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GAZETTE
MARCH 1995
Bank Can Assume Solicitor
Acted Properly
Sometimes solicitors consider that
their duties ahd responsibilities cast
an almost impossible burden on them.
The duty of a solicitor, was
considered by the Court of Appeal in
the recent case of
Bank of Baroda v
Rayarel and Others (The Times,
January 19, 1995); the decision of the
court is pragmatic and has a practical
significance for solicitors.
The Court of Appeal held that a bank
dealing through a solicitor with a wife
acting as surety for a loan to her
husband could normally assume that
the solicitor had properly advised the
wife. The bank was not required to
take any further steps to avoid being
fixed with constructive notice of
misrepresentation or undue influence
by the husband to enable the wife to
escape liability for the debt.
The case illustrates the cardinal
importance, where there is the
slightest possibility of a conflict of
interest, of having a client confirm in
writing that the effect of a document
has been explained to him or her,
and that he or she had the right to
have independent legal advice on its
effect, and (if appropriate) had
waived that right.
A crucial factor in the case was that
the charge document contained a
statement or certificate that the
mortgagor acknowledged receipt of
the charge deed, to have been advised
of its effect, and of the right to have
independent legal advice. The
certificate was signed separately by
each of the defendants and was
witnessed by the same solicitor. The
court concluded that the bank was
entitled to rely on the solicitor giving
his client correct advice and that the
matter was put beyond doubt by the
statement endorsed on the mortgage
&nd signed by the wife.
In a separate judgment,
Hoffmann LJ
said the bank's legal department was
not required to commit the
professional discourtesy of doubting
whether the solicitor had actually
given the required advice nor was it
required to inform the solicitor of his
professional duties.
The case illustrates the cardinal
importance, where there is the
slightest possibility of a conflict of
interest, of having a client confirm in
writing that the effect of a document
has been explained to him or her, and
that he or she had the right to have
independent legal advice on its effect,
and (if appropriate) had waived that
right.
Nuisance: State Liable
There are occasions when lawyers are
disappointed with the decision of a
judge. Leaving aside any bias in
favour of one's own client, there is,
sometimes a genuine intellectual
disillusionment with the decision of
the judge: justice was not done. In
those circumstances, we (lawyers)
should comfort ourselves with the
sentiment expressed by
Logan E
Bleckley,
an American jurist, who
observed that in court, "it is always
probable that something improbable
will happen" (
Warren v Purtell
63
GA. 428, 430). We can expect too
much from the judges. The celebrated
Justice Oliver Wendell Holmes
observed in
Truax v Corrigan
(257 US 312, 342, 1921); "Delusive
exactness is a source of fallacy
throughout the law."
Mrs Cregoria Lopez Ostra
failed in all
the domestic courts of Spain in
relation to fumes causing health
problems at a local plant for the
treatment of liquid and solid waste.
Justice was finally achieved in the
European Court of Human Rights.
In a judgment delivered at Strasbourg
on 9 December 1994 in the case of
Lopez Ostra
v
Spain,
the European
Court of Human Rights held
unanimously that there had been a
violation of Article 8 of the European
Convention on Human Rights (right to
respect for private and family life and
for the home) on account of nuisance
caused to Mrs Lopez Ostra and her
family by a plant for the treatment of
liquid and solid waste sited a few
metres from their home. Under Article
50 of the Convention, the Court
awarded the applicant compensation
for damage and a sum for costs and
expenses.
In 1988 Mrs Gregoria Lopez Ostra, a
Spanish national, lived with her
family, a few hundred metres from the
centre of Lorca. In July 1988, a plant
for the treatment of liquid and solid
waste from tanneries at Lorca,
financed by a consortium of firms in
the leather industry, began to operate
a few metres from her home.
As soon as the plant started up, the
fumes from it caused health problems
and nuisance to many local people,
including the applicant. This
prompted the municipal authorities to
evacuate people living near the plant
and eventually, on 9 September 1988,
in the light of expert opinions
produced by the relevant authorities,
to order partial cessation of its
operations.
After returning to her home, the
applicant continued to suffer health
problems and noted a deterioration in
the environment and the quality of
life. She made an application to the
local court seeking protection of her
fundamental rights and alleging
unlawful interference with her home
and attacks on her physical and
psychological integrity. In a report of
19 January 1989 the Environment and
Nature Agency of the region recorded
that nuisance was being caused. On 31
January 1989, the local court found
against Mrs Lopez Ostra despite an
opinion by Crown Counsel endorsing
her application.
The applicant then lodged an appeal
with the Supreme Court, which was
dismissed. On 26 January 1990 the
Constitutional Court held that an
appeal she had lodged was manifestly
ill-founded.
The European Court of Human Rights
nevertheless considered that severe
environmental pollution might affect
individuals' well-being and prevent
them from enjoying their homes in
such a way as to affect their private
and family life adversely, without,
however, seriously endangering their