Negligent law firm ordered to make reparation to former client
Jan Samuel 25-05-2023
In a case that looks like a textbook exercise on what NOT to look for in a competent solicitor, a law firm in Essex that failed to advise a former divorce client about her entitlement to a share of her husband’s pension has been ordered to pay her £400,000.
In Joanne Lewis v Cunningtons Solicitors, Judge Coe KC found that the firm should have advised the client in clear terms that she should apply to share her husband’s pension, which had a potential worth of £1m.
Instead, Ms. Lewis agreed to receive the sum of £62,000 on a ‘clean-break’ basis, with the firm refraining from commenting on whether such an agreement was fair and reasonable, since there had, at that stage, been no financial disclosure. The solicitors asked Ms. Lewis to sign a disclaimer saying she understood this, but she later brought a negligence claim for breach of duty.
The firm asserted it had discharged its duty, and that Ms. Lewis had chosen to make direct settlement negotiations with her ex-husband.
The judge, presenting Ms. Lewis as an unsophisticated and vulnerable client with no knowledge of financial affairs, described her as ‘desperate’ at the end of a 23-year marriage in 2012, during the course of which she had been bullied and intimidated by her former husband – something her solicitors knew. Her husband’s police pension was the largest asset, and should, he pointed out, have been ‘actively considered’ by the solicitors.
He added: "Any reasonably competent solicitor would have advised the claimant that the proposed settlement order was obviously and exorbitantly one-sided in the husband’s favour, giving the claimant less than 15% of the disclosed matrimonial assets and leaving her with an inadequate financial provision in the future, and particularly in retirement."
The Judge sent on to say Ms. Lewis was not offered the advice she should have been about the reasonableness of the settlement, and had been required to sign a disclaimer agreeing that her solicitors were not able to advise. her The Judge said this was a clear breach of duty, as the firm had enough information to advise, even if only in general terms.
The disclaimer did not say Ms. Lewis could "never go back", but that was the understanding she formed, something which was reinforced by the sheer number of times the firm said it could not advise her.
Ms Lewis emerged from the divorce agreement with a great deal less that the £500,000 that she would almost certainly have been entitled to with a pension-sharing order.
The solicitor/client relationship had begun with a general retainer, but after Ms Lewis reported the terms of the proposed agreement she had discussed with her husband, her solicitor declined to comment on whether or not it was fair or reasonable in the absence of financial disclosure.
The solicitor then required Ms Lewis to sign a disclaimer confirming that she understood this.
The firm remained involved to agree the consent order, by which time another solicitor had taken over the matter. Although there had, by this point, been an exchange of statements of financial information, still no advice was forthcoming.
Some years later, Ms Lewis responded to an advertisement on unfair divorce settlements and contacted ‘Divorce Lifeline’. This led to the negligence claim, which argued that a court would have made a 50% pension sharing order.
Ms. Lewis had, it transpired, on many occasions throughout the troubled marriage, called the police to the house because of her husband’s behaviour. The fact he was putting her under pressure during the proceedings to accept the settlement should, the judge observed, have informed the scope of the solicitors’ duty to her.
Ms Lewis, it became clear, "really wanted some advice and was very uncertain as to what to do, but every time she had contact with the defendant, she was told, and sometimes more than once, that it could not advise her".
This caused her to believe that she could not ask the solicitors for any advice at all. The judge reasoned that, with a 23-year relationship, no property ownership, and the husband’s pension significantly the largest asset, "a court would almost as a certainty have made a pension-sharing order, and [that] the inevitable starting point (and probable finishing point) would have been an equal division of that pension fund".
Stressing the crucial importance of clear, precise advice, he added that it was not enough for the firm to have told her that the agreement may be unfair; it should have set out a comparison between what she would receive through the proposed settlement and what she would reasonably receive if she pursued the matter to court. He said: "In short, she should have been advised that she was foregoing the opportunity to be awarded several hundreds of thousands of pounds.”
The Judge said Ms Lewis would have followed the correct advice, had she been given it:
"It was not enough as I find to refer to a pension sharing order as one of the possible orders that a court could make,’ said the judge. ‘It was not enough to inform the claimant of the existence of pension sharing orders. It was not enough in the face of the information about Mr Mayne’s pension to indicate that Mr Mayne’s level of offers were unlikely to be fair. Mrs Lewis needed clear advice about what she could reasonably hope to achieve."
Article credit: Lalla Merlin