The Gazette 1964/67

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' 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 Journal, October 21, 1966, p. 792). Dissolution of Solicitors in Partnership

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- 94