Contributors
Following the release of the judgment in Frampton & Frampton v MLP Law Limited, Womble Bond Dickinson (UK) LLP has successfully defended a firm of solicitors in relation to a 2017 conveyance concerning the advice given to the Claimants in relation to ground rent provisions in a long leasehold property. The legal profession has long been fighting these claims and this judgment follows two recent judgments that reached similar conclusions on breach and loss (Snow v Bannister Preston Solicitors LLP (unreported) and Edwards v Howells Solicitors (unreported)). Tim Barr and Amaney Ehtash at WBD were acting for MLP Law and Jack Steer from 4 New Square was successful defence counsel.
The crux of the claim was that the firm breached its duties by failing to advise that, as the ground rent in the lease was in excess of £250, the lease amounted to an Assured Shorthold Tenancy within the remit of the Housing Act 1988. This in turn gave rise to a risk that the lease could be forfeited by the landlord if the ground rent was not paid (the AST Issue).
Like so many claims against solicitors, the crucial feature in this case focused on what the reasonably competent conveyancing solicitor should have reasonably known at the time it was advising the Claimants. Solicitors' actions are to be assessed according to professional standards and what was reasonably known by the legal profession at the time of the retainer. At the time of purchase (mid-2017), the AST Issue was a developing issue. Solicitors are entitled to refer to the latest version of the Law Society Conveyancing Handbook to set the boundaries on what they should reasonably know when advising clients on the material aspects of a conveyance. Whilst the AST Issue is more widely known about today, in the absence of contemporaneous Conveyancing Handbook guidance, any Law Society alert or any other readily available information at the time, MLP Law was held not to have breached its duties to the Claimants in not advising them on the AST Issue.
The Claimants’ case also failed on loss grounds. They sought to claim losses by reference to the adverse impact that the AST Issue had on the saleability, marketability and mortgageability of their property. However, the Court preferred MLP Law's expert valuation evidence that there would still be willing buyers to purchase the property, even with today's greater general knowledge of the AST Issue. District Judge Lampkin held that, although a leasehold with a ground rent provision of more than £250 may be disadvantageous in the general sense, there was no loss other than to the pride and feelings of the Claimants, which is irrecoverable in law.
Solicitors have faced ground rent claims for some time now and is certainly not the first set of claims that focus on the purported failings of conveyancers to advise on a particular issue at a particular time. However, this judgment is a welcome decision for the legal profession so far as the issue of ground rent is concerned.
If you have any queries in relation to solicitor negligence claims please contact Tim Barr.
