LAW REPORT: 1 March 1995 Damages claim against Law Society fails

Wood v Law Society. Court of Appeal (Lord Justice Leggatt, Lord Justice Aldous and Lord Justice Hutchison). 27 February 1995. A person whose complaints to the Law Society about the conduct of a solicitor were first ignored or misunderstood and then not pr
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The Court of Appeal unanimously dismissed an appeal by Peggy Wood against the dismissal by Mr Justice Otton (Independent, 29 July 1993) of her claim for damages against the Law Society for negligence in handling a series of complaints about solicitors.

Miss Wood complained that Sylvia Hubbard, a partner in the firm Hubbard & Co, Chichester, wrongly acted for both sides when arranging a series of loans for her, on the security of her home, a cottage in Ports-mouth, and failed to disclose that Joseph Hubbard, her husband and senior partner, was also a shareholder and director of Mobile Homes (Borden) Ltd, one of the lenders. When Miss Wood failed to repay the loans on time, Hubbard & Co acted for the lenders in issuing court proceedings against her, ultimately obtaining for them possession of her cottage, which was later auctioned for £62,000. Thereafter she was accommodated by the local authority and lived on social security.

Between 1979 and 1983, Miss Wood wrote five letters of complaint to the Law Society. Its initial response was to note that it was Hubbard & Co's duty to act for their own client and owed no duty to a third party. She wrote again, pointing out that she was herself the firm's client. The Law Society replied that her redress was to refer the matter to court. In response to further complaints in 1983, it denied that 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 solicitors, including Pellys, Bishop's Stortford, Saunders & Co, Harrow, and McCarrahers, Southampton, to act for her in defending claims against her, pursuing complaints to the Law Society and suing Hubbard & Co. The latter action was later settled for £2,500.

In 1989 a report commissioned by the Law Society concluded that it had been "unwise" for Hubbard & Co also to act for the lenders and Mrs Hubbard's failure to disclose her husband and partner's interest in Mobile Homes was "conduct unbefitting a solicitor". The Law Society eventually issued a formal rebuke to Mrs Hubbard.

The judge held that the Law Society, when carrying out its investigative functions, did not owe a duty of care to complainants such as Miss Wood. On appeal, the argument was limited to the question whether, even if such a duty were owed, the society's negligence had actually caused Miss Wood's loss.

James Munby QC, Bryan McGuire and Sally Hughes (Powell & Co) for Miss Wood; John Powell QC and Paul Parker (Browne Jacobson, Nottingham) for the Law Society.

LORD JUSTICE LEGGATT said the question was whether, even if the Law Society had properly investigated Miss Wood's complaints and issued a rebuke when the matter was first raised, it would have prevented the loss of her home, which was ultimately due to her inability to repay the loans.

It was argued for Miss Wood that as a result of the Law Society's incompetence and delay, she lost the chance of avoiding repossession of her home, and suffered anxiety and distress. But the function of the society's complaints procedure was to investigate complaints and discipline solicitors, not allay complainant's grievances, though it might have that incidental effect. If there was a duty of care owed to Miss Wood it did not include a duty to provide peace of mind or freedom from distress.

Even though the society appeared not to have lived up to the standards reasonably to be expected of it, there was no prospect of establishing that its failure properly or timeously to investigate her complaints could have any sounding in damages.

Paul Magrath, Barrister