The claimant had instructed the defendant solicitors to act for him, where he was to contract with another client of the same solicitor in a land development. The solicitor failed to disclose that the other client had convictions for dishonesty, and also that the solicitor had himself leant the deposit in the transaction to his other client. The claimant sought damages when the other client proved a man of straw.
Held: If a solicitor accepted conflicting duties, he had a duty to fulfil them both, and could not prefer the interests of one client over another. The fact of the conviction was not as such confidential, but the solicitors had a duty to further the interests of that client which would require them not to volunteer the information.
Lord Walker of Gestingthorpe said: ‘A solicitor’s duty to his client is primarily contractual and its scope depends on the express and implied terms of his retainer . . The relationship between a solicitor and his client is one in which the client reposes trust and confidence in the solicitor. It is a fiduciary relationship . . A solicitor’s duty of single-minded loyalty to his client’s interest, and his duty to respect his client’s confidences, do have their roots in the fiduciary nature of the solicitor-client relationship. But they may have to be moulded and informed by the terms of the contractual relationship.’ The Appeal court was wrong to distinguish Moody v Cox, and the appeal succeeded: ‘it is now 15 years since Mr Hilton suffered a grievous wrong for which he has not been compensated. For the good name of the solicitors’ profession his compensation should be agreed, on a generous scale, without further delay.’
Judges:
Lord Hoffmann, Lord Hope of Craighead, Lord Scott of Foscote, Lord Walker of Gestingthorpe, Lord Brown of Eaton-under-Heywood
Citations:
[2005] UKHL 8, Times 04-Feb-2005, [2005] 1 WLR 567, [2005] 1 All ER 651, [2007] Lloyds Rep PN 1
Links:
Jurisdiction:
England and Wales
Citing:
Cited – Moody v Cox and Hatt CA 1917
An action was brought for rescission of a contract of sale of a public house and four cottages, with a counterclaim for specific performance. The sellers, Hatt and Cox, were respectively a solicitor and his managing clerk. They were the trustees of . .
Appeal from – Hilton v Barker Booth & Eastwood (a Firm) CA 22-May-2002
The firm of solicitors acted for both parties in a conveyancing transaction, in a situation when they were permitted to do so. The firm had previously acted for one party in a case where he had been convicted of a crime. The other party said the . .
Cited – Hospital Products Ltd v United States Surgical Corporation 25-Oct-1984
High Court of Australia – A solicitor’s duty of loyalty to his client’s interest, and his duty to respect his client’s confidences, have their roots in the fiduciary nature of the solicitor-client relationship, but may have to be moulded and . .
Cited – Mothew (T/a Stapley and Co) v Bristol and West Building Society CA 24-Jul-1996
The solicitor, acting in a land purchase transaction for his lay client and the plaintiff, had unwittingly misled the claimant by telling the claimant that the purchasers were providing the balance of the purchase price themselves without recourse . .
Cited – Kelly v Cooper and Another PC 25-Nov-1992
There was a dispute between a client and an estate agent in Bermuda. The client sued the estate agent for damages for breach of duty in failing to disclose material information to him and for putting himself in a position where his duty and his . .
Cited – Farrington v Rowe McBride and Partners 1985
(New Zealand) When a solicitor acts for two clients and there is a conflict in his responsibilities, the solicitor must ensure that he fully discloses the material facts to both clients and obtains their informed consent to his so acting. There may . .
Cited – Clark Boyce v Mouat PC 4-Oct-1993
(New Zealand) No duty of wisdom is owed to client in full command of his faculties by a lawyer. If the client requires only action from his lawyer, that is what is required. Informed consent can be sufficient to allow a solicitor to act for two . .
Cited – Mortgage Express Ltd v Bowerman and Partners (A Firm) CA 1-Aug-1995
A solicitor acting for both a lender and a borrower was under a duty to disclose relevant information to the lender client. An incident of their duty to exercise reasonable care and skill, solicitors are obliged to advise their lender client in . .
Cited by:
Cited – Burkle Holdings Ltd v Laing TCC 23-Mar-2005
The parties had each instructed the same solicitor, but now disputed the entitlement of the other to see documents held by the solicitor. . .
Cited – Quinn Direct Insurance Ltd v The Law Society of England and Wales CA 14-Jul-2010
Q had provided professional indemnity insurance to a firm of solicitors in which the Law Society had intervened. Claims were made against the firm, but Q declined to pay, saying that the apparently fraudulent activities of the firm fell outside the . .
Lists of cited by and citing cases may be incomplete.
Legal Professions, Contract, Professional Negligence
Updated: 26 July 2022; Ref: scu.222204