Law firms may no longer be able to correct mistakes at their own expense but will instead have to insist that clients take independent legal advice – according to a recent Solicitors Disciplinary Tribunal decision (Howell-Jones LLP (11846-2018)).
In an agreed outcome approved by the Solicitors Disciplinary Tribunal (SDT), Howell Jones was fined £5,000 with costs of £26,850 (though the overall cost to the firm and/or its insurers will have been much higher).
Howell Jones believed that it had made a mistake advising its client to settle in divorce proceedings. The firm informed its insurers and agreed that it would:
- admit the mistake to the client
- explain the client was entitled to seek independent legal advice
- propose that Howell Jones continue to act for him on the basis that the firm would seek to overturn the settlement at its own expense.
This approach has been used by many firms over the years to put right their mistakes while continuing solicitor-client relationships.
With the client’s agreement, the firm attempted to correct its perceived mistake by getting the settlement overturned – although ultimately it was not successful.
The Solicitors Regulation Authority brought the case to the SDT on the basis that the firm acted where there was an own-interest conflict. In due course, the SDT gave its approval to an outcome agreed between the SRA and the respondent firm.
In its judgment, the SDT noted that the firm “had not lacked integrity” and had indeed taken a number of steps to try to resolve the matter to the client’s satisfaction. However, the firm “had not ceased acting when it should have done, and this was fairly described as an error of judgement”.
Gregory Treverton-Jones QC has commented on this case in the Law Society Gazette.