KSL ATP 2013 PE Topic 14 Professional Negligence.pdf

KSL ATP PE PROFESSIONAL NEGLIGENCE

CHARLES B G OUMA & EUNICE ARUWA

ADJUNCT FACULTY KSL ATP 2013

Topic Content 1. Definition

2. Requirements

3. Constitutional basis

4. Source of the obligation

5. Standard of care

6. Mistake

7. The case for Immunity

8. The case against immunity

9. Professional Indemnity

Statutory provisions

Section 46 invalid agreements

Advocates (Professional indemnity) Regulations 2004

Consumer protection Act

Article 46 CoK 2010

Case Law

1. Heaven v Pender (1883) 11 QBD 503

2. Derry v Peek (1889) LR 14 App Cas 337

3. Nocton v Lord Ashburton [1914] AC 932

4. Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465

5. Henderson v Merrett Syndicates Ltd [1994] 2 AC 145

6. Mbogo V Shah (1967)EA 116

7. White v Jones [1995] 2 AC 207

8. Trust bank V Portway Stores (1997)LLR 1197(CCK)

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Case Law

1. Munster v Lamb. said ([188185] All ER Rep

2. Fletcher & Son -v- Jubb, Booth & Helliwel [1920] 1 KB 275

3. Myers -v- Elman [1940] AC 282; [1939] 4 All ER 484 1939 HL

4. Allen -v- Alfred MacAlpine and Sons Ltd [1968] 2 QB 259; [1968] 1 All ER 543 1968 CA

5. Rondel vs Worsely 1969 HL)

6. Polk County v. Dodson, 454 U.S. 312 (1981) 454 U.S. 312

7. Arthur J.S Hall and Co. v Simons (2000) 3 AER 673

8. Giannrelli v Wraith (1988) 165 CLR 543

9. Kettlemen vs. Hansal Properties Ltd 1988 1 ALLER 38


Case Law

Air Alfaraj Ltd VS Raytheon Aircraft Credit Corporation & anor 2000 KLR 315

Champion Auto Spares vs Phadke & ors 1969 EA 42

East African Foundry Works (K) Ltd vs. KCB 2002 (2) KLR 443

Omwoyo vs. AH & P Co Ltd 2002 1 KLR 68

Kogo vs Nyamogo & Nyamogo CA CA 53 OF 2003 2003 EKLR

Flavio Rodriguez vs Apollo Insurance Co Ltd

Part 1

Definition

Definition

Negligence may be defined as an act or omission which constitutes a breach of a duty of care owed to another person by the person who acts or fails to act and which causes that other person to suffer harm.

Definitions

There are three elements which the client (plaintiff) must establish if he wants to succeed.

that there was a duty of care owed by an Advocate.

that there was a breach of that duty by an Advocate (the defendant).

that the breach of the Advocate's duty caused loss or damage to the client.

Definition

In the English law of tort, professional

negligence is a subset of the general rules on negligence to cover the situation in which the defendant has represented him or herself as having more than average skills and abilities

From Wikipedia

Part 2

Requirements

Requirements

1. Duty of care situation

2. Foreseability

3. Proof that defendants conduct was careless

4. Causal connection between defendants carelessness and damage

5. Extent of damage attributable to defendant

6. Monetary estimate of that damage

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Part 3 Constitutional Basis

Constitutional Basis

Consumer protection- Article 46 of the Constitution

State to ensure access to justice- Article 48

Right of accused persons to choose their advocates-Article 50 (g)

State to appoint advocate for accused if substantial justice would occur otherwise- Article 50 (h)

Part 3

Source of the obligation


1. Duties in contract- the client is purchasing legal services, its a consumer protection issue. The advocate warrants that he possesses the competence to offer the services

2. Duties in tort- the law has placed the client in the hands of the lawyer and the client is totally dependent on the expertise of the lawyer


Duties of a fiduciary- an element of tort. A fiduciary is depended on by another.

Statutory obligation- eg Advocate practice rules provide minimum service standards

Part 3 : Section 1

Liability in Tort

Hedley Byrne & Co Ltd v Heller & Partners

Ltd (1964) AC 465

Where a person is so placed that others could reasonably rely upon his judgment or his skill or upon his ability to make careful inquiry, and a person takes it upon himself to give information or advice to, or allows his information or advice to be passed on to, another person who, as he knows or should know, will place reliance upon it, then a duty of care will arise."

Caparo Industries plc. v Dickman (1990) 2 AC 605

The criteria for a duty of care in giving advice were stated in more restricted terms "What can be deduced from the Hedley Byrne case, therefore, is that the necessary relationship between the maker of a statement or giver of advice (the adviser) and the recipient who acts in reliance on it (the advisee) may typically be held to exist where four conditions exist

Caparo:Condition 1 and 2

The advice is required for a purpose, whether particularly specified or generally described, which is made known, either actually or inferentially, to the adviser at the time when the advice is given

the adviser knows, either actually or inferentially, that his advice will be communicated to the advisee, either specifically or as a member of an ascertainable class, in order that it should be used by the advisee for that purpose

Caparo: Condition 3 and 4

It is known, either actually or inferentially, that the advice so communicated is likely to be acted on by the advisee for that purpose without independent inquiry and

It is so acted on by the advisee to his detriment.

White v Jones [1995] 2 AC 207

In this case, which was only carried by a 3:2 majority, a solicitor was told to draw up a new will, splitting the testator's estate between the two plaintiffs, his daughters. He negligently failed to do this by the time of the testator's death, and the estate passed in accordance with the testator's wishes expressed in a previous will.


The daughters sued the solicitor in negligence. It was held that the solicitor had assumed a special relationship towards them, creating a duty of care which he had carried out negligently, and therefore had to indemnify them for their loss. Once again this extended Hedley Byrne liability to a proximate third party.

Part 3: Section 2

Liability in Contract

Contractual liability

In principle, the tortious liability runs in parallel to liability in contract. Subject to the rules of privity of contract, one who has entered into a contract can sue or be sued on the contract which will set out the terms of the service to be provided by the professional person, and if there is no express term to this effect, there will be an implied term that the service will be performed with reasonable care and skill

Henderson v Merrett Syndicates Ltd [1994] 2 AC 145

This case concerned the near collapse of Lloyd's of London when hurricanes in America devastated its property holdings. It called upon its "Names" (the shareholders) to indemnify them for its losses.

The Names sued the shareholding company for mismanagement and negligence

Henderson v Merrett Syndicates Ltd [1994] 2 AC 145

It was held that Merrett Syndicates was liable to both types of shareholders, as there was enough foreseeability to extend pure economic loss liability to "un-proximate" third parties.

The major significance here was, however, the allowance of claims in both contract and tort, which blurred the divide between the two.

Some of the first party Names claimed in contract to overcome the three-year limit in which an action must be taken in tort.

Part 3 Section 3

Liability to proximate third parties


In this case, which was only carried by a 3:2 majority, a solicitor was told to draw up a new will, splitting the testator's estate between the two plaintiffs, his daughters. He negligently failed to do this by the time of the testator's death, and the estate passed in accordance with the testator's wishes expressed in a previous will.


The daughters sued the solicitor in negligence. It was held that the solicitor had assumed a special relationship towards them, creating a duty of care which he had carried out negligently, and therefore had to indemnify them for their loss. Once again this extended Hedley Byrne liability to a proximate third party.

Prospective vs. Actual client

Togstad v. Vesely, Otto, Miller & Keefe, 291 NW 2d 686 - Minn: Supreme

The duties to a prospective client are no less than the duties to an actual client


Part 3: Section 4

Liability of a fiduciary

Nocton v Lord Ashburton [1914] AC 932

Lord Ashburton was buying a property for 60,000 on Church Street, Kensington, London.

His solicitor was Mr. Nocton. Mr. Nocton advised Lord Ashburton to release part of the mortgage security.

This was a bad idea, because as Mr. Nocton in fact knew, this meant that the security would become insufficient.

Lord Ashburton alleged the advice was not given in good faith, but rather in Mr. Nocton's self interest.

Hendry vs Pelland US Court of Appeal for

the DC 1996 An action for a breach of a fiduciary duty should be a

more frightening proposition to an advocate than a typical malpractice action which require proof of harm Recognizing this barrier to legal malpractice claims, more and more plaintiffs are pursuing claims for breach of a lawyers fiduciary duties along with, or instead of, legal malpractice claims. A breach of fiduciary duty claim carries a distinct advantage for a plaintiff: Often, the plaintiff need not show that the breach of duty harmed him in any way

Part 3 Section 5

A statutory obligation

Section 46(b) Illegal Agreements

S 46 (b) any agreement relieving any advocate from responsibility for professional negligence or any other responsibility to which he would otherwise be subject as an advocate; or


The Advocates Act

S46 of the advocates act outlaws agreements absolving advocates from liability for negligence. By necessary implication the statute presupposes the existence of a duty not to be negligent

Advocates (Professional indemnity) Regulations 2004 require advocates to take out mandatory professional indemnity insurance cover. The object of this requirement is to guarantee clients protection against negligent conduct by advocates

Part 4

The Standard of Care

Fletcher & Son -v- Jubb, Booth & Helliwel

[1920] 1 KB 275

Scrutton LJ said: "it would be extremely difficult to define the exact limit by which the skill and diligence which a solicitor undertakes to furnish in the conduct of a case is bounded, or to trace precisely the dividing line between that reasonable skill and diligence which appears to satisfy his undertaking, and that crassa negligentia, or lata culpa mentioned in some of the cases, for which he is undoubtedly responsible. It is a question of degree and there is a borderland within which it is difficult to say whether a breach of duty has or has not been committed."

Champion Auto Spares vs Phadke & ors 1969 EA 42

No Liability for reasonable error of judgment or for ignorance of some obscure point of law but for an act of gross negligence or ignorance of some elementary matters of law constantly arising in practice


Kogo vs Nyamogo & Nyamogo C.A C.A 53

OF 2003 2003 EKLR

It is not the duty of the advocate to help the appellant in gathering evidence with which to prove his case


Part 5

Mistake


Mistakes of advocates

Generally will not be visited on the client if he is if the mistake is in good faith , the client is blameless and no prejudice that cannot be compensated in costs will be occasioned

But clients should not over rely on the mistakes of their advocates

The courts consider whether the mistake was genuine or excusable.

Ger vs Marmannet Forest Coop & Credit Society Ltd 1987 KLR 543

Kiarie vs Njoroge 1986 KLR 202

Nzoia Sugar Co v Fungutuku 1986 KLR 295


Kettlemen vs. Hansal Properties Ltd 1988 1 ALLER 38 at 62

Litigation must be conducted efficiently

That includes allowing the consequences of negligence to fall on the head of solicitors


Omwoyo vs. AH & P Co Ltd 2002 1 KLR 68

The courts cannot afford the luxury of entertaining the negligence of advocates in litigation

The time has come when advocates must bear the consequences of their mistakes

Trust Bank V Portway Stores (1997)LLR 1197 (CCK)

Ringera J If acts or omissions of other agenst with actual or ostensible authority in other spheres of life are not without consequence on their principals, why should it be different in the legal profession?

Part 6

The case for immunity


The case for immunity The first relates to the special role of the advocate

and the potential impact on the administration of justice. Advocates duties as an officer of the court would be impaired the threat of law suits by disgruntled clients

The second relates to the negative effect on the administration of justice if issues were relitigated and court decisions subject to collateral attack

The third relates to the cab rank rule. It is unfair to compel to act if there is a potential for being sued by the client


Munster v Lamb ([188185] All ER Rep

A solicitor was sued for defamatory words which he had spoken while defending an accused person

Held; an absolute immunity applies


Munster v Lamb. said ([188185] All ER Rep

Sir Baliol Brett MR at p 792, letter c; (1883), 11 QBD at p 599

To my mind it is illogical to argue that the protection of privilege ought not to exist for a counsel, who deliberately and maliciously slanders another person. The reason of the rule is, that a counsel who is not malicious and who is acting bona fide may not be in danger of having actions brought against him.



Fry LJ dealing with the analogous cases of judges and witnesses said ((1883), 11 QBD at p 607, [188185] All ER Rep at p 797):

The rule of law exists, not because the conduct of those persons ought not of itself to be actionable, but because if their conduct was actionable, actions would be brought against judges and witnesses in cases in which they had not spoken with malice, in cases in which they had not spoken with falsehood



It is not a desire to prevent actions from being brought in cases where they ought to be maintained that has led to the adoption of the present rule of law: but it is the fear that if the rule were otherwise numerous actions would be brought against persons who were merely discharging their duty. Fry LJ ibid



It must always be borne in mind that it is not intended to protect malicious and untruthful persons, but that it is intended to protect persons acting bona fide who under a different rule would be liable, not perhaps to verdicts and judgments against them but to the vexation of defending actions. Per Fry J Ibid


SALMON LJ: in Rondel vs. Worsely In the Court of Appeal

The Bar has traditionally carried out these duties, and the confidence which the Bench is able to repose in the Bar fearlessly to do so is vital to the efficient and speedy administration of justice.


SALMON LJ: in Rondel vs. Worsely In the Court of Appeal

Otherwise the high standard of our courts would be jeopardised. This is the real reason why public policy demands that there should be no risk of counsel being deflected from their duty by the fear of being harassed in the courts by every litigant or, criminal who has lost his case or been convicted.


Lord Reid Rondel vs Worsely 1969 HL

The argument before your lordship has been directed to the general question of barristers liability and has ranged widely. For the appellant it was said that all other professional men, including solicitors, are liable to be sued for damages if loss is caused to their clients by their lack of professional skill or by their failure to exercise due care; so why should not barristers be under the same liability.



For the respondent it has been shown that for at least two hundred years no judge or text writer has questioned the fact that barristers cannot be so sued, and a variety of reasons have been adduced why the present position should continue



It is, I think, clear that the existing rule was

based on considerations of public policy; but public policy is not immutable and doubts appear to have arisen in many quarters whether that rule is justifiable in present day conditions in this country. So it appears to me to be proper to re-examine the whole matter


Should advocates be granted immunity?

Lord Morris Of Borth-Y-Gest: in Rondel vs. Worsely :

The quality of an advocates work would suffer if, when deciding as a matter of discretion how best to conduct a case, he was made to feel that divergence from any expressed wish of the client might become the basis for a future suggestion that the success of the cause had thereby been frustrated



Lord Morris Of Borth-Y-Gest: in Rondel vs. Worsely : [In the Court of Appeal

In my view, the public advantages [of the immunity] outweigh the disadvantages. They do so overwhelmingly in respect of criminal cases and considerably so in respect of civil cases


Per Lord Pearce Rondel vs Worsely (1969) HL

Is one, then, to compel counsel to advise or to defend or conduct an action for such a person who, as anybody can see, is wholly unreasonable, has a very poor case, will assuredly blame some one other than himself for his defeat and who will, if it be open to him, sue his counsel in order to ventilate his grievance by a second hearing, either issuing a writ immediately after his defeat or brooding over his wrongs until they grow greater with the passing years and then issuing the writ nearly six years later (as in the present case.


Per Lord Pearce Rondel vs Worsely (1969) HL

I think it is right to say that the barristers immunity from liability for professional negligence in the conduct of litigation is an exception from a general rule of professional liability. It is based on public policy. On order to show the recognised basis and scope of the exception, I will cite some passages from authoritative judgments. . Per Lord Pearce Rondel vs Worsely (1969) HL


Giannarelli v Wraith (1988) 165 CLR 543

Giannarelli confirmed by a 4:3 majority the existence of the advocates immunity from suit for in-court work.

Not surprisingly, this decision has been criticised, particularly by those professionals who contrast the imposition upon them of ever more stringent obligations of care with the immunity accorded by the law to its own


Allen -v- Alfred MacAlpine and Sons Ltd [1968] 2

QB 259; [1968] 1 All ER 543 1968 CA

The court described the peculiarly difficult

position of a solicitor sued for the negligence of losing litigation for his client by reason of having his client's claim struck out: "It is true that if the action for professional negligence were fought, the court which tried it would have to assess what those chances were

Part 7

The case against Immunity

Arthur J.S Hall and Co. v Simons (2000) 3 AER 673

The lords re-evaluated the public policy issues. The critical factor was the duty of a barrister to the court under ss27(2a) and 28(2A) courts and legal services act 1990 (inserted by s42 access to justice act 1999).

The question was whether the immunity is needed to ensure that barristers will respect their duty to the court


Arthur J.S Hall and Co. v Simons

(2000) 3 AER 673 ? In 1967, the answer was that assertions of

negligence would tend to erode this duty and accorded a special status to barristers. Nowadays a comparison with other professionals demonstrated that barristers' immunity against being sued in negligence was anomalous


Arthur J.S Hall and Co. v Simons

(2000) 3 AER 673 Allowing civil action as unlikely to produce a

flood of claims and, even if some claims did emerge, a claimant alleging that poor advocacy resulted in an unfavorable outcome would face the very great difficulty of showing that a better standard of advocacy would have resulted in a more favorable outcome. Unmeritorious and vexatious claims against barristers are simply struck out


Arthur J.S Hall and Co. v Simons (2000) 3 AER 673

Thus, it was no longer in the public interest that the immunity in favour of barristers should remain in either civil or criminal cases.

This did not imply that Rondel v Worsley was wrongly decided.

But in today's world, that decision no longer correctly reflected public policy. The basis of the immunity of barristers has gone.


Rationale for no immunity

Other professionals dont have immunity

The danger to advocates as officers of the court was probably overstated

The danger to the administration of justice was probably overstated

The demand for immunity longer reflects public policy


Part 8

Professional Indemnity


Requirement of professional indemnity insurance

2. (1) Every advocate practising on his own behalf shall purchase a policy of insurance (in these Regulations referred to as the professional indemnity cover) the value of which shall be not less than three million shillings

4. No practising certificate shall be issued to an advocate to whom these regulations apply, unless the requirements in paragraph (2) are complied with.


Purpose of indemnity insurance

3. The professional indemnity cover shall be used in the compensation of clients for loss or damage from claims in respect of any civil liability or breach of trust by the advocate or his employees

5. Nothing in these Regulations shall be taken to preclude any agreement between an advocate or a firm of advocates and a client in respect of any

insurance cover as may be deemed appropriate.


END OF PRESENTATION: THANKS FOR YOUR KIND ATTENTION

QUESTIONS OR COMMENTS WELCOME

CHARLES B G OUMA &EUNICE ARUWA FACULTY KSL ATP 2013

Documents

KSL ATP 2013 PE Topic 14 Professional Negligence.pdf