Source: http://welpartners.com/blog/2002/07/solicitors-negligence-in-the-21st-century/
Timestamp: 2019-04-21 08:07:13+00:00

Document:
Increasingly, solicitors who have been retained to draft estate planning documents are coming under scrutiny for their actions not only concerning the protection of the deceased’s estate in a proper and tax effective manner, but also the deceased is intended and unintended beneficiaries.
The duty of care owed by solicitors is arguably widening and there have been a number of interesting decisions which support the contention that this duty of care is widening. The estate planning solicitor has a number of obligations to discharge. The cases herein will illustrate a widening scope of duty and the increasing areas of negligence that estate planning solicitors are finding in their practices.
The case of Whittingham v. Crease (1978), 88 DLR (3d) 353 (BCFC) established for the first time in Canada, that there is a duty of care owed by the solicitor to the intended beneficiaries. Similar conclusions were then reached in the English cases of Ross v. Caunters  1 Ch.297 and White v. Jones  1 All ER 691 (HL).
In Whittingham v. Crease, the solicitor prepared a will in accordance with the testator’s instructions. The solicitor attended at the testator’s home and read the will in the presence of the testator and the testator’s son and the son’s wife. The son was the main beneficiary under the will. The solicitor asked the son’s wife to attest the will and she did so. This rendered the gift to her husband void by reason of Section 12(1) of the Wills Act. Ultimately, the court held that the solicitor was negligent.
In Whittingham v. Crease, the British Columbia Federal Court allowed recovery on the basis of principles long enunciated in the case of Hedley Byrne & Co. Ltd v Heller & Partners Ltd.  2 All E.R. 575, the particular principle of that case being, that if a person seeks information from a person possessing a special skill and trusts that person to exercise due care, and if that person knew or ought to have known that reliance was being placed on his or her skill and judgment, then the skilled person owes a duty of care to the first person. Further, the first person can recover damages for financial loss caused by the negligent misrepresentation of the second person.
In Ross v. Caunters  1 Ch.297, a similar kind of situation arises and is analogous. The defendant’s solicitors drafted the testator’s Will, and then, upon the request of the testator, sent it to him for signing. The husband of the beneficiary under the Will was one of the witnesses.
Again, the plaintiff’s gift was void. The solicitors failed to notice the problem when the Will was returned to them.
The plaintiff brought an action against the solicitors for damages for the loss of her benefits under the Will. The defendants admitted the allegations of wrongdoing, but denied liability on the grounds that they only owed a duty of care to the testator and not to the plaintiff/beneficiary.
affected by his own acts or omissions that he can reasonably foresee that the third party is likely to be injured by those acts or omissions”.
(3) that to hold the defendants were under a duty of care to the defendants would not impose an uncertain and unlimited liability, but a finite one to a finite number of persons, namely, one.
Accordingly, the Court held that the defendants owed a duty of care to the plaintiff because it was obvious that if they were careless, she would suffer loss.
In the subsequent decision of the House of Lords in White v. Jones,  1 ALL E.R. 691 (U.K.H.L.) the duty of care owed to intended beneficiaries by solicitors drafting wills was affirmed. Considerable weight, however, was given to the absence of any remedy available to the deceased’s personal representatives in such a case.
In White v. Jones, the House of Lords rejected the approach used in Ross v. Caunters, but held that the principle in Hedley–Byrne could be extended to cover cases in which beneficiaries were unaware of the making of the Will. In this case, solicitors were asked by the testator to disinherit his two daughters given that they had had a quarrel. The firm prepared the Will and it was executed by the testator. Three months later the testator and his daughters reconciled. The testator told his daughters what he had done and that he was going to rectify it. He asked the firm to prepare a new Will with a gift of money to each of his daughters. The Will did not get prepared, and a few months thereafter the testator died. The two daughters brought an action for damages and negligence. The Trial Judge dismissed the action and the daughters appealed.
(1) The fact that if such a duty is not recognized, the only persons who might have a valid claim (i.e. the testator and his estate) have suffered no loss, and the only person who has suffered a loss (i.e. the disappointed beneficiary) has no claim.
(3) There is a sense in which the solicitor’s profession cannot complain if such a liability may be imposed upon their members. If one of them has been negligent in such a way as to defeat his client’s testamentary intentions, he must regard himself as very lucky indeed if the effect of the law is that he is not liable to pay damages in the ordinary way. It can evolve no injustice to render him subject to such a liability, even if the damages are not payable to his client’s estate for distribution to the disappointed beneficiary, but rather directly to the disappointed beneficiary.
These cases have served to widen the scope of duty of a solicitor to those other than just the testator when providing services with respect to the creation of a testamentary or estate planning document. Food for thought: Could the theories found in these cases be used to widen the scope of duty in cases involving solicitors’ involvement in inter vivos transfers?
The series of “disappointed beneficiary” cases resulting from the faulty preparation of testamentary documentation has widened the scope of duty of a solicitor beyond the testator to include beneficiaries who are disappointed as a result of a failed testamentary disposition.
Courts have continued to find in the 21st century that the intended beneficiary is someone that the solicitor can reasonably foresee who may, as a result of the solicitor’s negligence, be deprived of an intended beneficial interest in a deceased’s estate.
The Application of White v. Jones  1 All ER 691 (HL) In Canada in the 21st Century.
So in what ways is the application of White v. Jones in Canada continuing to contribute to the widening of principles already enunciated in cases referred to herein. There continues to be further expansion of the boundaries of the tort of negligence.
The Saskatchewan Court of Appeal in Earl v. Wilhelm (2000) 189 Sask R. 71, was the first Canadian appellate decision to adopt the principles articulated in White v. Jones, by which a remedy, akin to that flowing from the application of Hedley-Byrne principles, is accorded an intended beneficiary where a solicitor, on taking instructions for a will, can reasonably foresee the deprivation of an intended legacy if due care is not taken.
In Earl v. Wilhelm, a lawyer incorporated the testator’s farming operation for tax purposes. Subsequently, the same lawyer drafted a will for the testator, making several bequests of the farmland which had already been transferred to the corporation. Those bequests failed and the residual beneficiaries inherited the land. The specific beneficiaries successfully sued the solicitors for negligence. The Court adopted the reasoning of the House of Lords in White v. Jones  1 All ER 691 (HL), finding that the law previously contained an anomaly where a disappointed beneficiary had no remedy for a loss arising out of professional negligence and more importantly, giving credence to the “third party beneficiary principle” being now, well-established in most common law jurisdictions.
In the Saskatchewan Law Review (64 SASKLREV 113), on Earl v. Wilhelm, it was stated: “the unanimous judgment of the Saskatchewan Court of Appeal represents the first appellate decision in Canada on this issue.” In adopting the decision in White v. Jones, the Court of Appeal noted that applying Hedley Byrne & Co. Ltd v Heller & Partners Ltd.  2 All E.R. 575, to the situation between the negligent lawyer and the disappointed beneficiary caused difficulties, particularly with respect to the requirement of reliance.
The Court of Appeal provided two reasons for adopting the rationale of White v. Jones  1 All ER 691 (HL): Firstly there had evolved an obvious lacuna in the law. Secondly, most judgments and academic materials favoured the result in White v. Jones  1 All ER 691 (HL). Further, there was no independent analysis of what constitutes reliance on the part of a beneficiary, or assumption of responsibility on the part of a solicitor. Important public policy arguments were not fully analyzed. In short, the Court of Appeal accepted the decision of the House of Lords in White v. Jones  1 All ER 691 (HL) without further independent analysis.
A solicitor does not owe a duty of care to a beneficiary under a previous will in relation to the solicitor’s conduct in assisting a testator in the preparation and execution of a new will.
The Court of Appeal, in Graham v. Bonnycastle stated that liability arises only where the interests of the client and the third party are in harmony and there is no possibility of conflict. There does not exist any general duty to third parties to take care.
Ontario – in the 21st. Century.
In the case of Hall v. Bennett Estate 2003 Carswell Ont 1730, the Court of Appeal considered the situation of a lawyer who failed to follow the instructions of a terminally, temporarily lucid client. After a brief interview with the client on his deathbed, the lawyer opted not to follow instructions by his client to draw up a new will awarding property to the third party plaintiff.
The client died later that day. In its decision, the Court concluded that a lawyer’s first obligation was to enquire into his client’s testamentary capacity before undertaking to make a will.
The Judgment at first instance of the Honourable Mr. Justice Manton of the Ontario Superior Court of Justice at Belleville on September 28, 2001, and reported at  O.J. No. 5092, 40 E.T.R. (2d) 65 initially wreaked havoc amongst Estate practitioners over solicitors’ negligence and liability concerns.
Mark Frederick, (“Frederick”) the solicitor who attended on Bruce Bennett (deceased), terminally ill in hospital, in deathbed circumstances, faced with questions of testamentary capacity, was found negligent in failing to prepare a Will, thereby depriving the Plaintiff, a prospective beneficiary, (Peter Douglas Hall) of a property Bennett intended him to have on death.
“I find that Bennett had the capacity to make a Will on January 13, 1996, and that the Defendant had enough information to prepare a Will to dispose of at least part of his assets. I also find that the Defendant did not fulfill his duty of care to the Plaintiff to prepare a Will for Bennett. ……. If the Defendant was not sure or had a doubt with respect to Bennett’s capacity, he should then have prepared the Will and signed it in accordance with Section 4 (1) of the Succession Law Reform Act, R.S.O. 1990, c.s.26, and let the court decide on capacity, if necessary to do so at a later time. I therefore, conclude that the Defendant was negligent in failing to prepare a Will thereby depriving the Plaintiff of a property Bennett intended him to have upon his death”.
The Honourable Justices O’CONNOR, WEILER, and CHARRON of the Court of Appeal for Ontario, heard the appeal of Hall v Bennett on March 13, 2003.
“(a) Did Frederick owe a duty of care to Hall as a prospective beneficiary under Bennett’s Will?
(b) If so, what was the standard of care?
(c) Did Frederick’s conduct fall below the standard of care?
The Court of Appeal considered and set out the law on testamentary capacity and thereafter considered the evidence relating to Bennett’s condition and Frederick’s assessment of his prospective client’s testamentary capacity.
In allowing the appeal and setting aside the trial judgment, the Court of Appeal awarded the Appellant his costs of the trial to be assessed and his costs of the appeal fixed at $25,000.00.
This appeal decision has been long in coming for the wearied Estate Practitioner, yet is a welcome relief to practitioners in reaffirming the duty of care owed in circumstances where lack of testamentary capacity is evident.
“… that the imposition of the duty of care in respect of the preparation of a Will in deathbed circumstance such as those that arose in this case, would place solicitors in an untenable situation… to impose a duty of care in favour of third party prospective beneficiaries in deathbed circumstances where there is a risk that the testator lacks capacity, makes solicitors in those circumstances the guarantors of third party beneficiaries’ inheritances. If the solicitor determines that the testator lacks capacity and declines to draw the Will, the solicitor is exposed to a suit by the third party prospective beneficiaries.
The Court reviewed the indicia a lawyer must assess in addressing the issue as to whether her client has the proper testamentary capacity.
• where applicable, must understand the nature of the claims that may be made by persons he or she is excluding from the will.
The Court here found that it is also clear from the jurisprudence that the test to be met to prove testamentary capacity is a high one and the onus falls on the propounder of the Will. The jurisprudence abounds with statements that it is not sufficient simply to show that a testator had the capacity to communicate his or her testamentary wishes. Those wishes must be shown to be the product of a sound and disposing mind as described above.
The Court further concluded that if the testator does not have the requisite testamentary capacity, the preparation of a Will in accordance with expressed wishes at the time may only serve to defeat true intentions. The Court considers, the first and foremost duty of a solicitor is to serve the interests of the client, which may, depending on the client’s wishes, extend to a particular intended third party beneficiary.
“As a general proposition, I agree with counsel for the appellant that the existence of a retainer is fundamental to the question of duty of care. The retainer is usually the very basis of the relationship between a solicitor and a client. Hence, insofar as the client is concerned, the absence of a retainer will usually be determinative, and no duty of care will arise in respect of the preparation of a will.
It is simply a matter of common sense that there can be no liability in contract for the negligent performance of services that a solicitor never undertook to perform. Insofar as any possible liability to the client in tort is concerned, in the absence of a retainer, there would have to be other circumstances that gave rise to a duty of care. Such circumstances would be unusual.
There is no precise time standard for the preparation of Wills after instructions have been given to a client.
2. In Rosenberg Estate v. Black (2001 Carswell Ont 4504), the Court considered the principles enunciated in White v. Jones with regard to preparation of a will as a component of drawing up a complex estate plan. The Court here distinguished the facts from White v. Jones insofar as the facts did not encompass merely a simple will, but rather a number of interdependent documentary tasks as part of the overall estate plan.
In the context of the retainer, the duty owed involved a number of tasks in addition to the drawing up of the will. In considering the solicitors’ administration of all the required, interdependent tasks, the Court determined that they were not negligent in their duty of care owed to a prospective third party beneficiary.
Per Lord Justice Steyn of the Court of Appeal of England.
Accordingly, in this case, at issue was “ a conflict of duties”. The Court held, that the duty to ensure independent legal advice in the circumstances were sufficient to delay the execution of the will. In sum, the duty owed to a potential beneficiary cannot outweigh that owed to the solicitor’s actual client, the testator.
• gauging testator capacity (i.e. dementia, mental illness, drug addiction, alcoholism, etc.).
• lack of agreement/advise/information re a time frame for completing the will at the outset with the client. Thus, if the client dies in the interval before the will is completed, evidence of such an agreement as to time may help to refute claims of negligence.
• As to time, there is no clear standard, and it may depend on the circumstances of a case (health, age, travel, etc.). But for a normal case where extreme age or health are not at issue, ten workings days would seem to be a reasonable upper limit.
• Again, where there is a pattern of non-cooperation from the client, a solicitor should make notes on file so as to evidence this interaction.
• there should be written notes of instructions taken and given.
A further English case which should be given due consideration is the case of Clarke v. Bruce Lance & Co.  1 ALL E.R. 364 (ENG.C.A.), a solicitor prepared a Will for a client. The solicitor subsequently acted for the testator in an allegedly improvident option transaction, causing a decrease in the assets of the testator. The beneficiaries under the will sued the solicitors for the loss. The Court found that the solicitors owed no duty to the beneficiaries.
The court considered, and distinguished, cases including, again Ross v. Caunters in which it had been held that, when preparing or supervising the execution of a will, a solicitor owes a duty of care to the beneficiaries. The court in this case, refused to extend the scope of the duty of care.
Finally, there is also the case of Stern v. Stern (2003) Carswell Ontario 102 (OSCJ), where His Honour Justice Cullity ruled on a Summary Judgment Motion in which case, beneficiaries of an estate were suing the lawyer for, inter alia, the negligence in failing to protect the testator from depletion of his assets by one of the daughters. The argument before Justice Cullity was whether the solicitor in question owed any duty of care to the plaintiffs, who were the beneficiaries of the testator under the will that was submitted for Probate.

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