The Law Society’s attempt to strike out a negligence claim arising from a false entry on its Find a Solicitor tool has failed.
Having initially used the tool to check the details of another firm, it emerged that the information was false, with the claimant suffering fraud as a result.
The Court of Appeal upheld the original judgement, stating that a summary judgement or strike-out would be inappropriate given the number of questions of fact to be determined.
Damages for negligence were claimed by firm Schubert Murphy following a search on The Law Society’s Find a Solicitor tool during a property transaction. While the results had confirmed the registration of the vendor’s solicitor, it emerged that this was not the case and the firm suffered a loss.
The firm had actually been dealing with a fraudster who had taken the details of a retired solicitor, and applied to amend the name to ‘John Dobbs’. After applying to the Solicitors Regulation Authority for a practising certificate, he also sought their approval to practice as a sole practitioner for ‘Acorn Solicitors’. This was the firm that Schubert had checked using the FAS tool.
A negligence claim brought by the purchaser was settled by the firm’s insurers, but on the basis that the fraudster was not a solicitor, the Law Society refused to pay from the compensation fund.
Delivering the main ruling was Lord Justice Beatson. He highlighted that the existence of a duty of care in cases such as this was dependent on the specific facts.
He drew attention to the relevant factors to be considered, mentioning the need to establish a sufficient level of proximity, the identifiability of the claimant, as well as the general circumstances as to whether imposing a duty would be appropriate.
According to Beatson LJ, a key issue raised by the case was whether a duty existed where information was provided on a digitised platform.
He highlighted the emphasis that the Law Society itself placed upon the service, stating: “The Law Society specifically encouraged the use of the facility to find solicitors rather than licensed conveyancers or other professionals and did not recommend any other checks.”
Beatson went on to mention the nature of the service went beyond its regulatory duties, stating: “I consider that it is arguable that the actions of the Law Society, which has control over the registration of solicitors, created the risk that it would be relied on and the opportunity for fraud and did so in a way going beyond the confines of its statutory regulatory obligations.”
