Red Flag Legal Practitioners

In the Federal Court of Australia Finkelstein J stated in Fitzwood Pty Ltd v Unique Goal Pty Ltd (In liquidation) [2001] FCA 1628 at [148]:

148 First, as a general rule, a solicitor will owe a duty of care to his client, but not to the other parties with whom his client is dealing in the relevant transaction: Hill v Van Erp [1997] HCA 9; (1997) 188 CLR 159, 236-237. Second, a solicitor, like any other professional person, may owe a person other than his client a duty of care. In Hedley Byrne & Co Ltd v Heller & Partners Ltd [1963] UKHL 4; [1964] AC 465 at 502-3 Lord Morris said:

“… if someone possessed of a special skill undertakes, quite irrespective of contract, to apply that skill for the assistance of another person who relies upon such skill, a duty of care will arise.”


Perhaps this puts the matter too broadly. To establish the existence of a duty of care at common law the plaintiff must show, not only the foreseeability of harm flowing from the act or failure to act as alleged, but also that the solicitors ought to have realised that they were being trusted to give advice as a basis for action on the part of the plaintiff: Beach Petroleum NL v Abbott Tout Russell Kennedy [1999] NSWCA 408; (1999) 48 NSWLR 1.

171 Third, it is unlikely that a duty will arise in favour of a third party, when the third party’s interests are in opposition to those of the solicitor’s client: Waimond Pty Ltd v Byrne (1989) 18 NSWLR 642, 659; Kamahap Enterprises Ltd v Chu’s Central Market (1990) 64 DLR (4th) 167. On the other hand, where there is an identity of interest between the solicitor’s client and that of the third party, and the solicitor knows that his advice will be acted upon by both the client and the third party without any independent legal advice, there is good reason to impose the duty.

The High Court of Australia in  Hill v Van Erp [1997] HCA 9; (1997) 188 CLR 159; (1997) 142 ALR 687; (1997) 71 ALJR 487 stated:

Generally speaking, however, a solicitor’s duty is owed solely to the client subject to the rules and standards of the profession { See White v Jones [1995] UKHL 5; [1995] 2 AC 207 at 223.}. That is because the solicitor’s duty is to exercise professional knowledge and skill in the lawful protection and advancement of the client’s interests in the transaction in which the solicitor is retained and that duty cannot be tempered by the existence of a duty to any third person whose interests in the transaction are not coincident with the interests of the client. But the interests of a client who retains a solicitor to carry out the client’s testamentary instructions and the interests of an intended beneficiary are coincident.

Most testators seek the assistance of a solicitor to make their intentions effective. The very purpose of a testator’s retaining of a solicitor is to ensure that the testator’s instructions to make a testamentary gift to a beneficiary results in the beneficiary’s taking that gift on the death of the testator. There is no reason to refrain from imposing on a solicitor who is contractually bound to the testator to perform with reasonable care the work for which he has been retained a duty of care in tort to those who may foreseeably be damaged by carelessness in performing the work. The terms of the retainer determine the work to be done by the solicitor and the scope of the duty in tort as well as in contract. A breach of the retainer by failing to use reasonable care in carrying the client’s instructions into effect is also a breach of the solicitor’s duty to an intended beneficiary who thereby suffers foreseeable loss. If the solicitor’s carelessness results in the loss of a testamentary gift intended to be given to a beneficiary, “it is eminently fair, just and reasonable that the solicitor should be liable in damages to the intended beneficiary“, as Sir Donald Nicholls V-C said in White v Jones { [1995] UKHL 5; [1995] 2 AC 207 at 224; see also at 232-233 per Farquharson LJ; at 236, 238 per Steyn LJ.}. Not only is the remedy of damages effective to compensate the beneficiary; it is necessary to enforce the duty owed to the client. “Otherwise”, as the Vice-Chancellor said, “there is no sanction in respect of the solicitor’s breach in his professional duty.”

The reason for engaging a solicitor to make a will is to confer benefits upon the beneficiaries. As Nicholls V-C said in the Court of Appeal in White v Jones [1995] UKHL 5; [1995] 2 AC 207 at 222.:

The very purpose of the employment of the solicitor is to carry out the client’s wish to confer a particular testamentary benefit on the intended beneficiary. There is no other purpose.

Thus, when a solicitor accepts responsibility for carrying out a client’s testamentary intentions, he or she cannot, in my view, be regarded as being devoid of any responsibility to an intended beneficiary. The responsibility is not contractual but arises from the solicitor’s undertaking the duty of ensuring that the testator’s intention of conferring a benefit upon a beneficiary is realised. In a factual, if not a legal sense {See White v Jones [1995] UKHL 5; [1995] 2 AC 207 at 273-274 per Lord Browne-Wilkinson}, that may be seen as assuming a responsibility not only to the testatrix but also to the intended beneficiary.

As Megarry V-C observed in Ross v Caunters  [1980] Ch 297 at 322 the duty to the intended beneficiary “far from diluting the solicitor’s duty to his client, marches with it, and, if anything, strengthens it“.

Policy considerations also favour the recognition of a duty of care on the part of solicitors in cases such as the present. As Lord Browne-Wilkinson pointed out in White v Jones, the proper transmission of property from one generation to the next is, as a general rule, “dependent upon the due discharge by solicitors of their duties{[1995] UKHL 5; [1995] 2 AC 207 at 276} The same point was made by Cooke J in Gartside when he observed that “[i]n practice the public relies on solicitors (or statutory officers with similar functions) to prepare effective wills.

A further and more pragmatic consideration in favour of the recognition of a duty of care on the part of solicitors is that, as a result of the decision in Watts v Public Trustee for Western Australia {[1980] WAR 97. See also Finlay v Rowlands, Anderson & Hine [1987] TasR 60 where Ross v Caunters [1980] Ch 297 was accepted as correct} a remedy has been allowed to intended beneficiaries in Western Australia for several years, apparently without problem. A similar consideration was taken into account in White v Jones {[1995] UKHL 5; [1995] 2 AC 207 at 255} it being observed by Lord Goff of Chieveley that the decision in Ross v Caunters had been applied in the United Kingdom for 15 years without apparent problems in practice.

Lord Browne- Wilkinson in White v Jones  1 All ER 691, [1995] 2 AC 207, [1995] 2 WLR 187, [1995] UKHL 5 stated:

“Moreover there are more general factors which indicate that it is fair
just and reasonable to impose liability on the solicitor. Save in the case of
those rash testators who make their own wills, the proper transmission of
property from one generation to the next is dependent upon the due discharge
by solicitors of their duties. Although in any particular case it may not be possible to demonstrate that the intended beneficiary relied upon the solicitor,
society as a whole does rely on solicitors to carry out their will making
functions carefully. To my mind 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. It is only just that the intended beneficiary
should be able to recover the benefits which he would otherwise have

Abel v Sate Trustees Limited [2012] VSC 425

Astley v Austrust Ltd [1999] HCA 6: 197 CLR 1; 161 ALR 155;73 ALJR 403

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