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by Kimberly A. Whaley
[1]
While lawyers rarely want to talk about solicitor's negligence, it is an important topic that should always be top of mind. In general, lawyers must be diligent in meeting the standard of care required. There are however unique concerns when acting as an estates practitioner worthy of review.
Duty & Standard of Care
Over 20 years have passed since the "high-water mark" English decision of White v. Jones[2] establishing the ability of disappointed beneficiaries to sue drafting solicitors in negligence. Courts across Canada adopted the reasoning in White v. Jones in subsequent cases over the next two decades. It is now firmly established in Canadian jurisprudence that a third party beneficiary has standing to bring a claim in solicitor's negligence against a drafting solicitor. The solicitor owes a duty to the third party despite the lack in privity of contract.
The Supreme Court of Canada set out a solicitor's standard of care in the case of Central Trust Co. v. Rafuse[3] in 1986. The requisite standard of care is that of the reasonably competent solicitor, the ordinary competent solicitor or the ordinary prudent solicitor. The standard is reasonableness and not perfection. The question is not whether the lawyer made a mistake, made an error in judgment, or was ignorant of some part of the law. The question is: would a reasonably competent lawyer, practicing in the same community at the time in question, not have made the error or shown the ignorance in question?
In the estates context, six factors have been considered in determining whether a solicitor has acted reasonably in the preparation of wills:
- The terms of the lawyer's retainer: for example whether a
precise timetable was agreed upon between the lawyer and client;
- Whether there was any delay caused by the client;
- The importance of the Will to the testator;
- The complexity of the job - for example, the more complex the
Will the more time is required;
- Any circumstances indicating the risk of death or onset of
incapacity in the testator; and
- Whether there has been a reasonable ordering of the lawyer's
priorities.[4]
Undue Influence & Solicitor's Negligence
Somewhat unique to, or at least perhaps more prevalent in, an estates practice is the issue of the possibility of undue influence.
The doctrine of undue influence is an equitable principle used by courts to set aside certain transactions inter vivos or estate documents where an individual exerts such influence on the testator, grantor, or donor that it cannot be said that that his or her decisions are wholly independent. A drafting solicitor must be diligent and alive to the indicia and potential for undue influence.
Whether or not a solicitor may be successfully sued in negligence if his or her client was unduly influenced in the drafting, preparation or arrangement for execution of testamentary documents or other estate planning documents such as a power of attorney, is not clear, and is likely dependent on the evidence and finding in the particular surrounding circumstances.
Among the many undue influence cases, there are a few reported cases where negligence claims were brought against the drafting solicitor. In the complex and lengthy decision of
Hussey v. Parsons
[5]
an elderly widow sued her former solicitor alleging that he knew or ought to have known that she was being unduly influenced to transfer her property to her nephew. Justice Puddestar found that there were "indicia of undue influence" present which "suggested that the situation as a whole was one which called for an extra degree of care and inquiry by the [solicitor] in terms of exactly what were the interests, intentions and understandings of the plaintiff".
[6]
However, Justice Puddestar also concluded that there was no actual undue influence exerted by the nephew and that with regard to any presumption of undue influence which might arise in the circumstances, the surrounding facts were such as to rebut that presumption.
Limitation Period
A claim against a solicitor in the preparation of a testamentary document, will, in most cases, not be discovered until the death of the testator. Under the Ontario Limitations Act, 2002[7] a client has two years from the date upon which the claim is discovered to commence an action against the solicitor.
This year, the Ontario Court of Appeal examined the issue of when the limitation period began to run for solicitor's negligence claim in a general context. The Court of Appeal addressed the following question: when is it reasonable for a lay person to know (i.e. discover) that she should sue her former lawyer?
In Lauesen v. Silverman[8] the client commenced an action against her former lawyer almost 6 years after the date of an improvident settlement in a personal injury case. The lawyer successfully brought a summary judgement motion dismissing the action as being statute barred. The client appealed the order.
The client claimed that although she felt the settlement was unfair in light of her injuries from her car accident she did not know the settlement was improvident, or that she had a claim against her lawyer, until she was advised by her new lawyer, based on an expert report he obtained stating that she suffered "catastrophic" injuries. The Court of Appeal agreed with the client:
. . . . The motion judge misapprehended the significance of that expert opinion. It was the first indication to the appellant and her new lawyer that her injuries from the accident were very significant and warranted more compensation than she had received from the settlement.
Furthermore, given that the appellant had no reason to believe there was anything to investigate with respect to a potential claim against the respondent, she exercised reasonable due diligence in the circumstances of this case.
[9]
Discoverability is very fact specific. In the estates context however it is likely that no injury will occur, or the injured party will not discover he or she has a claim, until after the death of the testator.
Best Practices
So, what are some considerations respecting what estates practitioners may wish to do in order to avoid or defend against a potential claim for solicitor's negligence? Consider implementing a "best practices" set of guideline in every case and consider including some of those outlined below. These are just a few considerations, not an exhaustive or comprehensive list:
- TIME CONSIDERATIONS: Do not miss time limits or cause inordinate delay in carrying out your client's instructions. Death may visit any of our clients at any time, but especially those who may be sick or ill or of an advanced age. Understand the urgency from a client who might be severely ill, i.e. time is of the essence. Come to an agreement regarding the time frame for completing the will at the outset with the client. However, also be vigilant when unreasonable time limits are imposed by the client. Decline to act where timelines are unreasonable and prevent you from consulting fully with the client and other third parties or giving a matter appropriate time and attention.
- COMMUNICATION: Be clear in communications with your clients, other solicitors, or third party beneficiaries. Manage your client's expectations through clear communications. Ask probative, open-ended and comprehensive questions which may help to elicit important information involving the psychology of the client executing the planning document. First and foremost, always take comprehensive and detailed notes.
- HIGH-RISK SITUATIONS: Be aware of high-risk situations including estate planning for spouses which impact matrimonial and family property rights; or estate freezes by parents, including where only one child may benefit from the freeze and receive the benefit of future equity growth; or estate planning involving the lawyer's family members. Be vigilant during "death-bed" planning or pre-nuptial Wills "on-the-way-to-the-alter" etc.
- AVOID POTENTIAL FOR UNDUE INFLUENCE: Set in place "best practices" to avoid the potential for undue influence:
- Interview the client alone;
- Obtain comprehensive information from the client, determine relationships between the client and family members, friends, acquaintances and draw a family tree; determine recent changes in relationships or living circumstances etc.
- Consider indicators of undue influence including whether there is an individual who tends to come with your client to his or her appointments. If so, what is the nature of that relationship?
- Is your client well-supported? Or does that support come from one family member? Or, is your client socially isolated? Is your client independent with respect to personal care and finances or does she rely on one particular individual? Is there conflict within the client's family?
- Are there any communication issues? Medical issues? Physical impairment of sight, hearing or mobility? These are just a few.
Conclusions
Certainly the case law concerning solicitor's negligence is vast, and expanding, and consequently illustrative of a need for heightened awareness and diligence. There is a defined duty of care owed by the estate planning solicitor. Solicitors must exercise diligence in avoiding acts or omission which may be detrimental to the testator/client and the intended beneficiaries.
[1]
This article is based on Kimberly's paper "Solicitor's Negligence: Estates and Trust Context", The Advocates' Quarterly, Volume 45, No.1, February 2016. While some portions of the article remain the same, the content has been updated, condensed, and revised accordingly.
[2]
[1995] ALL ER 692 (HL)
[4]
Rosenberg Estate v Black, 2001 CarswellOnt 4504 (SCJ) at para 42; McCullough v Riffert, 2010 ONSC 3891 at para. 50
[5]
1997 CarswellNfld 349 (T.D.)("Hussey")
[7]
S.O. 2002, c24, Sched B.
[8]
2016 ONCA 327 ("Lauesen")
[9]
Lauesen at paras. 42-43
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