OUTER HOUSE, COURT OF SESSION [2008] CSOH 159
	OPINION OF LORD BRAILSFORD in the cause LILLIAN HENDERSON FRASER & OTHERS Pursuer; against McARTHUR STEWART & OTHERS Defender: ________________

Pursuer: Mr Sutherland; Anderson Strathern

Defender: Miss Haldane; Dundas & Wilson

14 November 2008

[1] This case appeared before me for discussion on the Procedure Roll. In that debate the defenders argued their first plea in law, a plea to the relevancy and specification, but did not insist on their second preliminary plea. The defenders motion was that the case should be dismissed. The pursuers submitted that a proof before answer of all pleadings should be allowed.

[2] As a matter of averment the second and third pursuers are residuary beneficiaries under a will of the late James Forbes Fraser (hereinafter referred to as "James Fraser"). The first pursuer is the widow of the late Alexander Fraser a brother of James Fraser. Alexander Fraser survived his brother and died in 2005. Alexander Fraser was a residuary beneficiary under the will of James Fraser. The first pursuer is, following the death of her husband, a residuary beneficiary of James Fraser. The first defenders are a firm of solicitors and the second to ninth defenders are past or present partners in that firm said to be liable for the debts and liabilities of the first defenders. James Fraser was prior to his death, the owner of Croft 19 and 20 North Ballachullish, Kilnallie, Fort William (hereinafter referred to as "the said croft"). It is averred that in or about 1997 James Fraser was in poor health and following the death of a brother in July that year decided that he wanted to make a will. He discussed his wishes and his testamentary intentions with members of his family and thereafter "....contacted the first defenders in or about October 1997 for the purpose of making a will to give effect to his wishes". It is further averred that "...he intended that, apart from special financial bequests to a charity and the church, that Alexander Fraser, the second pursuer, the third pursuer and Helen Fraser were to become the beneficiaries of an equal share of the whole of the remainder of his free estate". Helen Fraser referred to in the passage of the pleadings I have referred to is a fourth residuary beneficiary of James Fraser. The present action has been intimated to her but she has not entered the process. The first defenders accepted James Fraser instructions in relation to the preparation of a will. It is averred that James Fraser was advised by an employee of the first defender that "a croft could not be divided and that in order to pass on the croft he would require to nominate an individual as the tenant of the croft". James Fraser was unhappy with this advice as it was contrary to his wishes for the disposal of his estate on his death. He discussed the matter with members of his family and delayed making any will because of his "agitation" with the advice. Ultimately however he followed the advice and instructed the first defenders to prepare a will nominating an individual as tenant of the croft. A will was drafted giving effect to this advice and nominating an individual as tenant of the said croft and this will was signed on 4 February 1998. James Fraser died on 12 July 1998 leaving the will of 4 February 1998 as his final and operative testamentary statement. [3] The advice given by the first defenders to James Fraser was wrong. I interject to state that this point was accepted by counsel for the defenders. It would have been possible to have prepared a will in a manner which gave effect to James Fraser's testamentary intentions. It is averred that as a result of the wrong advice given to James Fraser, which is averred to be negligence on the part of the defenders, each of the pursuers suffered loss, injury and damage. The loss which the pursuers are said to have suffered as a result of this negligence is of a legacy of the said croft with vacant possession.

[4] At the outset of the debate Miss Haldane for the defenders presented an initial argument submitting that certain passages in the pursuers' pleadings were irrelevant. She identified in this category averments in article 2 of condescendence commencing at page 9A of the Closed Record (as amended) with the words "At the material...." and concluding at 9D with the words "...., several weeks after the death of James Fraser." Regardless of the main argument she was advancing Miss Haldane submitted that these averments should be excluded from probation.

[5] Miss Haldane's principal submission was the contention that as a matter of averment this case fell into the category of claims by intended or disappointed beneficiaries. She submitted that in order relevantly to aver a case of negligence against solicitors it was incumbent upon disappointed beneficiaries to offer to prove, (1) that they were intended beneficiaries under a will (2) that the defenders, the solicitors, were aware that the pursuers were intended beneficiaries under a will (3) that the defenders failed to obtemper a testators instructions in that they failed to create a testamentary document that gave effect to a testators intentions and (4) that as a result of negligence by the defenders the pursuers had reasonably foreseeably been denied of a specific legacy under a will. In formulating these submissions Miss Haldane drew my attention to two passages in the pleadings. In the first place to an averment in Article 3 of condescendence at page 16B where it is averred that:

"James Fraser discussed this matter at length and repeatedly on the telephone with his siblings, and he eventually advised them and the first pursuer.... that he would tell his solicitor that he would nominate his eldest nephew James Andrew Fraser."

In the second place to an averment in article 4 of condescendence at page 17C where it is averred that

"As a result of the advice of Mr McAdam that James Fraser required to nominate an individual as tenant of the croft, James Fraser instructed Mr McAdam that James Andrew Fraser was to be nominated in the will as that individual."

In other words James Fraser gave instructions for the preparation of a will in the manner advised by his solicitors. Miss Haldane submitted that these averments were "central" and that this was therefore a case where a will had been prepared in accordance with the testators instructions. The case was not an example of defenders negligently failing to give effect to a testators instructions. The case accordingly, as a matter of averment, failed to meet all the conditions she had desiderated as essential prerequisites to establishment of a valid claim in a case in the category of the present. In these circumstances the pursuers' case was fundamentally irrelevant and should be dismissed.

[6] In developing this argument Miss Haldane founded upon the approach taken in the case of White and another v Jones and another [1995] 2 AC 207. It was submitted that this decision of the House of Lords in a English appeal whilst not binding upon me was highly persuasive authority in support of the proposition advanced. In this regard my attention was drawn to Holmes v Bank of Scotland 2002 SLT 544, and to the view expressed by the Lord Justice Clerk (Gill) in delivering the opinion of the Inner House (at 548L) that the "principle enunciated by the majority in White v Jones" would be followed in Scotland. With reference to White (supra) reliance was placed upon passages in the speech of Lord Goff at pages 252, 256B, 259G and 267H - 268E: Lord Brown Wilkinson at page 274E and 275F and Lord Nolan at page 295. It was submitted that White (supra) established only a very limited extension to the law. Prior to that case it was accepted that solicitors did not owe a duty of care to third parties affected by the services rendered by the solicitor. White (supra) relaxed that strictness and established the existence of a duty of care owed by a solicitor to intended beneficiaries when it was reasonably foreseeable that as a result of the solicitors negligence the beneficiary lost an intended legacy without either the testator or the estate having a claim against the solicitor. It was essentially a policy decision whereby the law was extended to allow claims by disappointed beneficiaries only in strictly limited circumstances being capable of expression and limitation in the four principles Miss Haldane desiderated.

[7] My attention was also drawn to two decisions of the English courts subsequent to White (supra): Carr-Glynn v Frearsons [1999] Ch 327 and Trusted v Clifford Chance 2000 W.T.L.R 1219. These cases were said to be examples of the English Courts developing the principle in White (supra). It was however submitted that in each of these cases solicitors had negligently failed to carry out a testator's instructions in the preparation of a testamentary instrument and they were therefore distinguishable from the present case where the testator's instructions in relation to the preparation of the testamentary instrument, had been given effect to.

[8] In reply Mr Sutherland for the pursuers submitted that the present case should not be characterised in the narrow way contended for by Miss Haldane. The case raised a point of principle, that point being the extent of duty of care owed by solicitors to prospective beneficiaries. He submitted that the pursuers case was based on negligent advice given to a testator and that Miss Haldane's categorisation of the cases was incorrect. Mr Sutherland further maintained that the case law supported a wider interpretation of the case of White (supra) than had been contended for by Miss Haldane. In Mr Sutherland's submission the relevant factor was the point in time when solicitors may be said, as a matter of law, to have assumed responsibility for the affairs of a testator. As Mr Sutherland characterised Miss Haldane's argument the defenders position was that such point arose only when a will was made. Any negligence on the part of a solicitor prior to that fell to be disregarded. He submitted that that was an incorrect approach and the correct interpretation of White (supra) was that responsibility arose when the solicitor failed to give effect to the testators intentions. If the effect of negligent advice was to defeat a testators intention then, on the argument presented by Mr Sutherland, the ratio of White (supra) applied and there was a case in negligence available to disappointed beneficiaries. This was developed further by submitting that as a general principle a solicitor had a duty of care to give effect to a testator's testamentary intentions. That duty arose when the testator has fixed an intention to bequeath a benefit and instructed the solicitor to achieve the desired result. If as a result of tendering negligent advice the testator's intention was defeated then on an application of the principle in White (supra), the disappointed beneficiary had a right against the solicitor. In support of those arguments my attention was drawn to passages in the speech of Lord Goff in White (supra) between pages 268C and 269D.

[9] The arguments for the parties in this case effectively depended upon differing interpretations of the scope of the ratio in the case of White v Jones (supra). In that case a solicitor negligently failed to attend to a client's instructions to make a new will, the client died before the new will was prepared with the effect that intended beneficiaries did not receive their intended bequest. The House of Lords decided, by a bare majority, that the disappointed beneficiaries could recover notwithstanding that a solicitor performing duties for a client will generally owe no duty of care to third parties. The principle by which the majority were able to arrive at this result is expressed by Lord Goff of Chieveley at page 268D/E in the following terms:

"In my opinion, therefore, your Lordships House should in cases such as these extend to the intended beneficiary a remedy under the Hedley Byrne principle by holding that the assumption of responsibility by the solicitor towards his client should be held in law to extend to the intended beneficiary who (as the solicitor can reasonably foresee) may, as a result of the solicitors negligence, be deprived of his intended legacy in circumstances in which the testator nor his estate will have a remedy against the solicitor. Such liability will not of course arise in cases in which the defect in the will comes to light before the death of the testator, and the testator either leaves the will as it is or otherwise continues to exclude the previously intended beneficiary from the relevant benefit."

Lords Browne-Wilkinson and Nolan agreed with the views expressed by Lord Goff. It is, in my view, clear from the speeches of the majority in the House of Lords that the majority decision was influenced by the perceived need to avoid an injustice, namely that a party who had suffered loss would have no claim and that the party who had a potential claim, the testator's estate, had no loss. That outcome was plainly regarded as undesirable. The problem that I perceive as arising from the decision is in the context of the present case applying the principle therein to the very different factual circumstances.

[10] It is clear that the present case is not factually identical to White (supra). In that case the negligent solicitor failed to give effect to his client's instructions with a consequent, direct, loss by the beneficiaries. In the present case there is no suggestion that the will prepared by the defenders was other than a correct expression of the testators last stated testamentary intentions. It is clear, and is accepted by the defenders, that those intentions may well have been formulated on the basis of negligent advice tendered by the defenders. Nonetheless that negligent act is, in my view, of a different character to the negligent act in White (supra). The negligent act by the solicitor in the present case was also perpetrated at a time when there was scope both for the mistake to have been recognised and, importantly, when there was in any event time for the testator to change his intentions. There is a further distinction and that is that, as a matter of averment, there is nothing in the present case to indicate that the ultimate intention of the testator was not that expressed in the will. For these reasons I am of the view that White v Jones (supra) is not directly in point with the present case and, accordingly, that the ratio is not binding upon me.

[11] If I am correct and the ratio White (supra) is not binding upon me then the question arises, as Mr Sutherland submitted, can that case be construed in a wider way. I find nothing in the decision which would enable me to treat that case in that way. On the contrary as I read the case the majority were at pains to restrict the applicability of their decision to cases within the same category, that is to cases where the solicitors negligently prepare a will which does not reflect the testator's instructions. Whilst that might seem close to the situation in the present case, it is, in my view, different. That difference, albeit narrow, is of importance. Accordingly I feel unable to agree with Mr Sutherland and adopt a wider interpretation to that case. If that is correct then, as I understand the law, the position remains that solicitors do not in general owe a duty of care to third parties. That would be the position in the present case.

[12] In the circumstances I am of the view that the defenders in the present case owed no duty of care to the pursuers. The case is accordingly irrelevant. I will uphold the defenders first plea in law and dismiss the action. I should add that I agree with the submission made by Miss Haldane in relation to the averments in Article 2 of condescendence between 9A-D. Given my view that the case falls to be dismissed as irrelevant it is not necessary for me to make a decision in relation to those averments. I should, however, indicate that had I otherwise been in favour of allowing a proof before answer, I would have excluded these averments from probation as having no relevance to the issue which the Court required to determine.