of Otter v Church Adams Tatham & Co [1953] 1 Ch 280 (see D.1.4

above) as authority for the proposition that personal representatives may claim substantial damages

in respect of a contractual claim, vested in the deceased, measured by the loss which accrues on

death. He commented that Otter was not referred to in Daniels v Thompson.

It is submitted that, where the claim is, as in Daniels, to recover an IHT liability arising on death, the

personal representatives do not have a contractual claim against the negligent solicitor in respect of

that IHT liability. Otter is distinguishable. In Otter Mr Otter had lost the opportunity to take a step

which would have increased the value of his assets during his lifetime. If he had been advised to

disentail, he could have alienated the settled property for value; without disentailment he could not.

He had suffered a substantial loss during his lifetime, albeit one that could have been mitigated if he

had been aware of the solicitor’s negligence. By contrast, in Daniels Mrs Daniels had suffered no loss

during her lifetime by reason of the IHT liability in her estate arising after her death. She was never

exposed to an IHT liability during her lifetime.

In the Scottish case of Matthews v Hunter & Robertson Ltd [2008] PNLR 35 (a case involving loss to

the estate by reason of the solicitors’ failure to effect the Scottish equivalent of severance of a joint

tenancy) the Court of Session accepted, for present purposes, that the client never suffered loss,

albeit subject to the express reservation that the matter was not free from difficulty.

Even if the deceased, and his personal representatives, have or had a cause of action in contract, the

limitation treatment of a contract claim would almost always mean that the claim in contract would

not be available, since the normal limitation period is 6 years. In many cases, the negligence will only

come to light more than 6 years after the breach of contract, i.e. when the defective advice was

given.

F.5. Cause of action in tort devolving on personal representatives

Daniels v Thompson is authority for the proposition that - since no cause of action in tort accrues to

a person unless that person has suffered loss - the client has no cause of action in tort respect of a

liability arising on death (such as IHT) during his lifetime. Consequently, no cause of action in tort can

devolve on the client’s personal representatives following the client’s death. Mrs Daniels had not

suffered any detriment capable of assessment in money terms in respect of her frustrated wish to

confer on her son the benefit of a reduction in the IHT liability of her estate.

In Rind v Theodore Goddard [2008] PNLR 24 Morgan J referred to a number of cases where a cause

of action in tort vested in personal representatives on death (paras. 41 to 44; see D.1.5 above).

However, none of those cases related to IHT, which is a liability only arising on death. By contrast, in

Clarke v Bruce Lance & Co [1988] 1 All ER 364 (one of the cases cited) it was stated that the client

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would have had a cause of action during his lifetime, and that his personal representatives would

have a cause of action on his death. The client had a cause of action in his lifetime, having suffered

loss during his lifetime by reason of the diminution in the value of his property.

In conclusion, personal representatives should not be entitled to enforce a cause of action in tort, in

respect of IHT payable on death, to which the client was entitled during lifetime. The client had no

cause of action in her lifetime, having suffered no loss.

F.6. Claim by personal representatives in own right

Daniels v Thompson supports the conclusion that personal representatives themselves do not, in

their own right, have a cause of action in respect of any IHT liability arising on death. In Daniels the

Court of Appeal refused permission to amend the pleadings to make such a claim, not only because

of the lateness of the application, but also on the merits, on the basis that the claimant suffered no

loss in his capacity as executor, since he could recover any IHT payable by him out of the estate

(paras. 47, 57, 61, 68, 75). The executor may have less to distribute. However, as his only duty is to

distribute what comes into his hands, he has suffered no loss. In reaching this conclusion, their

Lordships expressly rejected the reasoning of Park L.J. in Macaulay v Premium Life Assurance Lexis,

29 Apr 1999 where there was a claim by executors of an estate in respect of negligent IHT advice. In

Macaulay there was a preliminary issue of whether the claim was statute barred (the advice having

been acted upon more than 6 years before the commencement of the limitation period). It was held

that the claim was not statute barred because the IHT liability only arose on the death of the client,

and did not exist before that date. Park J regarded it as significant that the liability to IHT of personal

representatives is not a liability imposed on the deceased by statute, but directly on the personal

representatives as such. This reasoning was, however, rejected in Daniels v Thompson. The

imposition of liability on the personal representatives was no more than a reflection of the fact that

it cannot be imposed on the deceased (para. 61).

However, the statements in Daniels v Thompson that the personal representative would not have

suffered loss by payment of additional IHT (which were, in any event, obiter) are inconsistent with

the decision in Chappel v Somers & Blake [2003] PNLR 730 (see B.11 and D.1.2 above). It is

submitted that a personal representative may suffer loss, i.e. loss to the estate during the period of

administration, including payment of additional IHT, even though the personal representative is only

obliged to account to the residuary beneficiaries for assets in the hands of the personal

representative. Chappel was decided before Daniels v Thompson, but is not referred to in the

judgments in Daniels, which would suggest that it was not cited.

However, whilst the personal representatives may have suffered recoverable loss, it does not

necessarily follow that they are owed a duty of care by solicitors giving tax advice in respect of a

lifetime gift. The Scottish case of Matthews v Hunter Robertson Ltd [2008] PNLR 35 supports Daniels

in denying that any duty is owed to personal representatives as such. In Matthews the Court of

Session rejected the proposition that damages for loss constituted by diminution of the estate can

be sued for by an executor as being entirely unsupported by Scottish, English or any other authority.

As a matter of principle, it was denied that any duty was owed by a solicitor to the post mortem

estate of their client as represented by the individual who eventually comes to accept the office of

executor. There was insufficient proximity in the relationship between a solicitor instructed in

respect of a specific transaction and a yet to be appointed executor of the client in respect of an

interest that the client could never have. In addition, it would not be fair and just to impose a duty

given that the claim would only become actionable on, and the limitation period only run from, the

client’s death, which might be a number of decades after the conclusion of the relevant transaction.

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It is submitted that, as a matter of English law, there may be sufficient proximity between the

solicitor and the client’s estate, even if the solicitor is unaware of any appointment of executors

made in the client’s Will, or even if the executor is yet to be appointed. Arguably, all that should be

required is that the solicitor is, or should be, aware that the advice is being provided for the benefit

of the client’s estate after he is dead, even if the identity of the executors is not known. There are

cases where the courts have found that a duty exists to personal representatives (see D.1 above).

However, it remains an open question in English law as to whether personal representatives may

owe a duty directly to the personal representatives, as such, in respect of IHT payable by the

personal representatives.

F.7. Claim by beneficiaries

In Daniels v Thompson it was left open as to whether the residuary beneficiaries of the estate might

have a cause of action against the solicitors. Carnwarth L.J. said at para. [58]:

“It is important to emphasise that we are not dealing with a claim in respect of a duty

owed to Mr Daniels in his capacity as a potential beneficiary, under the principles in

White v Jones. Whether such a claim could be made is not an issue before us, even

under the proposed amendment.”

If, following Daniels v Thompson, neither the client, nor her personal representatives, have an

effective claim against solicitors who have given negligent estate tax-planning advice, this would give

rise to a lacuna in the law, which could be filled by allowing the residuary beneficiaries to sue in

respect of the diminution in the value of their entitlements by reason of the liability to tax.

In Rind v Theodore Goddard [2008] PNLR 24 Morgan J had cause to consider whether such a lacuna

existed, and whether, in consequence, a residuary beneficiary had a real prospect of success in his

claim as residuary beneficiary. Mrs Rind transferred the legal title to a commercial property to a

Jersey company upon trust for her son, the claimant. There followed a series of transactions, the

effect of which was that Mrs Rind reserved a benefit for IHT purposes. The claimant sued the

defendant firm (who had advised in respect of the material transactions) in his capacity as a

residuary beneficiary of Mrs Rind’s estate. He claimed that the defendant firm owed a duty of care

to him, as one of the intended residuary beneficiaries, in particular in relation to estate tax planning;

that the defendants had structured the transaction in such a way as to give rise to a reservation of

benefit and potential IHT liability (which the claimant had settled after his mother’s death); and that

the reservation of benefit and consequent IHT liability could have been avoided. The defendant firm

applied for summary judgment and/or to strike out the claim, one ground being that no duty was

owed to the claimant as a residuary beneficiary of the estate.

Morgan J considered whether, in principle, a duty of care could be owed by solicitors to the

residuary beneficiaries of the client’s estate by way of an extension of White v Jones. He doubted

whether a first instance Judge would do anything other than loyally follow Daniels v Thompson. The

decision in that case gave rise to the possibility that there was a lacuna which needs to be filled by

extending a White v Jones duty to the residuary beneficiaries. If Daniels v Thompson was correctly

decided, Mrs Rind had suffered no loss; her estate could not inherit a more valuable claim that she

had; and the personal representatives had also suffered no recoverable loss. Therefore, unless a

remedy were given to the residuary beneficiaries, no person would be entitled to claim in respect of

the IHT liability. Morgan J concluded that he could not strike out or dismiss the claim summarily.

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This does not, however, mean that the court would necessarily, on a full trial, or on appeal, conclude

that a duty of care is owed by solicitors to residuary beneficiaries where the solicitors are

responsible for a loss to the estate giving rise to a diminution in the value of the beneficiaries’

entitlement, such as an avoidable IHT liability. It may be that the personal representatives can claim

(see F.7.1 below).

If one of two equal residuary beneficiaries has paid all the IHT payable in respect of the estate, he

will only be entitled to recover the reduction in his own share of the residuary estate, which cannot

exceed one half of the IHT and interest paid (Rind v Theodore Goddard, para. 79).

F.7.1. No lacuna

Morgan J commented that if Daniels v Thompson were to be considered again by the Court of

Appeal, or reviewed by the House of Lords, he would not be able to predict what the outcome would

be. His chief doubt stemmed from the submission by Counsel for the Defendants that there was no

lacuna and, therefore, no reason for invoking White v Jones. Counsel had referred to a number of

authorities to the effect that personal representatives can claim damages, in both tort and contract,

in respect of a breach of duty during the claimant’s lifetime causing damage only arising following

the death of the client (see F.4 and F.5 above). Counsel submitted that, subject to any limitation

defence, Mrs Rind’s personal representatives could sue the solicitors in contract or tort for breach of

duty and the damages recoverable would be the amount by which the estate was diminished by

reason of the liability to pay IHT. The damages would be added to the residuary estate and would

find their way to the residuary beneficiaries. It was, therefore, argued that there was no lacuna.

Morgan J commented that the court in Daniels v Thompson did not discuss in any detail Mrs Daniel’s

possible cause of action in contract (which he seemed to regard as a more likely claim by personal

representatives than a tort claim) against the solicitor, and that he had had a fuller citation of

authority than did the Court of Appeal in Daniels v Thompson.

In conclusion, it is possible that, the Court of Appeal or the House of Lords, might in future hold that

no duty is owed to residuary beneficiaries on the basis that the personal representatives have or had

a contractual claim for the same damage. Even if that is the case, there is a further uncertainty.

What if the personal representatives had a contractual claim, which is statute barred, so that the

beneficiaries will not be compensated by means of such a claim?

However, it is submitted that the personal representatives have no claim, derived from a cause of

action vested in the deceased on his death, to recover IHT payable after the death of the deceased,

either in contract or in tort (see F.4 and F.5 above). Furthermore, it is questionable whether they

have a cause of action in their own right in respect of a duty owed to them as personal

representatives (see F.6 above). On that basis, it is strongly arguable that the beneficiaries have a

cause of action.

F.7.2. Foreseeability of loss to residuary beneficiaries

In Rind, Counsel for the defendant firm submitted that, in any event, the solicitors must have been

aware of the persons or class of persons (in each case ascertainable if not actually named) on whom

the client wished to confer a benefit. Morgan J stated that, even if the court were to conclude that

there was a lacuna, and that the solicitors owed a duty to any persons affected by ineffective estate

planning, the solicitors would have a strong argument for saying that a White v Jones duty of care

cannot be extended to such persons because this would be to impose upon the solicitors a duty to

an indeterminate class of potential beneficiaries. The potential for such an indiscriminate liability is

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generally a reason for rejecting the existence of a duty of care (see Clarke v Bruce Lance [1988] 1 All

ER 364, see E.10 above).

Morgan J decided, however, that it was reasonably arguable, for the purposes of a summary

application, that Mrs Rind’s settled intention was to leave the bulk of her estate to her children and

grandchildren, and that the solicitors should be reasonably be expected to have contemplated the

claimant as a person who would be adversely affected by ineffective estate planning in relation to

Mrs Rind.

Therefore, even if solicitors owe a duty to beneficiaries of their client’s estate, in respect of negligent

estate tax planning advice, liability will only be imposed if the solicitors are aware that the client has

made a Will, or has a settled intention to make a Will, benefiting the claimant or a class of persons

including the claimant, and that negligent tax advice will affect such a person. The beneficiaries must

have been identified with reasonable certainty at the time of the transaction.

F.7.3 Other approaches

Morgan J’s judgment could, perhaps, be criticised on the basis that a beneficiary’s claim, in respect

of a failed IHT-saving scheme, should not be regarded as a White v Jones claim, or as an extension

thereof. The issue should not be whether there is a lacuna, i.e. whether there is any person, other

than the beneficiary, who can bring such a claim. The claim is not strictly a White v Jones claim as it

is not one where the solicitor has been instructed, but failed, to confer a testamentary benefit on a

third party.

The correct analysis may be that a claimant/beneficiary should be entitled to recover from a

negligent solicitor if the solicitor knew or ought to have known that the beneficiary was relying on

the solicitor to give effective IHT-planning advice; the provision of competent advice was of

fundamental importance to the beneficiary; and there is a sufficient identity of interest between the

client and the beneficiary (Dean v Allin & Watts [2001] EWCA Civ 758, at para. 69). On this basis, the

duty is an independent duty owed to the beneficiary, not a duty owed to the client which is

extended to the beneficiary, as in White v Jones. The foreseeability of damage and the relationship

of proximity to the beneficiary make it fair, just and reasonable that the law should impose a duty of

care to the beneficiary (Dean, paras. 40 and 49). Unlike in Clarke v Bruce Lance, there is no conflict

between the interests of the client and of the beneficiary. Unlike in White v Jones there is reliance

by the beneficiary on the solicitor’s advice, to the knowledge of the solicitor. In other words, the key

factor may be reliance by the beneficiary. That reliance will often arise in an IHT-planning case

because the beneficiary will be aware that advice is being given for his ultimate benefit, and may

even play a part in the instructions given to the solicitor.

Indeed, the claimant/beneficiary may even be a client, to whom contractual duties are owed, if the

solicitor is held to have advised not only X, in respect of a scheme to save IHT in X’s estate, but also

X’s wife or children (see Mathew v Maughold Life Assurance Co Ltd (1987) PNLR 309, where a duty

was held to be owed to the wife of a client who sought tax advice). In Hughes v Richards [2004]

EWCA Civ 266 (see E.6 above), there was a claim by both parents and their infant children against

accountants for alleged negligence in failing to establish a trust which was effective to benefit the

children. Jacob L.J. considered that it was at least arguable that the accountant was advising both

donors and donees; and that he was acting directly for the children (who could not act for

themselves being under age) and not just for the parents.

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F.7.4. Limitation in case of lifetime gift

In a case, such as Daniels v Thompson, where the deceased has entered into a lifetime gift subject to

a reservation of benefit, it might be thought that the cause of action, accrued on the date of the gift

when the donor has suffered a measurable loss in having made a gift of an asset subject to a

reservation of benefit (Forster v Outred [1982] 1 WLR 86; Nouri v Marvi [2010] PNLR 7; Rind v

Theodore Goddard [2008] PNLR 24, para. 82).

The limitation period in respect of a cause of action in contract will, indeed, expire 6 years from the

date of breach. However, in respect of any claim by the beneficiaries of the estate in tort, the cause

of action accrues when the beneficiary first sustains damage. In Rind v Theodore Goddard Morgan J

accepted for the purposes of a strike out application (para. 83) that, if the Court were to follow

Daniels v Thompson and reach a conclusion that a duty of care was owed by the solicitors to the

claimant beneficiary, Daniels v Thompson would seem to produce the result that the claimant

suffered damage from the first time on the death of Mrs Rind (para. 83; see also Cotterell v Leeds

Day [2001] WTLR 435, at 441F-G where this conclusion was described as “arguable”). The rationale

was that no loss of IHT was suffered until death. The limitation period of 6 years (s. 2 of the

Limitation Act 1980) ran from the date of death. It is submitted that the limitation period in a claim

by beneficiaries in tort – at least in respect of a liability to IHT – would commence on death. The

same should be true in respect of a claim by the personal representatives (if such a claim can be

made).

If more than 6 years have expired since the date of death, it may be possible to extend the limitation

period pursuant to section 14A of the Limitation Act 1980. That section applies to actions in tortious

negligence and provides for a limitation period to run for 3 years from the date of knowledge

required for bringing an action for damages in respect of the relevant damage. In Daniels v

Thompson the Judge at first instance held that this date was about 9 years later than the date when

the gift was made. This was not challenged on appeal.

The House of Lords has given full consideration to the issue of the date when the relevant

knowledge is acquired for the purposes of s. 14A of the Limitation Act 1980 (Hayward v Fawcetts

[2006] UKHL 9). Time begins to run when the client knows enough to embark on preliminary

investigations into the possibility that defective advice has been given causing loss. The requisite

knowledge is knowledge of the facts constituting the essence of the complaint of negligence. This

may be before the date when the claimant knows that he has, or may have, a claim as a matter of

law.

Where the claim is that the solicitors have failed to advise that a deed of variation be executed, time

begins to run from the date when the 2-year period permitted for deeds of variation expires (Cancer

Research Campaign v Ernest Brown [1998] PNLR 592 where Harman J concluded that no reasonable

person could have obtained the relevant knowledge from facts observable or ascertainable by them

within the 3 years before the issue of the writ).

In any claim for negligence, not involving personal injuries, there is a long-stop period of 15 years

from the last of the dates on which there occurred any act or omission which is alleged to constitute

negligence and to which the damage, in respect of which damages are claimed, is alleged to be

attributable in whole or in part (s. 14B of the Limitation Act 1980). Section 14B(2) makes it clear that

s. 14B can bar a right of action in a case notwithstanding that the cause of action has not yet accrued

before the limitation period prescribed by the section. In Rind v Theodore Goddard Morgan J had

found that it was arguable that the cause of action accrued on death. The claim was brought within 6

years of death. Nonetheless, he found that s. 14B could produce the result that the claim was

statute barred before that time (para. 84). In the event, he found that the last act of negligence

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occurred within 15 years of the commencement of proceedings (when advice was given that only

partially removed a reservation of benefit).

F.7.5. Conclusion on Daniels v Thompson

Daniels v Thompson does, at first glance, provide a formidable obstacle to a claim to recover IHT

payable by the estate as a consequence of defective advice in connection with a lifetime transaction.

The claim (based on the vesting of the deceased’s cause of action in her personal representatives)

was dismissed on the basis that the deceased had suffered no loss. Permission was not given to

amend to allow a claim by the personal representatives in their own right, in part because it was

considered that such a claim was without merit.

However, the possibility of a claim by the beneficiaries was left open; there was no full consideration

of a claim by the personal representatives in their own right, and any comments as to the merits of

such a claim were obiter; and there was no consideration given to a contractual claim.

Given the state of uncertainty as to the law, any claim in a Daniels v Thompson type of case is best

brought by all possible claimants in the alternative, i.e:

(a) By the personal representatives in respect of a contract claim devolving on them on the

client’s death, assuming that no more than 6 years has expired since the date of the gift.

(b) By the personal representatives in tort, by virtue of a direct duty owed to them in their own

right.

(c) By the beneficiaries in tort, by virtue of a duty owed to them in their own right.

G. LIMITATION, CAUSATION AND LOSS

G.1. Limitation in Will cases

In Bacon v Howard Kennedy [2001] WTLR 169 (see B.1 above) it was argued, on behalf of the

defendant solicitors, that the cause of action accrued when instructions had been given to the

defendant's solicitors to prepare the Will (it was never prepared). It was argued, on behalf of the

claimant, that the cause of action did not accrue until the date of death of the testator.

It was held that the damage did not accrue until death on the basis that at any time up until death

the testator could make a Will in favour of the claimant. The judge rejected an argument that, if

mental incapacity had intervened, the ability of the testator to make a Will would have ceased

before death. The testator was not mentally disabled, and he might have corrected the omission of

having no Will at any time over the nine years or so before his death. Arguably, the position would

be the same even if the testator did become mentally incapable. The Court of Protection has power

to make a Will on behalf of a patient.

It is submitted that the same conclusion would be reached even in a case where the negligence

consists of preparing a valid Will, albeit one which fails to confer the intended benefit on the

claimant. No loss is suffered by the intended beneficiary until the death of the testator: he could

have made a new Will in favour of the claimant during his lifetime. In addition, beneficiaries have no

interest under a Will during the testator’s lifetime, as a Will is “ambulatory” prior to death. The

beneficiaries can, therefore, suffer no loss until the death of the testator (see F.7.4 above). In Nouri

v Marvi [2010] PNLR 7 Norris J did not doubt the decision in Bacon v Howard Kennedy stating that, in

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general terms, the disappointed beneficiary’s cause of action does not accrue until the testator’s

death with a defective Will. The loss of the spes or expectancy that would have arisen had a proper

Will been executed is not itself real damage, but only negligible damage, with the result that actual

damage only occurs on death.

Even if the damage occurs before death, and the primary limitation period of 6 years has expired,

the limitation period may be extended by s. 14A of the Limitation Act 1980 for 3 years from “the

date of knowledge” subject to a 15-year longstop (see F.7.4 above). In Bacon v Howard Kennedy the

Judge held that it would not have been possible to rely on s. 14A to extend the limitation period if,

contrary to his primary finding, the cause of action had accrued when instructions were given for the

making of a Will. The client had knowledge whether or not the Will had been made, “being

knowledge which he might reasonably have been expected to acquire from facts ascertainable by

him” (s. 14A(10) of the 1980 Act). It would have been reasonable for him to have inquired whether

the Will had been prepared.

There is a 15-year long stop to any claim in negligence (see F.7.4 above). Estoppel may provide a

answer to a limitation defence if the claimant has been encouraged to believe that a claim can be

brought outside the limitation period (Cotterell v Leeds Day & Co [2001] WTLR 435).

In Esterhuizen v Allied Dunbar [1998] 2 FLR 668, at 678 D-F, Longmore J did not rule out the

possibility that the limitation period relevant to the testator’s contract could be applied to a

beneficiary’s claim in tort.

G.2. Causation and loss

G.2.1. Damages equal to lost benefit under Will

In a standard White v Jones case, the claim will be to such amount as the claimant would have

received if a valid Will had been executed. If the claimant would have been entitled to a legacy or

residuary gift, which would have been reduced by estate liabilities, the claimant is only entitled to

damages equal to the entitlement as reduced by such liabilities. The duty is not a duty to take care

to ensure that the specific legatee receives his legacy; it is a duty, in relation to the relevant

property, to take care to ensure that that property forms part of the testator's estate so that it can

pass to the intended beneficiaries on death (Carr-Glynn v Frearsons [1999] Ch 326, at 337).

Credit must be given for any benefit under the last valid Will, and for any ex gratia payments made

to the claimants made by the beneficiaries of such a Will.

G.2.2. Discount for possibility that the testator would not have made, or would not have

revoked, the Will

In most cases there will be clear evidence that the solicitor was instructed to make a Will in favour of

the claimant. However, in Ryan v Public Trustee [2000] 1 NZLR 700 the solicitor had failed to make

proper inquiries of a doctor as to the testatrix’s testamentary capacity. Nonetheless, he declined to

act on the testatrix’s instructions believing that she was incapable. Damages were to be assessed for

the lost opportunity, rather than the certainty, that the testatrix would have made a Will in the

claimant’s favour (if a doctor had been involved in confirming her instructions).

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In Hall v Meyrick [1957] 2 QB 455 the defendant failed to advise the claimant that her marriage

would revoke a Will by her intended husband in her favour. The marriage took place and the

husband died intestate. The claimant claimed that, owing to the absence of advice from the

defendant, she had had failed to take steps to obtain a new Will from her husband after his

marriage. Damages were assessed on a loss of a chance basis, subject to deductions for the

contingency that the husband would have been willing to have executed a new Will in her favour,

and that it would not have been revoked. This is in accord with general principles relating to the

assessment of damages on a loss of a chance basis (see Allied Maples v Simmons & Simmons [1995]

1 WLR 1602).

If the testator would have changed his mind, and revoked the Will benefiting the claimant, there will

be no loss caused by the solicitor’s negligence. This is why the testator must have a fixed, continuing

intention to benefit the claimant (see A.5 above). If such a fixed, continuing intention is established,

it would not normally be appropriate to make a deduction for the possibility that the testator would

not have made the Will in question even if there had been no negligence. In White v Jones [1995] 2

AC 207 the Court of Appeal awarded the full amount of the legacies to which the claimants would

have been entitled under the Will which the solicitor was instructed to draft. No deduction was

made for any prospect of a last minute change of heart even though there was a suggestion of this

(see 228A-E). The House of Lords did not say anything on this point. In Bacon v Howard Kennedy

[1999] PNLR 1 (see B.1 above) it was argued that damages should be reduced to take into account

the contingency that the deceased would not have executed any Will sent to him or that he would

have altered it. This was not accepted: damages should be measured by the loss as at death flowing

from the fact that there was not an effective Will, when there should have been. In Humblestone v

Martin Tolhurst Partnership [2004] PNLR 26 no discount was applied for the possibility that the

testator might have changed his mind and not made the Will in question, where Mann J held that

there was “at most a degree of uncertainty, and arguably not even that.”

In conclusion, if the court finds that there was an intention to benefit the claimant, and there is no

positive evidence of any change of mind, it will not generally be appropriate to discount the

damages for the possibility that the testator would have changed his mind. However, in theory, if

there were more substantial evidence of a possible change of mind, damages could be assessed

subject to a discount for such a possibility (see G.2.4 below).

G.2.3. Discount for uncertainty of benefit under Will

In Trusted v Clifford Chance [2000] WTLR 1219 (see A.4 above), Jonathan Parker J found that the

solicitors were not liable to the claimants. However, he did consider how damages might be

assessed, if there were liability, given that the claimant was one of 9 members of a discretionary

class of beneficiaries. The submission that the claimant should be entitled to 1/9 of the value of the

fund was rejected. The court must fairly assess the value of the expectation that has been lost. This

is no doubt correct, albeit that it may give rise to difficult valuation issues. Some beneficiaries might

have been more likely to have benefited than others.

In Gray v Richards Butler [2000] WTLR 143 Lloyd J suggested (obiter) that where, due to the

solicitor’s negligence, a Will, containing a Will trust with a power of appointment in favour of a class

of beneficiaries, the trustees should bring the claim for the benefit of the class as a whole. However,

he stated that this was a problem which would have to be faced in some future case.

G.2.4. Discount for claims against estate

In Gartside v Sheffield, Young & Ellis [1983] NZLR 37, at 56, it was accepted that, in a given case, a

court may view the actual loss suffered through the negligence of a solicitor failing to prepare a Will

as being much less than the testamentary provision made for him. The possibility of other claims

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being brought to the detriment of the disappointed beneficiary, had the Will been executed, must

be taken into account; any amount that the disappointed beneficiary may receive in a family

provision claim will be relevant. In the end a value must be placed upon the benefit that has been

lost. Although there will be undoubted difficulties in the assessment of any damages, the courts

should not shrink from allowing a claim because of them.

As to claims under The Inheritance (Provision for Family and Dependants) Act 1975 a disappointed

beneficiary’s claim could be reduced to take into account the possibility that the disappointed

beneficiary’s entitlement under the Will would have been reduced by a successful claim by a third

party under the 1975 Act.

In Horsfall v Haywards [2000] WTLR 29 (see B.7.3 above) it was alleged that the claimant’s damages

should be reduced, due to the fact that the testator’s wife had a claim for reasonable financial

provision under the 1975 Act, and also a claim to set aside a deed of gift of property to the deceased

allegedly procured by undue influence. This was rejected. There was insufficient evidence before the

court in relation to the 1975 Act claim. The wife was not a party to the proceedings. She gave no

evidence save for the general statement of her intention to make the 1975 Act claim. It was

impossible, in the absence of evidence of facts material to establishing and quantifying such a claim,

to conclude that a claim, if made, would have reduced in value the assets in the estate available to

satisfy the claimant’s interests under the Will. On the undue influence point the judge had correctly

concluded that there was no evidence of actual undue influence and no serious prospect of

establishing a claim of presumed undue influence or a breach of the fair dealing rule. The two

suggested claims were only possibilities. They were never in fact made. If made, there was no more

than a speculative chance of successfully recovering something for the wife. No reduction should be

made in the quantum of damages on account of the chance of such speculative claims.

In Bacon v Howard Kennedy [1999] PNLR 1 (see B.1 and G.2.2 above) the court refused to reduce the

damages for the speculative chance that, if the claimant had pressed the solicitor to prepare the

Will, the Will would have been set aside on the grounds of undue influence.

However, in the Canadian case of Whittingham v Crease 88 DLR (3d) 353 the court assessed the

value of a claim by two of the testator’s children under the Testators Family Maintenance Act (2/3 of

the estate). On that basis, the claimant would have received 1/3 of the testator’s estate, if a valid

Will had been made. He was entitled to 1/3 of the estate on an intestacy. He was, therefore, entitled

to damages from the solicitor, who had negligently failed to prepare an effective Will, of the

difference between 1/5 and 1/3 of the estate.

It is not clear what the approach of the court would be if there is more than speculative evidence of

a claim by a third party against the estate. It might be that the court would stay the negligence claim

for a period pending such a claim. The two actions could then be heard together. Alternatively, it

might itself put a value on such a claim in assessing damages.

G.2.5. Discount for claimant’s claim against the estate

The disappointed beneficiary may have a claim under the 1975 Act, in respect of a prior Will or on an

intestacy, which, if successful, would reduce or extinguish any loss. Indeed, in Ryan v Public Trustee

[2000] 1 NZLR 700 the court determined the quantum of such a claim (under similar legislation in

New Zealand to The Inheritance (Provision for Family and Dependants) Act 1975 respectively) and

then reduced the damages claim by that amount.

It is not clear how an English court would proceed. It seems unlikely that the court would, in

negligence proceedings, determine the quantum of a 1975 Act claim if no such claim has been made

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and/or the defendants to the 1975 Act proceedings are not joined as parties. However, it is possible

that a rough and ready assessment might be made and damages reduced accordingly. Indeed, such a

conclusion could be justified on the basis that there has been a failure to mitigate by bringing a 1975

Act claim, at least if that claim was a strong and obvious one. In any event, it may well be in the

interests of the defendant to offer an indemnity in respect of the costs of making a 1975 Act claim.

G.2.6. Claims for other losses

It is not always the case that the relevant loss is the loss of expected benefit under a Will. For

example, the loss may be:

(a) the costs of probate proceedings to set aside a Will which would not have been made but

for the solicitor’s negligence (see C.5 above);

(b) the amount paid to settle such an action (Hines v Willans [2002] WTLR 299; see B.13 above);

(c) the costs of bringing rectification proceedings to remedy a mistake in a Will for which the

solicitor is responsible (see B.7.3 above).

G.2.7. Causation issues

In many cases, the court has found that, even if the defendants had not been negligent, there is

insufficient evidence that the claimant’s loss would have been avoided, or that the testator would

have acted any differently. This is particularly relevant in a case where the allegation is that the

solicitor has failed to take the testator’s instructions on a relevant matter and/or failed to advise

accordingly. The court may find that, even if instructions had been taken and/or the client properly

advised, the client would not have acted any differently, or that there is insufficient evidence of an

intention to confer the alleged benefit on the claimant (Cancer Research Campaign v Ernest Brown

[1997] STC 1425 (B.9.3 above); Littlewood v Wilkinson Woodward [2009] PNLR 29 (B.3 above);

Gibbons v Nelson [1999] Ch 326 (A.5 above).

In Cancer Research Campaign v Ernest Brown, for instance, it was alleged that the solicitor failed to

advise the testatrix to enter into a deed of variation of her brother’s estate in favour of certain

charities. This claim was rejected on the basis that no such duty was owed. However, Harman J also

rejected the claim on causation grounds. He said that he had almost no idea what the testatrix’s

reaction would have been had she been told that there was the possibility of reducing her

entitlement in her brother’s estate by means of a deed of variation. She might well have wanted to

retain her entitlement to protect herself against future contingencies.

Sometimes the position is that the client has, whether initially or later, been correctly advised, but

then chosen not to make any provision for the claimants (Sutherland v Public Trustee [1980] 2 NZLR

536, at B.8.3 above) or not made appropriate inquiries to remedy the position (Gorham v BT [2000]

1 WLR 2129, at E.6 above). In Gorham Mr Gorham had not made further inquiries when given the

correct advice (that he would be better off as a member of BT’s pension scheme) because he

erroneously believed that he was already a member of that scheme, having been misled by BT’s

literature. The chain of causation was broken because his belief was not reasonable and sensible in

the circumstances: he should have taken advice from BT to clarify the matter rather than relying on

his own misreading of ambiguous literature. This was, arguably, a harsh result, given that Mr

Gorham would not have found himself in the position of having to check on his rights but for

negligent advice given, in the first instance, by the defendant, Standard Life. Indeed, Stuart-Smith L.J.

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dissented on this point on the basis that Mr Gorham’s failure to make inquiries was not the sole

cause of the loss.

Even if the claimant has suffered loss which would not have been suffered but for the solicitor’s

negligence, it does not follow that such loss will be recoverable: the loss must be within the scope of

the solicitor’s duty from which the solicitor had assumed a responsibility to save the claimant from

harm (see Corbett v Bond Pearce [2001] PNLR 31, at C.5.5 above).

In Gibbons v Nelsons [2000] WTLR 453 Blackburne J concluded that, if there had been negligence in

respect of a Will made in 1986, the chain of causation would not have been broken by the testatrix

making some immaterial changes to the 1986 Will by a subsequent Will made in 1994. This was so

even though there was no negligence in 1994 in failing to spot the alleged defect in the 1986 Will.

G.3. Contributory negligence

Contributory negligence does not play an obvious part in a White v Jones claim. If, for instance, the

court has found that there has been a failure to supervise execution, the court will have found that

the solicitor’s negligence has been the cause of the defect. The solicitor is the expert on the law, not

the testator. If there has been unreasonable delay by the solicitor in preparing the Will, the fault will

usually lie with the solicitor, not the testator. If the testator consented to such delay, there will be no

breach of duty of the care owed to the beneficiaries by reason of such delay (Trusted v Clifford

Chance [2000] 1 WTLR 1219).

There may be cases where the negligence has been contributed to by the testator having given

inadequate instructions (see, for instance, Earl v Wilhem [2001] WTLR 1275). However, The Law

Reform (Contributory Negligence) Act 1945, s. 1(1) only applies where a person suffers damage

“partly of his own fault”. The claimants, in a White v Jones case, will be disappointed beneficiaries of

the client’s Will. They will not have been at fault, even if the testator was at fault, with the result

that the 1945 Act cannot apply. It was accepted by Stuart-Smith L.J. in Gorham v BT [2000] 1 WLR

2129 (see E.7 above) that the 1945 Act could not apply (see also Earl v Wilhem [2001] WTLR 1275 on

the similar wording of the Canadian statute on contributory negligence).

However, in Gorham Stuart-Smith L.J. observed that the remedy in White v Jones, was a judge-made

remedy, fashioned to meet the justice of the case. If, therefore, the courts are to fashion a remedy

to meet the justice of the case, they must take care that it is not made so as to involve injustice to

the defendant. This, he suggested, could be done by reducing the amount recoverable by the

claimants to take account of the negligence of the deceased which was a cause, but not the sole

cause, of the loss. He proposed that the damages should be reduced by 50%.

G.4. Mitigation

Where the claim is that, due to the solicitor’s negligence, the Will does not contain a gift to the

claimant in accordance with the testator’s instructions, the claimant may be required, by way of

mitigation, to take rectification proceedings to rectify the Will, pursuant to s. 20 of the

Administration of Justice Act 1982 (see B.7.3 to B.7.5 above).

Other instruments, including voluntary instruments, can, subject to the court’s discretion, be

rectified where, by mistake, they fail to reflect the true agreement between the parties. Rectification

may be appropriate in the case of an instrument of gift, or a settlement, which fails to benefit the

claimant (see E.3 above).

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A voluntary transaction may be set aside if the court is satisfied that the disponor did not intend the

transaction to have the effect that it did, so long as the mistake is as to the effect of the transaction

itself and not merely as to its consequences or the advantages to be gained by entering into it

(Gibbon v Mitchell [1990] 1 WLR 1304); or even where there is a mistake which is sufficiently serious

to render it unjust for the donee to retain the property given by the donor (Ogden v Trustees of the

RHS Griffiths 2003 Settlement [2008] WTLR 685).

As to whether the claimant should be required to mitigate by bringing proceedings under The

Inheritance (Provision for Family and Dependants) Act 1975, see G.2.5 above.

H. TRUSTS

H.1. Claim by trustees

Trustees are generally the proper claimants to recover losses suffered by beneficiaries of the trust,

including damages arising out of a professional claim. Indeed, the beneficiaries do not need to be

joined as claimants or defendants to a claim. White v Jones has no application to trusts. If the trust

has suffered loss due to the negligence of professional advisers, the trustees can sue to recover that

loss on behalf of the beneficiaries. There is no lacuna.

In Chappel v Somers & Blake [2003] 3 All ER 1076 (see D.1.2 and D.2.2 above) Neuberger J

considered that an executor was entitled to sue on behalf of the beneficiaries of the estate. He gave

the example of a bare trustee who seeks advice from a solicitor as to whether to distribute trust

property, where the right advice is that the property should be distributed as soon as possible,

because the income would attract a much lower rate of tax in the hands of the beneficiary than in

the hands of the trustee. If the solicitor delayed giving this advice for 5 years, Neuberger J

considered that it would be the trustee, and not the beneficiary, who would be entitled to sue the

solicitor for the extra tax paid during that period. It would be the trustee who was the client of the

solicitor, and it would be the trustee who had to pay the extra tax. The fact that it would be the

beneficiary who, in practical terms, lost the tax which was paid, and it was the beneficiary who, but

for the negligence of the solicitors, would have legally owned the trust property during the period

when the loss incurred, would not alter the fact that the appropriate claimant would be the trustee.

Neuberger J even considered (although he said that it was unnecessary to decide the point) that the

trustee should have a claim even in a case where the last instalment of extra tax was payable by the

beneficiary after distribution. Chappel was approved in the Court of Appeal in Shell UK v Total UK Ltd

[2010] EWCA Civ 180.

In Malkins Nominees Ltd v Societe Financiere Mirelis SA [2004] EWHC 2631 (Ch) Laddie J considered

that a trustee, just as much as an executor, could sue in tort to recover damages on behalf of the

beneficiaries on the basis that the trustee neither holds the property nor realises its value for

himself. He allowed a trustee to sue in the tort of conversion. However, he clearly considered that a

trustee could sue, in respect of a cause of action in negligence, as he expressly considered that his

decision was an extension of Chappel v Somers & Blake (which involved a negligence claim by an

executor).

H.2. Claim by beneficiaries in their own right

In Yudt v Leonard Ross & Craig (1998/99) ITELR 53 Ferris J held that a beneficiary of an existing trust

could sue a solicitor, who had given negligent advice to the trustees, for loss suffered by the

beneficiary. There was no contractual duty because the contract was between the defendants and

the trustees. It was argued on behalf of the defendant solicitor that no tortious duty of care arose. If

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a duty arose, it would be akin to the duty owed by a solicitor to a disappointed beneficiary under a

Will, as established in White v Jones. A feature of such liability is that there will be no remedy if the

duty is denied. However, in Yudt, it was argued, there would be a remedy: the trustees could sue in

respect of the duty owed to them and recover any loss to the trust fund.

Ferris J held that the special conditions of a White v Jones liability did not need to be satisfied in a

case where the claimants are beneficiaries under a disposition by way of trust made before the

negligent acts were committed. Such beneficiaries have a proprietary interest in the trust property.

If solicitors instructed by the trustees carry out their work negligently, thereby causing loss to the

trust property or putting that property or the interests of the beneficiaries in peril, the loss resulting

from such negligence will ultimately fall upon the beneficiaries, even if it is the trustees who incur it

in the form of a diminution of the trust property held by them or in the need to expend money to

protect the trust. By accepting instructions to act for the trustees the solicitors are of necessity

assuming to act, to the extent of the matters which they are instructed to deal with, in the affairs of

the beneficiaries as well. In such circumstances the solicitors owe to the beneficiaries the same

duties of care in tort as they owe to their clients, the trustees, in both contract and tort.

Ferris J did, however, concede that the position might be different where the claimant is a person

who has never become a beneficiary, e.g. a mere object of a fiduciary power vested in the trustees

which the trustees wish to exercise in his favour but fail to exercise because of the negligence of

solicitors instructed by them to draft the requisite instrument. Such a claimant might only succeed if

the relationship was of the special nature recognized in White v Jones.

This decision in Yudt is founded on the proposition that the cause of action in negligence is a

proprietary interest of the beneficiaries, where the negligence has been committed at a time when

the beneficiaries have existing interests. As such, it is in apparent conflict with Bradstock Trustee

Services Ltd v Nabarro Nathanson [1995] 1 WLR 1405 in which Judge Paul Baker Q.C. held that a

cause of action in tort for negligent advice could not be regarded as part of the trust property, from

the moment that the solicitors were first consulted, though doubtless any damages which may be

recovered would be. This is no doubt wrong: a cause of action in negligence can be an asset of the

trust (Royal Brunei Airlines v Tan [1995] 2 AC 378, at 391F).

In any event, if it is correct that a beneficiary can sue a solicitor directly for negligent advice given to

the trust, this does give rise to the risk of double liability, since the trustee can also sue. Also it

departs from the general rule that beneficiaries should only be allowed to bring an action (a

derivative action) if there are special circumstances (see H.5 below).

It has been suggested that beneficiaries should only be entitled to recover directly in tort losses

which they themselves suffer beyond the loss which they suffer by reason of the diminution in the

value of the trust fund (see Lewin on Trusts, 18th

Ed., para. 43-09). However, there is no indication in

Yudt of any such limitation. In any event, the problem of double liability may be solved if trustee is

joined as a party.

H.3. Bare trusts

In the case of a bare trust for a single beneficiary, the beneficiary may compel the trustee to sue on

giving him a proper indemnity. If the trustee refuses to sue, the beneficiary can, however, sue in his

own name joining the trustee as a defendant (Harmer v Armstrong [1934] Ch 65). Indeed, in Shell UK

v Total UK [2010] EWCA Civ 180 the Court of Appeal determined that there was no objection to a

claim by an equitable owner in tort provided that the defendant could reasonably foresee that his

negligent actions will damage the trust property, and the bare legal owner is also joined as a party so

as to prevent double liability.

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But where there are several beneficiaries, the trustee should not commence proceedings on behalf

of one of the beneficiaries without the consent of the other beneficiaries. If in doubt, the trustee

should apply to the court for directions.

H.4. Other trusts

Where the trustees are not bare trustees, the beneficiaries could commence proceedings pursuant

to CPR 64 to obtain an order directing the trustees to sue. The court may direct the trustees to sue,

or allow the beneficiary to sue in the name of the trustee. Alternatively, the beneficiaries may in

“special circumstances” bring a derivative action (see H.5 below).

H.5. Derivative action by beneficiaries

Alternatively, in “special circumstances”, the beneficiary may (without first making an application for

directions) be permitted to bring a derivative action, in which the beneficiary sues on behalf of the

trust, but in the name of the beneficiary. The general principle is that special circumstances embrace

a failure, excusable or inexcusable, by the trustees in the performance of the duty owed to the

trustees to the beneficiaries to protect the trust estate or to protect the interests of the

beneficiaries in the trust estate (Hayim v Citibank [1987] AC 730, at 748F-G). Therefore, where a

trustee commits a breach of trust or is involved in a conflict of interest and duty, or in other

exceptional circumstances, a beneficiary may be allowed to sue a third party in the place of the

trustee. But a beneficiary allowed to take proceedings cannot be in a better position than a trustee

carrying out his duties in a proper manner (Hayim v Citibank [1987] AC 730, at 747C).

There are a large number of cases in which the courts have considered whether “special

circumstances” existed. However, it is no longer necessary to cite these authorities, which are

merely applications of the general principle cited above in Hayim (Roberts v Gill [2009] 1 WLR 531,

para. 40). However, it is clear that a refusal by the trustees to sue will not in itself justify a derivative

claim by the beneficiaries (Re Field [1971] 1 WLR 555; Roberts v Gill, para. 42). Nor is it enough that

there is an asset that might be recovered by the trustees, but which, but for the action, will be lost.

The real issue is whether the trustees are acting unreasonably in refusing to sue on behalf of the

trust. A most material factor will be whether the court would order the trustees to sue in an

administration action: if so there is no need for the beneficiary to apply to court for permission to

sue, and then to commence the main action by separate proceedings (see Harmer v Armstrong

[1934] 1 Ch 65; Yeatman v Yeatman (1877) 7 Ch 210, at 215). The question of entitlement to sue

could be determined as a preliminary issue in the proceedings. However, in Re Field, the court had

declined to order the administrators of an estate to sue for the recovery of money paid to the

deceased’s widow (no doubt because of the speculative nature of the claim and the risk of costs).

Nonetheless, the deceased’s first wife subsequently obtained an order that she should be entitled to

sue in her own name. Goff L.J. held that there were special circumstances in that the only persons

interested in the estate were the first wife and the widow, and the widow had a personal interest in

the defeat of the action.

In Bradstock Trustee Services v Nabarro Nathanson [1995] 1 WLR 1405 trustees of a pension scheme

declined to continue to pursue a claim in negligence against the defendant solicitors, having received

advice that the costs of both sides might exceed the total assets of the scheme, and that they would

be exposed to personal risks as to costs. The trustees identified two beneficiaries who were entitled

to legal aid. The beneficiaries applied to be joined as claimants, substituting the trustees as

defendants. The application was dismissed primarily on the basis that the negligence claim was not

trust property, but also (obiter) on the grounds that the trustees had not acted unreasonably in

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refusing to sue (which would have put the fund at risk). The proposed action of the two

beneficiaries, who were legally aided, was not on behalf of all the beneficiaries, but solely for

themselves.

However, the fact that the beneficiaries, who are applying to be joined as claimants, are publicly

funded is not in itself a ground for disallowing their claim. That fact might be a ground for refusing

permission if there are other beneficiaries who could (but do not) bring the claim and who are not

publicly funded. Subject to that, a publicly-funded claimant should be entitled to bring a derivative

claim (Roberts v Gill, para. 43).

CHARLES HOLBECH

9 Stone Buildings

Lincoln’s Inn

April 2010