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Saved By a File Note

09 August 2019

The recent Professional Negligence case Soofi v Dykes, which saw Lord Doherty in the Outer House of the Court of Session focus heavily on the Defender’s file notes in order to reach his decision, serves to reinforce the importance of keeping detailed records of client interactions.

The Defender is a retired solicitor. The Pursuers are spouses. During the time in question the first pursuer was the principal shareholder of Bonafied Enterprises International (BEI). In January 2007 the Defender was instructed by BEI to act on its behalf in respect of its purchase of Airdrie Airpoint – commercial premises consisting of a petrol station, car wash and shop. Prior to instructing the Defender, BEI had informally agreed a purchase price of £850,000 with the seller and had obtained its own valuation of the premises.

Alan Eadie
Alan Eadie, Partner

From the outset the transaction moved at a slow pace with offers from the Defender lapsing due to the seller’s lack of response. At certain points BEI even lost interest in purchasing the premises. However things picked up in 2008 and, from January to August of that year, several revised missives outlining the terms of the purchase were exchanged between the Defender and the seller’s solicitor. The transaction was finalised in late August 2008 and the Pursuers went on to operate the premises. This proved to be a highly unprofitable endeavour and by late 2010 BEI had entered into administration.

The court heard from the Pursuers that the seller had made gross exaggerations in respect of the turnover, profitability and value of the premises to them. While the Pursuers paid £850,000 for the premises, they now maintained that the true value of the premises at the date of purchase was £465,000. As the final terms of the purchase transaction had not, however, specified that the seller warranted the information provided by her in respect of the trading performance of the premises to be accurate, BEI had no legal recourse against her.

The crux of the case brought against the Defender was that, by failing to advise BEI to seek such a warranty, he had acted in a way in which no solicitor of ordinary skill acting with reasonable care would have acted. Accordingly the Pursuers argued that his actions constituted professional negligence. The Defender maintained that it was never suggested to him by the Pursuers that such a warranty should be sought and that the circumstances did not suggest that the inclusion of a warranty was necessary or appropriate. The terms of the deal had been agreed at the outset before the Defender’s involvement and he had not been provided with any financial information. It had not been suggested to him that BEI was relying on the accuracy of financial or other information provided by the seller.

The evidential burden placed upon Pursuers in professional negligence claims is high and the Court was unsatisfied that the Pursuers had satisfied this burden in the case at hand and Lord Doherty’s judgment appears to have been heavily influenced by the Defender’s case file. Of particular relevance was the Defender’s manuscript and typed notes which detailed his final meeting with the Pursuers before accepting the offer on their behalf. Contradicting the Pursuers’ claim that this meeting had been a rather brief and vague affair, the Defender’s notes proved that each clause of the document had been discussed and accepted by those present at the meeting on behalf of BEI, making it difficult for the Court to accept the Pursuers’ version of events.

As the subjective nature of professional negligence claims often means that it is the professional’s word against your client’s, this case once again reinforces the advantages of those defending such an claim  being able to provide detailed file notes to the Court - especially when litigation focuses on events which took place over a decade ago!

The case report also contains an interesting postscript explaining why, contrary to the usual practice and what the Court would expect, there was no report lodged by the expert witness who gave evidence for the Defender. Because it had not become clear until very late in the day whether the Pursuers were in a position to lead evidence from an expert solicitor and, even if so, what the scope of that evidence was likely to be, the Defender’s legal representatives had seemingly been faced with a tricky judgement call over the extent to which their expert ought to reveal his hand!

Contact: Alan Eadie Partner awe@bto.co.uk T: 0141 221 8012

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