The risks inherent in a solicitor witnessing a client’s transaction are brought home in a case where the Master of the Rolls ordered the retrial of a professional negligence case in which a solicitor was alleged to have failed to ensure his client fully understood the nature of the documents.

In 2003 a client visited a solicitor for advice and whether she should give up her interest in her family home to help repay the victim of her husband’s fraudulent behavior.  She was briefly seen by a junior lawyer who advised against the transaction.  Subsequently she met a senior associate at the same firm who signed off the transaction.

The client subsequently lost her home, her interest in certain endowment policies, shares and pensions.  She sued for negligence claiming her solicitor had failed to advise her properly.

The first trial was halted on the first day of a three day hearing after the judge decided there was no case to answer, however a Court of Appeal Panel chaired by Lord Neuberger, Master of the Rolls ordered a retrial after deciding there were concerns over this decision.

In particular, the Court of Appeal panel ruling found that that the solicitor had done more than simply act as a witness to the transaction, “given that the claimant’s husband took the claimant to a solicitor to witness their signatures on the four documents, and to give the certificate, a judge may well conclude that it was likely that a competent solicitor would have ensured that he understood the basic nature of the transaction contained in the four documents.”

A report on the case was published in The Lawyer, here.

The case highlights the importance for solicitors to follow effective risk management procedures when undertaking even routine transactions.  Brunel provides risk management services to solicitors as part of its professional indemnity insurance broking service.