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Malayan Law Journal Articles/1994/Volume 1/LIABILITY WITHOUT RELIANCE -- SOLICITORS AND

DISAPPOINTED BENEFICIARIES
[1994] 1 MLJ cxxxvii
Malayan Law Journal Articles
1994

LIABILITY WITHOUT RELIANCE -- SOLICITORS AND DISAPPOINTED

BENEFICIARIES
Joanna Rasamalar Jeremiah LLB(Hons)(Lond),
LLM(Lond); of Gray's Inn, Barrister-at-Law; Advocate & Solicitor, High Court of Malaya; Advocate & Solicitor,
Supreme Court of Singapore; Teaching Fellow, Faculty of Business Administration, National University of
Singapore
Important points of law with regard to the duty of solicitors to third parties were considered in the recent Court
of Appeal case of White v Jones.1
Facts
In this case, the testator initially instructed a firm of solicitors to draw up a will cutting both his daughters out
of his estate. At a later date, the testator reconciled with his daughters and sent a letter to his solicitors giving
instructions that a new will be prepared to include gifts of 9,000 each to the daughters. Nothing was done to
give effect to the instructions of the testator for a month, after which the managing clerk of the firm asked the
firm's probate department to draw up a will or codicil incorporating the new dispositions. The managing clerk
then went on a holiday and upon his return to work a fortnight later, he made arrangements to visit the
testator on a certain date but the testator died three days before the appointment date, before the new
dispositions were put into effect. The daughters of the testator (the plaintiffs), brought an action against the
solicitors (the defendants) for negligence. The judge at first instance held that the defendants owed no duty
of care to the plaintiffs and dismissed the action. The plaintiffs appealed.
On appeal, the Court of Appeal had to consider the important question of whether a solicitor could be liable in
damages to the disappointed prospective beneficiary. The court had to consider the further question whether
the case of Ross v Caunters (a firm)2 which concerned the liability of a solicitor to a beneficiary was still good
law since the House of Lords decision in Murphy v Brentwood District Council.3
1 MLJ cxxxvii at cxxxviii
The duty and liability of solicitors
Jones's case concerns the consequences in law of a solicitor's failure to prepare a will. The crucial question
that was raised in this case was whether there was any distinction between this case and Ross v Caunters.
In Ross v Caunters, the solicitor at fault was held to be negligent in failing to warn the testator that the will
should not be witnessed by the husband of the residuary legatee. Megarry V-C held that the solicitor's
contemplation of the legatee was actual, nominate and direct; it was contemplation by contract, though the
contract was with a third party, the testator.
Turner J (the judge at first instance) in Jones's case declined to apply Ross v Caunters to the failure to draw
up a will for execution, for two distinct reasons which are as follows:

1a)
1b)

an intending testator does not intend to create a legal relationship between the solicitor who is
taking the instructions and those who may benefit in consequence of the will so that the solicitor
should have those persons in mind as actual, nominate and direct; and
the damage was too speculative and uncertain in extent to be recoverable.

The Court of Appeal, however, disagreed with the judge at first instance and stated that there was no
distinction in principle between Jones's case and Ross v Caunters, although they admitted that there was a
difference in degree in that in Ross v Caunters, the proposal to benefit the beneficiary had proceeded further
but in Jones's case, the matter had not proceeded beyond the stage of the solicitor accepting instructions
and it was possible that the client might have changed his mind before executing the will. Nicholls V-C did not
consider this fact to be a crucial distinction when considering whether a liability in negligence exists, although
he stated that it might be very material when considering whether a beneficiary has proved he has suffered
loss through the solicitor's negligence. His Lordship considered the crucial fact in both cases to be as follows
-- the solicitor was in breach of his professional duty in carrying out his client's instructions for the preparation
and execution of a will; in the one case by doing nothing, in the other by doing his work badly or incompletely.
The Vice-Chancellor identified a category of cases where liability in negligence for economic loss would
clearly follow. These are cases where a prospective beneficiary can show reliance on a solicitor's advice.
Liability in negligence would ensue following the classic case of Hedley Byrne & Co Ltd v Heller & Partners
Ltd.4 An example of a situation that would fall within
1 MLJ cxxxvii at cxxxix
this category is where a prospective beneficiary is present when the will is being signed and, in response to a
question, the solicitor assures him that it is in order for the prospective beneficiary's wife to be a witness. The
Vice-Chancellor distinguished this category of cases and cases where the intended beneficiary was aware of
what the testator was doing (ie short of reliance).
In his opinion, in this situation, the solicitor cannot be liable to the beneficiary only because of his awareness
if otherwise he would not be liable.
(a) Effect of the decision of the House of Lords in Robertson v Fleming 5
The Court of Appeal had to deal with the nineteenth century decision of the House of Lords in Robertson v
Fleming. In this case, it was decided that in the absence of privity of contract, a solicitor was not liable to
make reparation to third parties who might be injured by the negligent acts or omissions in the course of
acting for a client.
Recently in Scotland, Lord Weir in the case of Weir v JM Hodge & Son6 also had to deal with the case of
Robertson v Fleming. In this case, counsel for the plaintiffs had argued that the law of negligence had
developed in the last 50 years or more in such a way as to render Robertson v Fleming out of date and out of
place. Also, to apply the ratio of Robertson v Fleming slavishly would be to place an artificially restricted
scope on the duty of care and to place solicitors in a privileged position as compared with other professional
persons. However, Lord Weir regarded the case of Robertson v Fleming to be binding on him because in his
opinion thus far, no court had held that it was free to depart from a route of the common law laid down by a
higher court on account of subsequent developments in that branch of the common law.
In Jones's case, the Court of Appeal took the view that the law had moved on since 1861 and that the case
of Robertson v Fleming was decided before Donoghue v Stevenson,7 Hedley Byrne8 and Murphy v
Brentwood DC.9 The Vice-Chancellor concluded that what Robertson v Fleming does not do and cannot do is
throw any light upon the answer to be given to the question of liability by an application of the principles
which have subsequently, in Donoghue v Stevenson, become part of the bedrock of the English law of
negligence.
1 MLJ cxxxvii at cxl
(b) Effect of the decision in Ross v Caunters
The case of Ross v Caunters is of particular interest. It is an important case in that there was no reliance by
the plaintiff on the defendant and this element of 'reliance' was crucial to the Hedley Byrne principle, the only
principle before Ross v Caunters which clearly permitted recovery for economic loss.

The facts of Ross v Caunters are familiar to the legal profession. The defendant solicitors prepared a will for
a testator, under which the plaintiff was to be a beneficiary. The defendant sent the will to the testator for
execution, but failed to warn him that it should not be witnessed by the spouse of a beneficiary, or notice
when the will was returned to them that it had been so witnessed. As a result, the plaintiff failed to benefit
under the will. The crucial issue in this case was whether the defendant owed a duty to the third party
beneficiary. Megarry V-C concluded:
A solicitor who is instructed by his client to carry out a transaction that will confer a benefit on an identified third party
owes a duty of care towards that third party in carrying out that transaction, in that the third party is a person within his
direct contemplation as someone who is likely to be so closely and directly affected by his acts or omissions that he can
reasonably foresee that the third party is likely to be injured by those acts or omissions.10

Before Jones's case, it was thought that Ross v Caunters was no longer good law as it was based on the
House of Lords decision in Anns v Merton London Borough Council.11 In Murphy v Brentwood DC,12 Anns was
overruled and Lord Keith in Murphy's case stated that all cases decided subsequent to Anns which were
decided in reliance on it should also be overruled.
It cannot be disputed that Ross v Caunters was based on the two-stage test formulated in Anns. Megarry VC concluded13 that the basis of liability was either an extension of the Hedley Byrne principle, or 'more
probably' an application of the principle in Donoghue v Stevenson.It is quite plain from the judgment14 that the
Vice-Chancellor had applied the Donoghue v Stevenson principle only because of the two-stage test.The
Hedley Byrne principle was clearly not applicable as there was no 'reliance' element.
1 MLJ cxxxvii at cxli
In Jones's case, the Court of Appeal has finally laid to rest these doubts as to the correctness of the decision
in Ross v Caunters. They confirmed that neither in Caparo Industries plc v Dickman15 nor in Murphy v
Brentwood DC did the House of Lords expressly or impliedly doubt the correctness of Ross v Caunters. In
the Caparo case,16 Lord Oliver noted that it gave rise to certain difficulties of analysis. However in Murphy's
case,17 he expressly left open the possibility that outside the reliance cases there may be cases such as
Ross v Caunters, where there is a duty to take reasonable care to avoid pecuniary loss. In Nicholls V-C's
opinion, the House of Lords has left open the correctness of Ross v Caunters as their Lordships have
expressed neither approval nor disapproval.
Limits to the principle in Ross v Caunters
It is crucial at this stage to investigate what the limits to the principle in Ross v Caunters are. Are there logical
reasons to limit the ratio of Ross v Caunters to cases involving wills and are there reasons why solicitors
should be in any different position from other professionals? The principles adopted by Megarry V-C in Ross
v Caunters would seem to apply very widely.
An example of a case which attempted to limit the principles in Ross v Caunters is Clarke v Bruce Lance.18 In
this case, the plaintiff was a beneficiary under the testator's will of part of the income, and on the death of the
testator's wife, of the capital, of a service station. The defendants were retained by the testator to act for him
to vary the lease, granting the lessor an option to purchase the service station within six months of the death
of the last survivor of the testator and his wife. The Court of Appeal held that there was no duty of care and
struck out the claim, giving four main reasons:

2a)
2b)
1c)
1d)

there was no close degree of proximity between the potential devisee and the solicitors;
the transaction in which the option was granted did not have as its object the benefit of the
potential beneficiary under the will;
if the solicitors were liable to the potential beneficiary, this would open up the prospect of
indeterminate liability to an indeterminate class of potential beneficiaries; and
1 MLJ cxxxvii at cxlii
if the solicitors had been negligent, they could be sued by the testator in his lifetime, or by his
personal representatives after his death.

These factors were said to distinguish the case from Ross v Caunters.

It can be noted that the fact that the transaction which was under attack was the variation of the lease rather
than the making of a will, was not one of the features that the Court of Appeal considered distinguished the
case from Ross v Caunters.19
Perhaps one should accept the limits to be as suggested by Lord Oliver in Caparo v Dickman,20 ie if Ross v
Caunters is to be upheld it must be regarded in this respect as being in a category of its own. Farquharson
LJ in White v Jones confirmed that this appeared to be the correct approach 21 because in truth, Ross v
Caunters was a policy decision in the sense that the law ought to have granted a remedy. This was also the
approach taken by Cooke J in Gartside v Sheffield, Young & Ellis22 where he stated as follows:
To deny an effective remedy in a plain case would seem to imply a refusal to acknowledge the solicitors' professional
role in the community. In practice the public relies on solicitors ... to prepare effective wills. It would be a failure of the
legal system not to insist on some practical responsibility.

As commented by Farquharson LJ in White v Jones, the facts of the above two cases otherwise satisfy the
conditions which are necessary to ground a duty of care. The persons who suffer loss if the solicitor has
failed in his duty to his client are both restricted and easily identified. If a solicitor drafts a will and pauses to
consider who would suffer in the event of the draft proving defective, he would at once identify the luckless
beneficiaries.
Jones's case was clearly a policy decision as was Ross v Caunters. Nicholls V-C yet again echoed
considerations that were identical to that of the court in Ross v Caunters by stating as follows:
In considering the liability of the solicitor, it is of the utmost importance to keep in mind that if there is no
liability, the result, as pointed out by Megarry V-C in Ross v Caunters,23 is striking. The only person who has a
valid claim against the solicitor has suffered no loss and the only person who has suffered a loss has no valid
claim. The executors can sue the solicitor for damages for professional negligence, but they can recover only
1 MLJ cxxxvii at cxliii
nominal damages because the estate has suffered no loss. All that has happened is that, by reason of the
negligence, on the testator's death, the estate passes to a different beneficiary. The intended beneficiary
suffers a loss, but he has no right of recourse against the solicitor for the professional negligence which
caused his loss. It would indeed be a sorry reflection on the law if indeed, that is the position today.
The failure of the solicitor in Jones's case whilst could not be described as a defect in the formation of a will
and the facts of which do not appear to be as strong as those in Ross v Caunters, must surely be explained
using the same principles (as recognized by Nicholls V-C), ie if the court holds a solicitor liable to an intended
beneficiary, what the court is doing is fashioning an effective remedy for the solicitor's breach of his
professional duty to his client. The limits of this duty being clearly stated to be to exercise professional skill
and care in carrying out the testator's instructions, giving him all necessary and appropriate advice. The duty
goes no further than that.
The case of White v Jones is important in that although it seeks to apply the principles in Ross v Caunters as
regards liability of a solicitor to third parties, some indications of the limits of this liability can be gleaned from
the judgment which was lacking in Ross v Caunters.
As regards the question why the disappointed beneficiaries should be able to sue the testator's solicitor when
they cannot sue the testator himself, however careless he may have been, Nicholls V-C provides the answer
succinctly at p 489 of the judgment:
In my view there is here a feature of fundamental importance in this case. In general, and always leaving reliance
cases on one side, a solicitor owes a professional duty of care to his client and no one else. He is subject to
professional rules and standards and owes duties to the court as one of its officers. But within that framework it is to his
client alone that he owes a duty to exercise the standard of skill and care appropriate to his status as a solicitor. Thus,
in general, when acting for a seller of land a solicitor does not himself owe a duty of care to the buyer: see Gran Gelato
Ltd v Richcliff (Group) Ltd [1992] 1 All ER 865; [1992] Ch 560. In the ordinary course of adversarial litigation a solicitor
does not owe a duty of care to his client's opponent: see Al-Kandari v JR Brown & Co (a firm) [1988] 1 All ER 833 at pp
835-836 and 838; [1988] QB 665 at pp 672 and 675 per Lord Donaldson MR and Bingham LJ. Further, a little closer to
the present case, when advising a client about a proposed dealing with his property in his lifetime, a solicitor does not
owe a duty of care to a prospective beneficiary under the client's will who may be prejudiced by the dealing: see Clarke

v Bruce Lance & Co (a firm) [1988] 1 All ER 364; [1988] 1 WLR 881 ...
So one asks oneself: is the position different regarding instructions for the preparation and execution of a will? If so,
why? After all, such instructions are no more than one particular type of instructions given by clients to a solicitor. Why
should a solicitor be liable to a third party in such a case but not in others? These are pertinent questions ...
I think that it must be frankly recognized that if the court holds a solicitor liable to an intended beneficiary, what the
court is doing is fashioning an effective remedy for the solicitor's breach of his professional duty to his client. I do not
shrink from this ...

Thus the Vice-Chancellor in the passage above seems clearly to limit a solicitor's liability to third parties in
non-reliance cases to situations invoking
1 MLJ cxxxvii at cxliv
instructions to draft a will. As reiterated and recognized by him, 24 the effect of holding the solicitor liable to the
intended beneficiary will be to enable the latter to take advantage of the professional duty owed by the
solicitor to the client. However, if the solicitor was not liable he would go scot-free and commit a breach of his
professional duty with impunity. In his view this cannot accord with the objectives the law seeks to attain
when imposing upon solicitors and other professional advisers a duty to exercise due professional skill and
care.
Even with these limits on the liability of solicitors to third parties postulated in White v Jones, this principle is
not without its difficulties. Two difficulties that the court left unsolved are as follows:

3a)

3b)

What the effect of an agreement between the solicitor and client releasing the solicitor from
liability for negligence or limiting the extent of his liability would be. It was argued by counsel for
the defendant that if a duty of care to an intended beneficiary exists, this duty is independent of
the solicitor's duty to his client. Accordingly, an agreement of this nature between solicitor and
client would not affect the solicitor's duty to the intended beneficiary. This would be an unfair
result. Should the duty to the intended beneficiary be correspondingly limited? If so, this clearly
goes against normal principles that a limiting clause should not extend to third parties.
There could be difficulties over periods of limitation. If an intended beneficiary has a cause of
action against a negligent solicitor, time would run either from the date when the will was made
or ought to have been made or from the date of death. The first of these possibilities would be
unsatisfactory. A beneficiary intended to take under a will can hardly be said to suffer any loss
during the testator's lifetime. The second would be unsatisfactory because it would mean that
time might not begin to run for a long period of time, subject only to the 15-year long-stop under
s 14B of the United Kingdom Limitation Act 1980. Equivalent provisions to that of s 14B are
found in s 24B of the Singapore Limitation (Amendment) Act 1992. However, the Malaysian
Limitation Act 1953 (Act 254) contains no equivalent provisions.

Despite these unanswered problems, the Vice-Chancellor felt that justice required that there should be some
remedy available for the disappointed beneficiaries as the very purpose of the employment of the solicitor is
to carry out the client's wish to confer a particular testamentary benefit on the intended beneficiary. There is
no other purpose and if the solicitor was negligent in achieving this purpose he should be liable. Moreover
the first problem contemplated above is unlikely to arise in practice as it is unlikely that a solicitor would
include an exclusion clause to this effect.
1 MLJ cxxxvii at cxlv
Conclusion
In conclusion it is clear that the decision in White v Jones perhaps achieved a fair result by extending the
liability of solicitors in particular to situations where there is clearly 'no reliance' and even beyond a case such
as Ross v Caunters where there is an actual defect in the will. Although it cannot be denied that the facts of
White v Jones are indeed a novel situation where liability has been held to exist, the development of the law
in this area has, in the words of the Vice-Chancellor, been 'principled and coherent, and there must be room
for special cases in which some loose ends or even jagged edges may be inevitable'. 25

1 [1993] 3 All ER 481.

2 [1980] Ch 297; [1979] 3 All ER 580.
3 [1991] 1 AC 398; [1990] 2 All ER 908.
4 [1964] AC 465; [1963] 2 All ER 575.
5 (1861) 4 Macq 167, HL.
6 1990 SLT 266.
7 [1932] AC 562; [1932] All ER Rep 1.
8 Supra n 4.
9 Supra n 3.
10 Supra n 2 at pp 322H-323A.
11 [1978] AC 782.
12 Supra n 3.
13 Supra n 2 at p 322H.
14 Ibid at pp 309D-310E.
15 [1990] 2 AC 605; [1990] 1 All ER 568.
16 Ibid at pp 636 and 588, respectively.
17 Supra n 3 at pp 486 and 934, respectively.
18 [1988] 1 All ER 364; [1988] 1 WLR 881.
19 See article entitled 'Is Ross v Caunters still good law?' by Hugh Evans in Professional Negligence (September 1991) at pp
137-141.
20 Supra n 15 at p 635.
21 Supra n 1 at p 497.
22 [1983] NZLR 37 at p 43.
23 Supra n 2 at p 303.
24 Supra n 1 at p 490g-h.
25 Supra n 1 at p 492a.