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You are here: BAILII >> Databases >> England and Wales Court of Appeal (Civil Division) Decisions >> John Mowlem Construction Plc v Neil F Jones & Co [2004] EWCA Civ 768 (30 June 2004) URL: http://www.bailii.org/ew/cases/EWCA/Civ/2004/768.html Cite as: [2004] EWCA Civ 768, [2007] Lloyd's Rep PN 4 |
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COURT OF APPEAL (CIVIL DIVISION)
ON APPEAL FROM QUEEN'S BENCH DIVISION
TECHNOLOGY and CONSTRUCTION COURT
HIS HONOUR JUDGE RICHARD HAVERY Q.C.
HT – 03 - 21
Strand, London, WC2A 2LL |
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B e f o r e :
LORD JUSTICE TUCKEY
LORD JUSTICE KAY
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JOHN MOWLEM CONSTRUCTION PLC |
Appellant |
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- and - |
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NEIL F. JONES & CO. |
Respondent |
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Smith Bernal Wordwave Limited, 190 Fleet Street
London EC4A 2AG
Tel No: 020 7421 4040, Fax No: 020 7831 8838
Official Shorthand Writers to the Court)
R. STEWART Q.C. and L HILLIARD (instructed by Barlow, Lyde & Gilbert) for the Respondent
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Crown Copyright ©
Lord Justice Tuckey:
As soon as you first become aware of a claim or circumstances which could give rise to a claim please ensure that the appropriate PI director is notified immediately to enable them to advise us. They should be notified irrespective of:
- the amount which may be involved
- your personal views or opinions on liability
- whether you consider the claim or circumstances may be spurious or without merit
- whether you consider the claim or circumstances may disappear.
Failure to notify on time could prejudice the position of your insurers and your firm which could lead to a breach of policy conditions and a rejection of the claim.
Each year when the cover was renewed the brokers reminded Mr Povey of the policy conditions governing the notification of claims and of:
Your obligation to keep insurers notified not only of any actual claim but also of any circumstances which may subsequently result in a claim against you.
Based on this evidence the judge concluded that Mr Povey "was perfectly competent to deal with CSW's professional indemnity insurance".
Our client can and will look to your client for reimbursement of any and all monies it is required to pay to the MOD or any other third parties for any breaches of its contractual obligations to the MOD or any other third parties which have been brought about or contributed to by your client's negligence and/or breach of contractual duty to our clients in respect of the project.
A large contingent claim of this kind had been intimated to the arbitrator. Mr Povey said he was confident that there was no basis for such a claim which he believed was a bluff designed to frighten CSW off. The Solicitors were inclined to agree that this was a tactical ploy. CSW rejected the offer and the arbitration proceeded.
PLEASE NOTE IT IS IMPERATIVE THAT THIS QUESTION IS ANSWERED CORRECTLY, AS FAILURE TO DO SO COULD PREJUDICE YOUR RIGHTS IN THE EVENT OF A CLAIM ARISING IN THE FUTURE.
Mr Povey had answered "No" to the questions "Have any claims been made against the firm?" and "Are any of the directors aware of any circumstances which may give rise to a claim?".
Given that allegations are being made in the counterclaim in respect of which – should Mowlem prove to be successful in their arguments – your insurers will prima facie be obliged to make payment then it is advisable to notify your insurers of the claims if you have not already done so.
At the end of July Mr Povey told Miss Llewellyn that he had notified insurers of the claim. In fact, as the judge found, he had not done so. The judge accepted the brokers' evidence that he did not notify them of the claim until 21 October 1997.
I go back to the principle enunciated by Mr Justice Oliver in Midland Bank v Hett Stubbs and Kemp. The test is what the reasonably competent practitioner would do having regard to the standards normally adopted in his profession. Or, to adopt the phraseology of Mr Justice Laddie in Credit Lyonnais v Russell Jones and Walker, ought Mr Simon Baylis to have noticed, from 14 February 1997 or at any time until the counterclaim was served, the risk that the insurance cover would be lost without notification? The matter must not be considered using hindsight. All the circumstances are relevant. Among those circumstances are these: that the initial instructions were simply to prosecute the claim; and the reasonable belief, that the proposed counterclaim was merely a defensive tactic, notwithstanding the large figures mentioned. Those figures evidently did not impress themselves, even on the mind of Mr Roe at the time. I conclude that the failure on the part of the defendants to advise CSW about their insurance cover, in circumstances where there were no express instructions to give such advice, is something that a reasonably competent practitioner, adopting the standards normally adopted in his profession, could have done. Thus I dismiss the claim.
The subject of PI coverage related to our dispute with JMC has become an increasingly more important issue, with wide reaching consequences. My initial reaction, when aware that JMC were pursuing ourselves in an attempt to trigger this policy, was negative. I believed that if we had no PI cover then JMC would probably cave in and settle our claim for additional monies. This in reality may still be the case.
The judge said:
Whether that was in truth [Mr Povey's] view in February 1997 does not appear. It is of course possible that he was seeking, after the event, to justify his failure to notify the counterclaim when he completed the proposal for the 1997 insurance, I cannot say what would have happened if [the Solicitors] had advised Mr Povey to notify the counterclaim to the brokers in sufficient time. If they had given bare advice to notify the brokers without more, Mr Povey might well have ignored it, given that he had ignored the advice that was given in July 1997 for three months and given the views expressed in his note of 20 July 1998. If, on the other hand, Mr Simon Baylis had had occasion to advise Mr Povey against a deliberate policy of avoiding the cover, he might have been able to persuade Mr Povey against it. The burden lies on the claimants to prove causation of their loss. In ordinary circumstances a court would readily infer the ordinary links in the chain of causation. But the evidence in this case leaves me in the position that I am unable to say what would have happened if the advice in question had been given. Thus the claimants have failed to satisfy me that the loss they have suffered was caused by the fact that [the Solicitors] did not advise CSW about its insurance. On this ground also the claim must be dismissed.
No doubt the duties owed by a solicitor to his client are high in the sense that he holds himself out as practising a highly skilled and exacting profession. But I think that the court must beware of imposing upon solicitors, or upon professional men in other spheres, duties which go beyond the scope of what they are requested and undertake to do. It may be that a particularly meticulous and conscientious practitioner would, in his client's general interest, take it upon himself to pursue a line of enquiry beyond the strict limits comprehended by his instructions. But that is not the test. The test is what the reasonably competent practitioner would do, having regard to the standards normally adopted in his profession … the duty is directly related to the confines of the retainer.
In Credit Lyonnais v Russell Jones and Walker [2002] EWHC 1310 (CH) at para. 28 Laddie J. said:
A solicitor is not a general insurer against his client's legal problems. His duties are defined by the terms of the agreed retainer. … .the solicitor has only to expend time and effort in what he has been engaged to do and for which the client has agreed to pay.
He is under no general obligation to expend time and effort on issues outside the retainer. However, if in the course of doing that for which he is retained, he becomes aware of a risk or a potential risk to the client, it is his duty to inform the client. In doing that, he is neither going beyond the scope of his instructions nor is he doing extra work for which he is not to be paid. He is simply reporting back to the client on issues of concern that he learns as a result of and in the course of carrying out his express instructions.
… if a dentist is asked to treat a patient's tooth and on looking at the latter's mouth he notices that an adjacent tooth is in need of treatment it is his duty to warn the patient accordingly. So too, if, in the course of carrying out instructions within his area of competence, a lawyer notices or ought to notice a problem or risk for the client, of which it is reasonable to assume that the client may not be aware, the lawyer must warn him.
Lord Justice Kay: I agree.
Lord Justice Judge: I also agree.
Order: