A simple conveyancing mistake could potentially lead to a firm facing liability of over £200,000.
Professional negligence claims are increasingly common in the conveyancing arena and often can be of very high value. After all, purchasing a property is the biggest lifetime investment the majority of individuals make. In a recent case the judge awarded the claimant the sum £211,500 – the lost value of land caused by the filing of a wrong plan.
The case concerned the purchase of land and a subsequent sub sale in 2007. That is, the claimant wished to purchase land and then sell part of this land in a further sale.
The main issue concerned whether the claimant was given and advised on the correct title plan and whether he was also advised correctly in regards to the section of the land which he wished to retain.
In awarding the claimant over £200,000 the judge found that the solicitors had acted negligently in filing the wrong title plan. It was also found that the solicitor discharged his retainer negligently and/or in breach of contract because the advice that he gave to the claimant in respect of the amount of Stamp Duty Land Tax (SDLT) payable was negligently wrong resulting in the claimant paying more SDLT than was appropriate. The claimant was also subsequently awarded £18,000 to compensate for the lost SDLT savings.
The judge in this matter confirmed that the retainer of a solicitor instructed to act in a conveyancing transaction extends to advising a client of matters regarding the title that may impair the reasonably foreseeable use or enjoyment of the property. Further, he highlighted that the retainer also extended to ensuring that only the correct amount of STLD is paid. In his view both are incidental to the conveyancing process and he therefore found the solicitor to be negligent in failing to advise properly.
It was only in August 2009 when the claimant received an offer for the retained part of the land, that the negligence came to light. The sale did not proceed as investigations by the potential purchaser revealed the problems with the retained land and therefore the claimant first became aware of the difficulties and sought independent legal advice.
The case highlights the need for solicitors to be cautious in conveyancing transactions, especially in the current market where consumers expect more for less in a quicker time frame. It also highlights the large losses than can be caused by errors in the conveyancing process.
Following on from the April 2016 stamp duty rise, it is anticipated that there will be an influx of professional negligence claims in this area. As many practitioners were under extreme pressure to complete before the price hike. Only time will tell.