Colleagues might be interested in a couple of fairly recent first instance decisions in Scotland around this topic Steven v Hewats [2013] CSOH 61; 2013 SLT 763; [2013] PNLR 22; 2013 Rep LR 90 and Milligan's Excrs v Hewats [2013] CSOH 60; 2013 SLT 758; [2013] PNLR 23.

The decisions are linked in that they arise from the same facts. The case [2013] CSOH 61 involved the alleged negligence of solicitors during a botched conveyance of land in accordance with an elderly lady's intention to make a lifetime gift to the donee/beneficiary. The initial conveyance in 1997 was botched, and therefore another had to be executed and registered in 2006. The lady died in 2008. As a result of the error the need for a second conveyance meant that the transaction attracted liability for IHT. The beneficiary raised an action on the basis that but for the solicitor's error she would have received the gift without liability for the IHT, and that the solicitor owed her a duty of care as a potential donee. The defender resisted the claim on the express ground that to allow recovery would be an unwarrantable extension of the principle in White v Jones. The Lord Ordinary (Tyre) held that this situation was within the principle in White v Jones, in particular the question was one of the assumption of responsibility (para 11). Therefore, because the question is primarily one of assuming responsibility, it is possible to assume responsibility for people beyond the testator/donor and that the principle is not limited to testamentary provisions and might apply to lifetime gifts. Lord Tyre explained (at paras 12–13) his decision on the basis of Lord Goff's comments in White:

"[12] There is, in my opinion, no reason why inter vivos gifts should not be capable of falling within the scope of the White v Jones principle. I find the following passage from Lord Goff's speech instructive in this regard: “Let me take the example of an inter vivos gift where, as a result of the solicitor's negligence, the instrument in question is for some reason not effective for its purpose. The mistake comes to light some time later during the lifetime of the donor, after the gift to the intended donee should have taken effect. The donor, having by then changed his mind, declines to perfect the imperfect gift in favour of the intended donee. … I for my part do not think that the intended donee could in these circumstances have any claim against the solicitor. It is enough, as I see it, that the donor is able to do what he wishes to put matters right. From this it would appear to follow that the real reason for concern in cases such as the present lies in the extraordinary fact that, if a duty owed by the testator's solicitor to the disappointed beneficiary is not recognised, the only person who may have a valid claim has suffered no loss, and the only person who has suffered a loss has no claim” (p.262).
This passage seems to me to make clear that what matters, so far as the principle is concerned, is not whether the gift is testamentary but rather whether the consequences of the negligent act are capable of being rectified by the solicitor's client. Only if they are not does the concern underlying the principle arise.
[13] The position of a donee may, however, differ from that of a testamentary beneficiary in one respect. The testamentary beneficiary will inevitably be an entirely passive recipient of benefit. A donee may or may not be a passive recipient. The question then arises of whether the existence of a transactional element in a lifetime gift takes it outwith the scope of the White v Jones principle. In my opinion the answer to that question will vary according to circumstances. The test, in my view, is still the same, namely whether the donor's solicitor can be held to have assumed responsibility towards the recipient of the gift. In some cases the existence of a conflict of interest between donor and donee may afford an indication that there has been no such assumption of responsibility. I do not, however, consider that a hypothetical possibility of a conflict of interest arising is necessarily sufficient in itself. "

Therefore the Lord Ordinary decided to order a proof before answer (i.e. the averred facts had not yet been proven), but he was content that as a matter of law it would be possible to recover.

The case reported at [2013] CSOH 60 is an action brought by the executors in relation to the same botched conveyance. This raised a different point: could the executor sue for a loss sustained by the estate after the death of the deceased. Because the IHT liability would not generate a loss until the lady died the question was whether there was any claim which could pass to the executor. Lord Tyre was dubious whether there could be an action in the circumstances, and was mindful of the potential danger of double recovery for the same loss (executor and beneficiary claiming) but given the close substantive and procedural links to the other case he did not make a final determination.

Best wishes,

Dan


Dr Daniel Carr | Lecturer in Private Law

dan.carr@ed.ac.uk | +44(0)1316502804





________________________________________
From: Gerard Sadlier <gerard.sadlier@gmail.com>
Sent: 28 July 2015 09:47
To: Neil Foster
Cc: obligations@uwo.ca
Subject: Re: ODG: Duty of care to beneficiary to advise re TFM application

Dear Neil,

On your suggestion that the solicitors might owe a duty to the family
members excluded from the will, see on a related point the decision of
the High Court in Ireland in Rojack v. Taylor & Anor [2005] IEHC 28.

http://www.bailii.org/ie/cases/IEHC/2005/H28.html

There, a daughter of the testatrix claimed that the solicitor who had
prepared her mother's will and acted advisers to the executors (one of
whom was the Plaintiff) had a duty to advise her that she could bring
an application for greater provision from the testatrix's will under
Section 117 of the (Irish) Succession Act 1965 - or that she should
seek independent legal advice concerning her right to do so.

The Court was clear in holding that there was no such duty.

I think that ruling was right - though I guess that if you wanted to
undermine the decision's precedential value, you would point out that
the Court was entirely satisfied that no additional provision was due
to the Plaintiff in any event, having concluded that the testatrix had
treated her with the greatest kindness throughout, in what had proved
difficult circumstances at times.

Kind regards

Ger

On 7/28/15, Neil Foster <neil.foster@newcastle.edu.au> wrote:
> Dear Colleagues;
> There is interesting decision from the Full Court of the Supreme Court of
> Tasmania in Calvert v Badenach [2015] TASFC 8 (24 July 2015)
> http://www.austlii.edu.au/au/cases/tas/TASFC/2015/8.html on the question
> whether a solicitor advising a testator about a proposed will leaving
> property to B, owes a duty of care to B which extends to advising the
> testator about a possible "family provision" ("testator's family
> maintenance") application by another party. Here the (now deceased) testator
> left half shares in property he owned as tenant in common with B, to B; the
> will was later successfully challenged by the testator's daughter, who had
> received nothing under the will, and the daughter received a $200,000
> payment. B claimed that the solicitor ought to have advised the testator to
> have arranged his affairs before death so that the daughter would not have
> been able to make such a claim (the most obvious technique would have been
> to transfer the property into joint tenancies so that it would not have
> formed part of the estate.)
> Over-ruling a trial decision by Blow CJ, the Full Court held that there was
> a duty of care in the circumstances, and that it had been breached. They did
> not, however, order the payment of the full amount taken from the estate by
> the daughter; they all took the view that what B had made out was "loss of a
> chance" to money, and hence that the matter should be sent back to a trial
> judge for calculation of the chance. (Taking the view that even if the
> advice had been given, there were various responses the testator could have
> made.)
> There are a number of interesting features to this case. One that strikes
> me, however, is this: if, as we know is accepted law, a solicitor owes a
> duty to the beneficiary under a will he or she is advising on, could it not
> be argued that he or she might owe a duty to persons in the testator's
> family who will be deprived of a legitimate expectation of support by the
> way the will is framed? Of course it could be said that the solicitor is in
> no prior relationship with the family member; but it could also be said that
> he or she is not in any prior relationship with the beneficiary.
> Regards
> Neil
>
> neil foster
> Associate Professor
> Newcastle Law School
> Faculty of Business and Law
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