Solicitor advice failure - possible professional negligence - property Section 20

[Lunar69]

Hello. Your help and guidance would be appreciated. 

 

Background.

I instructed a solicitor to act on my behalf in the purchase of my first investment property. The property is a leasehold flat. The solicitor is well known to me as I had used them previously 3 times for all my main home purchases (all of which previously had been freehold properties). Solicitor was aware this was my first leasehold purchase.

 

This purchase took place during covid, I never met physically with the solicitor. Nearly all communication was dealt with via email/letter.

 

I received the pack a week before exchange/completion with a covering letter that stated "we are now ready to proceed with your purchase", "return all documents to us in readiness for exchange " and " if there is any item in this report that you do not understand or require us to clarify, please do not hesitate to confirm this at our meeting".

 

It was quoted the leasehold information pack and stated it was enclosed "which shows audited accounts, copy buildings insurance and replies to standard leasehold enquires" Nothing else was mentioned/highlighted.

 

The pack enclosed offices copies and filed plan, copy lease, EPC, Property Information form, Fittings and contents form, Leasehold information pack, local authority search, drainage search and environmental search.

 

LPE1 document stated Section 20 works anticipated in next 2 years - yes, listed some work details -cost £4k. increase in service charge over 10% - no.

 

Situation

Solicitor did not highlight section 20, what it was, implications etc. Nothing said, highlighted or explained.

We have never heard of a section 20, nor knew what it meant.

We received a section 20 notice, which came as a shock some 6 months after completion.

 

Upon reviewing pack I can only assume that I made an assumption that the £4k mentioned along with the increase n service charge being no, that I assumed work if carried out would be merged with the service charge.

 

I didn't know what a section 20 was until I received the letter (post completion) advising that a section 20 was now in force and the cost would be £8k (including the building owners management fees). If I had known about this, before exchange/completion, I would have withdrawn from the sale. 

 

Complaint

I raised a formal complaint with the solicitor who handled my purchase. 

Initial response was to decline to assist, stating I should have telephoned them if I had any questions.

 

I appealed response to complaint through their formal channel, in writing and then with another partner on the telephone.

 

Second Response received offering £2.5k without prejudice.

I appealed this response citing costs are £8k, please increase your offer. I did not enclose a figure I wanted as I wasn't sure whether that was the right thing to do, or not. They have responded , without prejudice, full and final settlement, £2.5k (no increase).

 

What next ? -

I am not happy with the offer of £2.5k when the cost to me will be £8k+.. I was not expecting this cost at all.

 

The solicitors, in my view, removed my option to withdraw from the purchase, by failing to explain what a section 20 was, the implications of it etc.

 

I would appreciate advice on best option to now follow?

1 Going back to the firm again?

2. Going to the Ombudsman/SRA

3. Going to Small Claims Court.

 

All opinions appreciated, I have no legal knowledge.

 

Thank you.

 

 

 

 

 

 

Edited September 17, 2022 by dx100uk
Spacing

[mantis shrimp]

If prior to exchange of contracts you had been given advice that a cost of £4K was likely, what would you have done?

[Lunar69]

1 hour ago, mantis shrimp said:

If prior to exchange of contracts you had been given advice that a cost of £4K was likely, what would you have done?

I would have not proceeded with the purchase.

[mantis shrimp]

You appear to have grounds to bring a claim. It seems likely that the solicitors will argue that your loss is £4,000, but you have good grounds to say that it is the full amount for which you have become liable.

 

Persistence on your part may bring rewards. The solicitors should report a claim to their insurers, which can have a significant effect on their renewal premium. Also, the amount of your claim may be below the "deductible" (i.e. excess) on their policy, and therefore payment would come out of their pockets. All in all, there may be good economic reasons for them to offer you a better settlement.

 

Here is a link to the pre-action protocol for professional negligence cases.  You should read it carefully and follow it.

 

Pre-Action Protocol for Professional Negligence - Civil Procedure Rules

WWW.JUSTICE.GOV.UK

 

[Lunar69]

Thank you Mantis Shrimp for your opinion and information link. 

 

Am I right In thinking, once I've exhausted the Solicitors firms complaint procedure,  my next step will be to bring a claim via the small claims court? Or should I go first to the Legal Ombudsman, then if still not happy, the Small Claims Court? 

 

If I was to ask you for a % chance of success with this claim, would you be able to offer me a %? . 

 

And would that change (decrease) if I continue to proceed asking for the full cost of the section 20 to be met? (Would the Judge feel I shouldn't have expected the full amount and think badly of me for bringing a claim for the full amount?).

 

Thank you.

 

 

 

[mantis shrimp]

The Ombudsman probably won't be able to help. This is a matter for Court.

 

There may be some resistance to allocating your claim to the small claims track.

 

I have not seen enough to offer an opinion on chance of success. To do so in these cases (and I have run a few) you need to see everything.  But you have a strong case for saying that any damages should be assessed by reference to the full additional cost. I say this based on your answer to my first question - had your answer been different I would have said you have no claim.

[Andrew-P]

The Legal Ombudsman exists to protect the legal profession and nothing more in my experience - they are a total waste of space

[Lunar69]

Thank you. After now becoming aware of section 20 and what it involves via the Internet, I find it hard to believe now I would have proceeded based on what I have read. 

 

In my first complaint email I did say to them-  by them not advising me, they took my options away to either withdraw from the sale or to renegotiate the asking price. Has that hampered my claim?   (I don't think I would have renegotiated price personally as I am pretty risk adverse and as mentioned before, from what I've read, section 20s are messy and best avoided. With that knowledge I would have walked away.)

[Lunar69]

This is was I put in my initial complaint - 

-          Your firm should have advised us further on the implications of the LPE1.

-          That only sending a copy of the LPE1 and inviting us to raise any queries was not sufficient.

-          That your firm should have discussed the LPE1 in more detail given the circumstances of us not having purchased a leasehold property before.

-          By failing to provide detailed advice, as detailed above, you removed our options at the very least to renegotiate the asking price or to walk away completely.

 

My partner and I would have withdrawn from the sale. We are risk adverse and with a better knowledge now of section 20, we would have viewed this as a complicated purchase, and withdrawn. We only mentioned the removal of our options, in the email above, to highlight the fact that this type of discussion would perhaps have taken place, but didn't, because no advice came forth from the solicitor.

 

 

Would you kindly confirm that, by us mentioning these options, we have endangered our claim to recover the full costs? (Just t want to clarify - as you said this earlier ( "But you have a strong case for saying that any damages should be assessed by reference to the full additional cost. I say this based on your answer to my first question - had your answer been different I would have said you have no claim."))

 

Thank you.

[mantis shrimp]

I do not see that you have prejudiced your claim with that communication.

[Lunar69]

Good afternoon, I am currently completing the Letter of Claim and note the section (i) that I have to indicate if I am happy to refer dispute to adjudication & that I should propose 3 adjudicators or seek a nomination from the nominating body. I have spent hours trying to find out who this is and even approached the SRA who said they couldn't advise me.

 

Is someone able to advise me on this, as to where I can get this information from? (searched this site too and couldn't find the answer.). Thank you. 

Edited August 9, 2022 by Lunar69
wrong term used

[AndyOrch]

Quote

(i) An indication of whether the claimant wishes to refer the dispute to adjudication. If they do, they should propose three adjudicators or seek a nomination from the nominating body. If they do not wish to refer the dispute to adjudication, they should give reasons.

 

Adjudicators panel

WWW.SRA.ORG.UK

 

[Lunar69]

4 minutes ago, Andyorch said:

 

Adjudicators panel

WWW.SRA.ORG.UK

 

Yes thats the section but I wanted to know who are the adjudicators? Is it a Company?, an ombudsman? 

[AndyOrch]

The following is all I can find.....but if the SRA don't know or wont advise then don't opt for an adjudicator ..reason The SRA cant advise or have any knowledge.

 

https://www.sra.org.uk/consumers/register/person/?sraNumber=667808

 

 

.

 

 

 

[Lunar69]

Good evening,

I have issued the Letter of Action. The next stage of the protocol is for the other party to acknowledge receipt of my claim. I have Royal Mail proof of receipt (so I know its been received) but the other party have not yet acknowledged. Day 21 will be in three days. If they do not respond, what would be my next step? 

Should I chase their acknowledgement? (This is not really covered in the protocol).

Thank you.

[AndyOrch]

No just go ahead and issue the claim...post your particulars here first for opinion.

[mantis shrimp]

They will pass your letter to their insurers, and the likelihood is that you will hear from solicitors appointed by the insurers. 

[Lunar69]

thank you - good to know.

 

I have had no acknowledgement from them. 

 

Should I chase this to ensure that they can't claim non-receipt?

(even though Royal mail confirmed receipt of the package).

[stu007]

Hi

 

I know this may be a bit late but as this solicitor was acting on your behalf (Client) have you written to them to ask for your File from them? (there are certain thing they can't provide you but others that the are required to that you may not be aware of)

 

Ownership of documents | The Law Society

WWW.LAWSOCIETY.ORG.UK

---

If you do not already have an agreement with your client about who owns documents, this guidance can help.

 

[Lunar69]

Hello, 

I have enclosed my Letter of Claim. 

I have now received a response from the Solicitor, whilst not an acknowledgement to my Letter of Claim, it is his initial response and he has now upped his offer of goodwill payment as "without prejudice save as to costs". 

I thought it relevant to enclose a copy of the first offer of goodwill payment as the Solicitor in that letter admits that things could have been handled differently, which is the opposite of the latest letter.

 

In summary my claim currently totals £ 7604, incl VAT for the cost of the Section 20 works but I am still not in receipt of the final bill as the work is yet to be fully completed (it may well go a little higher. Work should be complete by Christmas. It was meant to be competed back in July).

 

The solicitor is offering £3500.

 

I have requested a copy of my file (to include my conveyancing solicitors paperwork) under a Subject Access Request. I still await receipt.

 

I would appreciate your thoughts on this offer, any next steps guidance as the negligent Solicitor has put a deadline of days on his offer which I received yesterday (8th October 2022) but is dated 6th October 2022.

 

Also, if it is possible to put a % chance of success on my claim I would appreciate it. I'm fairly cautious in nature and dont want to  take too much of a risk in losing the offer of £3500 if my chances are low of winning.

 

Thank you for all your help in this matter, I do appreciate it.

 

 

Blanked out Sol response 1st offer dated 26th January 2022.pdf Blanked out copy of 2nd offer Sol letter dated 6th October 2022.pdf Letter of Claim - scan.pdf

[Lunar69]

@stu007 @AndyorchI hope you dont mind me tagging you. Wondered if you would kindly be able to read my last post (with letters attached) and offer me guidance on how to proceed. Thank you.

[AndyOrch]

I will get back to you later.

[Lunar69]

On 13/10/2022 at 14:52, Andyorch said:

I will get back to you later.

Thank you @AndyorchI really appreciate your help.  The deadline to respond that they have given me is by tomorrow, would you be kind enough to have a look at this for me.  Many thanks. 

[AndyOrch]

What deadline have they imposed on the offer ?

 

 

.

[Lunar69]

@Andyorchan offer to settle for £3500, admitting no liability, without prejudice save as to costs, along with a signed waiver signing away my rights to claim on any/everything else to do with the property going forward....but offer is only valid if I accept before Wednesday.