Category Archives: commercial disputes

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Whilst many of us are acutely aware of the threat to health that Covid-19 (Coronavirus) has brought in 2020, many of us are also aware of the threat it has brought to our companies and small businesses.

The business landscape of today amid the Coronavirus havoc shows a picture of uncertainty, due to reduced consumer/client engagement which has resulted in reduced profit margins and cash flow, with many companies simply unable to stay afloat. Continue reading

Causation in Professional Negligence Claims.

Causation in Professional Negligence Claims. As a firm of solicitors specialising in professional negligence claims, we deal with many clients who have suffered as a result of solicitors being negligent when dealing with their legal affairs.

The most common solicitor negligence cases we see relate, in the main to either civil litigation or property cases. Most clients understand the concept of negligence and believe that this is all they have to prove to be successful in a claim for professional negligence.

The one crucial aspect that we advise on in every case is what is known as Causation.

Causation is the key element you need to be able to establish if you are to win compensation from a solicitor in a professional negligence case.

In simple terms, this is proving that the negligence which has occurred has caused the loss that is being claimed. As with many areas of the law, this is not always as straightforward as many people initially believe. By using a couple of examples, I can hopefully give some insight into the issues which arise.

Let’s look at a property case.

A client instructed their solicitor in the purchase of a property that consisted of a substantial detached house together with a substantial area of additional land which was suitable for development. The client’s intention following the purchase was to live in the house, but also then to build a substantial detached house on the adjacent land.  The client’s solicitor did the legal work for the purchase and the transaction was completed. The client then obtained planning permission and started the building works on the new house to be built in the grounds. At that point, one of the neighbours threatened legal action as the proposed development was in breach of restrictive covenants which were attached to the land on which the building was taking place.

On taking legal advice it became clear that there were in fact these rights in favour of the neighbour which in reality meant that the site could not be developed as the client intended. It was clear that the solicitor who dealt with the purchase of the property had been negligent in failing to advise on the restrictive covenants in the title which restricted the ability to build on-site.

The client wanted to sue the solicitor for negligence. The client maintained that as a result of the negligence, he could not build a property for which he had planning permission. Had he been able to build the property, it would have been worth £500K, and after build costs, he would have made £250K in profit. At first glance, that seems to be a reasonable and sensible claim.

In this case, the solicitor admitted negligence but argued that they weren’t responsible for the loss of £250K as this was not caused by the negligence.  They maintained that the property was still worth what the client paid for it and regardless of the negligence, the client wouldn’t have been able to build on the land and in reality, the client had suffered no loss.

The easiest way of determining what losses have flowed from the negligence is to look at what should have happened had the solicitor not been negligent.

The question to ask is what would have happened had the solicitor advised about the restrictive covenant?

There are two potential answers to that question:

  • The first which is probably unlikely is that the client would have proceeded to buy the property regardless. If that is the option the client would have chosen, then there would be no loss.
  • The other alternative is that the client would have simply decided not to proceed as the property did not allow him to develop it. This is the more likely scenario.

In this case, the loss that had been caused by the negligence is the fact the client bought a property he would not otherwise have bought. The losses were the cost involved in buying and selling it, but not the loss of profit as he would never have been able to build on the land. The reason he could not make the profit was due to the fact there was a restriction and not due to the negligent act of the solicitor.

Another example in the field of litigation relates to building disputes.

A solicitor was instructed by a client to sue a builder who had constructed an extension for the client. The builder was a limited company and the client was suing for breach of contract as a result of significant defects in the extension. The claim was based on the costs to remedy the defects in the extension which were estimated at £20,000.00.  The solicitor wrote the necessary pre-action letter threatening a formal Court claim in the event the building company did not accept liability and agree to pay the remedial costs.

In response, the building company denied that the defects were substantial and maintained that they had offered to return and fix them, but the client had refused. Following receipt of that response, the solicitor simply sat on the case. About 6 months after the solicitor was instructed the building company went into liquidation which meant the client could not recover anything from the building company. The client claimed that the solicitor was negligent in not issuing proceedings before this happened.  The complicating fact, in this case, was the fact the building company had gone into liquidation. The solicitor accepted that he had been negligent in not issuing the proceedings, but claimed they were not responsible for any losses. They maintained that the reason the client had suffered a loss was due to the fact that the company had gone into liquidation and not as a result of their negligence.

As with the above example, we need to look at what should have happened had the solicitor not been negligent. In this case, had the proceedings been issued, they would not have been concluded prior to the company going into liquidation, and as such the client would have had no prospect of making a recovery. Oddly, in this case, the client was actually better off as a result of the negligence as he had not incurred the additional legal costs he would have incurred had the solicitor not been negligent.

Summary

In summary with regard to solicitors’ negligence in litigation cases, we need to look at the loss caused by the negligence.

If, in this kind of action, it is plain that the legal action could have been brought, and that if it had been brought that it must have succeeded, of course, the answer is easy. The damaged client would recover the full amount of the damages lost by the failure to bring the action originally.

On the other hand, if it can be made clear that the client would never recover, then it is equally plain that the answer is that he can get nothing but nominal damages for the solicitor’s negligence. As can be seen from the previous examples, most solicitor negligence cases involve complex issues with regard to Causation and in my view is the one thing that anyone contemplating bringing a claim should consider at an early stage.

We at Cohen Cramer have an experienced team of lawyers who are able to advise and guide you through this complex area.

We can help

To find the help you need get in touch with us today:

Causation in Professional Negligence Claims.

 

 

 

 

Michael McDonnell

Director and Head of Dispute Resolution

avoiding contractual pitfalls

Avoiding Contractual Pitfalls

Avoiding contractual pitfalls. In light of the fallout from the European Super League and the possible contractual implications for those teams which had signed up to the League and have since pulled out, we set out below five tips to ensure you are protected when it comes to contracting with another party.

An agreement may be required for anything from loaning money – whether commercially or to family/friends to agreeing to carry out a service in return for payment, for example, building an extension or decorating your home. Whatever the agreement, and no matter how formal or informal it may be, you should take steps to protect yourself in the event of fallout.

Verbal or Written – a contract can be formed whether verbally or in writing, however, it is always best to record the terms of the agreement in writing. This will help minimise any fallout should either party default on the agreement as you can refer to the contract terms as to how to deal with the breach. If a contract is made verbally, it will be difficult to prove what terms were agreed to then prove if that term has been breached.

Take professional advice – where possible, it is always best to take professional advice when drawing up a contract or agreement. A professional adviser can help incorporate terms into the contract to protect your position in the event a party doesn’t comply with the agreement.

Plan for the worst – whilst it can feel a bit awkward agreeing on what will happen in the event of fallout, it is easier to agree on what would happen whilst still on good terms. For example, should interest be charged on any unpaid sums?; do you have the right to withhold payment until defects are sorted?; can you terminate the contract without penalty? If these are discussed and agreed at the outset, in the event of a fall out you will be able to take speedier action to resolve the dispute.

Negotiate – a contract is normally for the benefit of all parties, whether that be paying a builder for their services to carry out work to your home, or loaning money in return for a payment in full with interest over a specified period. Having a clear agreement in which your interests are best protected on the best terms possible, means you shouldn’t shy away from negotiation. If it transpires at a later date that the agreement isn’t quite as beneficial as you thought, you are unlikely to be able to address this at a later date.

Due Diligence – we see time and time again people entering into agreements without carefully checking out the company or individual they are reaching an agreement with. Whilst it is not always easy to establish the financial position of the person you want to contract with, you should undertake as much research as possible to satisfy yourself that you are contracting with who they say they are; that they will be able to carry out the work you have paid for; or that any loaned sums can be repaid.

How we can help

We are often brought in to help clients at the point of the fallout of a contract. By taking into account the above steps, whilst we cannot guarantee you will not find yourself in the position of having to seek legal advice because a contract has been breached, it makes it easier to resolve any dispute if the above steps have been taken at the outset.

If you have any concerns over a contract or agreement you have entered into, about to enter into, or you are already at the stage where the contract has been breached and you are no longer benefitting from the contract, please get in touch on 0113 224 7808 or disputes@cohencramer.co.uk to discuss how we can help further.

 

Gemma Bowkett (Associate Solicitor) 5th May 2021

 

Avoiding contractual pitfalls

Bringing a claim against a professional for negligence.

If you have received poor, incorrect or inappropriate advice from a professional such as an architect, engineer, solicitor or accountant you may be entitled to make a claim for compensation.  You can claim for any financial loss caused by the negligence. This is known as a claim for professional negligence.

What you will need to show to sue your solicitor

There must be a breach of duty

To be successful with a claim you will need to show a breach of the duty of care; it is not enough to simply be unhappy with how the outcome.

Professional negligence is defined as a breach of the duty of care between professionals and their clients. The duty of care is the level of professionalism and standard of care one would expect from those holding themselves out in the position.

One of the most common errors made by solicitors is a failure to stick to the time restraints placed upon them. A failure to comply with court deadlines can lead to claims and actions being struck out. This will almost certainly be regarded as professional negligence. Another example may be where your structural engineer has put together incorrect calculations for your extension.

The breach must have caused you loss

If there is no loss, or the loss is capable of being rectified without any cost to you then you are unlikely to be successful in bringing a professional negligence claim.

The advice must be relevant to the profession

There must be a link between the advice and the professional providing the advice. If your dentist was to mention in passing that you may be able to bring a claim in relation to an injury that led to the dental work, they cannot be held accountable if no such claim exists. Likewise if your solicitor failed to advise you to go and see your dentist they cannot be sued if you later develop a dental condition.

How long do you have to bring a claim?

Claims for professional negligence are either based on breach of contract or negligence. You have six years from the date of the breach or the act of negligence. This is known as the primary limitation period.  If the negligence is not discovered until after the initial six-year period, it may be possible to bring a claim during the secondary limitation period, being three years from the date of knowledge of the breach or act of negligence.

Does it cost to bring a professional negligence claim?

If your claim has reasonable prospects of success (51% chance or more) then most solicitors will deal with your claim on a no win-no fee basis subject to undertaking a risk assessment. This means that, if you comply with the terms and conditions of your instructions, you won’t be charged for the work done on your behalf if the claim is unsuccessful (save for disbursements).

Most firms will ask for a non-refundable payment to cover the cost of an initial review of any existing documents relating to the claim.

If you or a friend or family member feel that they may have a claim for professional negligence get in touch with our disputes department on 0113 224 7808 or disputes@cohencramer.co.uk

Liability of an Approved building inspector under s1 of the Defective Premises Act 1972

The recent case of Heron’s Court v Heronslea & others [2018] EWHC 3309 (TCC) has highlighted the extent to which an approved building inspector can be liable for breach of duty under s.1 of the Defective Premises Act 1972 (“the Act”). In short, they are not liable, however, a more detailed consideration of the judgment reveals the reasons why.

The case facts

The Claimants were the Lessees and Management Company of Heron’s Court, a block of flats in Shenley Hill, Radlett. They brought a claim against the developer, main building contractor, the National House Building Council (“NHBC”) and NHBC Building Control Services (“BCS”). It is the claim against the BCS which is of concern to us here.

Under s1 of the Act ‘A person taking on work for or in connection with the provision of a dwelling owes a duty to see that the work which he undertakes is done in a workmanlike or professional manner, with proper materials so that the dwelling will be fit for habitation when completed’.

The alleged breaches

The Claimants alleged that there were 101 individual breaches of building regulations and that BCS was in part liable for them as it had taken on work ‘for or in connection with the provision of a dwelling’ which gave rise to a duty on them to ensure that the work done was done in a workmanlike or professional manner.

BCS applied to strike this claim out on the basis that the claim either disclosed no reasonable grounds for bringing the claim and/or that the claim was devoid of particulars to the extent that it amounted to an abuse of process.

The central point in dispute was whether an approved inspector fell within the scope of s1 of the Act as someone who was undertaking work ‘for or in connection with the provision of a dwelling’.

The Judge’s view

The Judge considered the role of an approved inspector as introduced by the Building Act 1984 and subsequent regulations. He then considered the specific wording of s.1 of the Act and the Law Commission report that was commissioned prior to the enactment of the Act. Having considered the pertinent paragraphs of that report the Judge went on to state at 31:

“It is, in my judgment, abundantly clear from the fair reading of those parts of the report, that the Law Commission considered that those who could fall within clause 1, other than builders, would be architects, designers, and those supervising the construction of the works on behalf of one of the building or designing parties. That is quite different from an inspector, whose essential function is not to contribute in any meaningful way to the design or construction of the building, but rather to certify simply whether that design or construction is lawful in a building sense, and that is the extent of the role.”

Review of Judgment

Of particular persuasiveness to the Judge’s conclusion was the decision of the House of Lords (as it then was) in Murphy v Brentwood District Council [1991] UKHL 2 in which their Lordships stated that the creation of a new area of responsibilities for local authorities (they were the only providers of building inspection at that time) was not a proper exercise of judicial power (i.e. it was a matter for Parliament to create such a new area of responsibility).

This case, therefore, clarifies the position that approved building inspectors do not fall within the scope of the Act and are therefore are not liable where work has not been carried out in a workmanlike or professional manner. Such a claim must be brought against the actual parties who carried out the work.

Robert Blair – Cohen Cramer 17/07/19

Tenant Fees Act 2019 and more

The Tenant Fees Act 2019 (“the Act”) came into force at the beginning of this month (June 2019). The act introduces a ban on various fees that had become the norm within the rental sector. Any tenancies entered into after 1 June 2019 will be subject to these new provisions. 

The government has released guidance for Landlords and Tenants.  Under the Act fees such as viewing, tenancy set-up, check out and third-party fees are now prohibited. 

There are still some fees which Landlords or their Agents will be able to charge to Tenants. This includes rent, deposit, holding the deposit, default fee, change to the tenancy or an early termination fee. All fees are subject to certain limitations which are set out in Schedule 1 of the Act.

Where a prohibited payment has been made, the Landlord is unable to use the section 21 eviction procedure until such time as the prohibited payment has been repaid in full to the Tenant.

Sanctions for breach of the Act

The following sanctions apply where a breach of the legislation has been committed[1]


The Act provides another layer of protection to Tenants against unruly Landlords. Given the current strain on resources which all Local Authorities are experiencing it will be interesting to see the level of enforcement.

Get the advice and help you need

Further recent changes also include the new mandatory Form 6A which is to be used for section 21 notices when seeking to recover possession of your Property. 

Also, a new version of the ‘How to Rent’ guide was published on 31 May 2019. This guide must be used for all new private assured shorthold tenancies or any replacement tenancies entered into where the original tenancy was made before 31 May 2019. If the incorrect version of the guide is given to Tenants’ then a section 21 notice cannot be served until they have been provided with the correct version.

[1] https://bit.ly/2IhvZt4

Robert Blair – Cohen Cramer Solicitors 14/06/19

Top Tips for Building Contracts

From a complete build to a new porch whatever your building project there is going to be some measure of hassle and upset; it is the nature of the beast but careful planning and preparation can reduce the aggravation and stress.

One of the more regular problems we encounter is problems and issues with the building contractor so before a sod is turned, a brink laid or a nail hammered you need to drill down in to your agreement with them.

Here are our top tips to make sure you get the build you agreed at the price you agreed.

1.      Put everything in writing. Everything means everything. If you have a meeting with your builder and variations or additions to your contract are agreed, follow this up with an email or text which sets everything out. If a dispute were later to arise and not everything was written down, then it would be the job of the Court to find as a matter of fact who to believe – this is determined by looking at the contemporary evidence, witness statements and cross-examination. Many barristers pride themselves on their ability to successfully undermined another parties case, if you have contemporary written evidence supporting your case, the chances of them being able to do that are greatly diminished.

2.      Check whether the builder has insurance. This will give you reassurance should any issues arise later on.

3.      Be clear on price. Many builders give estimates or quotes for the work. It is important to establish whether the price given is a fixed price or an estimate. If it is an estimate you may want to get the builder to give a more accurate quote or an estimate of what other work they foresee with the project so that you can budget accordingly.

4.      Be clear on the scope of the works. This is easily achievable by having everything set out in a written contract. However, if you do agree things verbally, make sure that it is very clear what you have asked for, otherwise you may get a lot more (and pay a lot more) than you bargained for.

5.      Know your rights. Getting advice early is important. If you are unsure as to your rights, are in dispute with a builder, or are having problems with a new build property, then get in touch at:

7th August 2018