Law Report: Law Society owed no duty of care: Wood v Law Society. Queen's Bench Division (Mr Justice Otton), 28 July 1993

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The Law Society, when carrying out its investigative and discliplinary functions in respect of its members, does not owe a duty of care to persons making complaints.

Mr Justice Otton dismissed an action by Miss Peggy Wood claiming damages against the Law Society for negligence and misfeasance in public office over its handling of a series of complaints about a firm of solicitors, Hubbard & Co, Chichester.

Miss Wood alleged that Mrs Sylvia Hubbard, a partner of the firm, arranged a mortgage for her, as a client of the firm, on the security of her home and her only asset, a cottage in Portsmouth, knowing she had no means of paying the interest. The mortgage was with Mobile Homes (Borden) Ltd but Mrs Hubbard failed to disclose that her husband was a shareholder of the company and that Hubbard & Co were acting for both parties to the loan. A further loan was arranged with Mr Mills, another of the firm's clients. Subsequently, Hubbard & Co acted for both Mobile Homes and Mr Mills in their claims against Miss Wood for repayment of the loans and possession of Miss Wood's cottage.

Between 1979 and 1983, Miss Wood wrote five letters of complaint to the Law Society. Its response to the first of these was to note that it was Hubbard & Co's duty to act for their own client and owed no duty to a third party such as Miss Wood. She wrote again, pointing out that she was herself a client of Hubbard & Co. The Law Society replied that her redress was to 'refer the matter to the court'. In response to further complaints in 1983, the Law Society denied it had misunderstood the position in 1979 and concluded 'there is no professional misconduct involved here and the Society cannot be concerned.'

Miss Wood instructed a series of other firms of solicitors, including Pellys, Bishop's Stortford, Saunders & Co, Harrow, and McCarrahers, Southampton, to act for her in defending the claims against her, in pursuing her complaints to the Law Society and in suing Hubbard & Co. In September 1983 her cottage was repossessed and auctioned for pounds 62,000. Thereafter she was accommodated by the local authority and lived on social security. In January 1987, while advised by Saunders & Co, she settled her action against Hubbard & Co for pounds 2,500.

In 1989, a report commissioned by the Law Society concluded there was no prima facie case of professional misconduct, but it had been 'unwise' for Hubbard & Co to act for Mobile Homes and Mr Wills, and that Mrs Hubbard's failure to reveal her husband and partner's interest in Mobile Homes was 'conduct unbefitting a solicitor'.

Miss Wood in person (assisted by Ole Hansen and Sally Hughes as McKenzie friends); John L Powell QC and Paul Parker (Browne Jacobson, Nottingham) for the Law Society; William Henderson (Official Solicitor) as amicus curiae.

MR JUSTICE OTTON said the Law Society, though not a statutory body in origin, was subject to statutory duties and exercised statutory powers in relation to disciplinary proceedings under the Solicitors Act 1974 (as amended). But there did not exist such a close and direct relationship between a complainant such as Miss Wood and the Law Society for a duty of care to arise.

Miss Wood was a member of an unascertained class, wide and diffuse, that included clients complaining about their solicitors' conduct of uncontentious matters, dissatisfied litigants, and victims of injustice in civil and criminal proceedings. It was impossible to ascertain who could be accorded or denied a duty of care.

Other factors militating against the finding of a duty of care included the Law Society's lack of power to control the day- to-day conduct of solicitors, and the existence of various alternative remedies, including a reference to the 'lay observer', an application to the Solicitors' Complaints Bureau, an action for damages, and an application to the High Court under section 51 of the Solicitors Act.