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Solicitor's Liability
—
Acting for Both Parties
The Old Wisdom enunciated by Scrutton, L.J.,
in Moody v Cox & Hatt (1917) 2 Ch. 71
that
"solicitors who try to act for both vendor and
purchaser must appreciate that they run a very-
serious risk of liability to one or the other" was
applicable
to a
recent case
in England. The
plaintiff sought damages for negligence
in
the
conduct of her business by the senior partner of
the defendant's solicitors. She contended that he
should have advised her against lending money
to a man he knew to be untrustworthy, which
knowledge he had, because the man in question
was also a client of his. Lyell J. held that the
solicitors were under duty to advise on the basis
of all the knowledge that they in fact had. The
proper course of action would have been to refuse
to act for one or other of the clients where con
flict of interests entered the transaction.
(Neushal v Mellish and Harkavy—
Solicitors'
Journal,
October 21, 1966, p. 792).
Dissolution of Solicitors in Partnership
In January, 1958 the plaintiff and th« defend
ant, who had been partners in a firm of solicitors,
dissolved the partnership, one of the terms of dis
solution being that all costs relating to work done
or in progress for individual clients be estimated
as at that date. Thereafter the defendant com
tinued to practise
in a new firm bearing the
same name as the old firm, and the plaintiff set
up on his own. No estimation of costs at the
date of dissolution was made. Each party carried
on work in progress in respect of "his" clients
in accordance with an agreed list, which split
the various clients between the former partners.
Each collected
the amounts due in respect of
that work, allocating to the old firm the portion
he estimated to be appropriate to the work done
up to the date of dissolution. The defendant kept
a ledger in which were entered in separate columns
the details of
(i)
serial number,
(ii)
client's
name, (iii) the total amount of the bill of costs,
(iv)
the amount allocated to the old firm, and
(v)
the amount allocated
to
the defendant
in
respect of
the new firm. Certain bills
related
wholly to the period before dissolution, others to
the period wholly after dissolution and some to the
period straddling the dissolution. Disputes having
arisen the plaintiff issued a writ on 31st December,
1962. By his summons he sought discovery of the
figures in the defendant's ledger relating to bills
paid in respect of the period up to or straddling
the date of dissolution.
Pennycuick J., said that on the face of it the
total figure appeared to be relevant to him to
find out if a fair proportion had been allocated
to
the plaintiff. The plaintiff was willing
to
accept an extract from the ledger showing both
the pervious and the straddling items, certified by
the defendant's accountant, and that dealt with
the practice difficulties involved. The defendant's
second ground of objection was that the figures
were
privileged
and
ought
to
be
disclosed,
the privilege being that of the clients. While it
was not contended that the plaintiff was entitled
to discovery of any communication between the
defendant and his clients, it was contended that
the privilege did not protect the totals. That on
the face of it seemed right. A bill of costs normally
contained a record of events and was privileged
on that account, but his Lordship could not see
on what ground privilege could be claimed where
the bill did not relate to particular transactions
or afford a record of privileged occasions. In the
present case the plaintiff only sought the totals
of bills paid by the various clients, and there was
no reason why discovery of those figures should
reveal any confidential information or communica
tion between the defendant and his clients. He
therefore concluded that there was no privilege as
to the totals and discovery should therefore be
given. Order accordingly.
(Lewthwait v Stimson, I.L.T.R. & S.J. (Vol. c)
—Journal,
p. 317.
Statue of Limitations—issue of writ within period
On February 11, 1960 a stevedore sustained
injuries as a result of a dock accident. Within
a month of the accident the matter had been
put in
the hands of the Union of which the
stevedore was a member. However, the solicitors
were not instructed until January, 1963, the writ
being issued on February 1, 1963, shortly before
the limitation period in personal injury actions
expired. Mr. Justice Mocatta said that he was not
altogether certain on the authorities whether it
would be a proper exercise of his discretion to
deprive the plaintiff of some of his costs in the
action by reason of the delay that occurred in
issuing the writ and in giving the defendants the
first indication that a claim was pending. He was
inclined to think that he would be exercising
his discretion properly if he did so, but he could
not overlook the fact that counsel did not know
of any previous case where a Judge had taken
that view.
Mr Justice Mocatta said that he felt, therefore,
that the proper course to take in
the present
instance was
to
issue as solemn a warning as
possible so that trade unions would in future, act
in these matters with expedition. It was not for
him to say, how they could resolve the problem.
It might be that they ought to employ profes-
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