Lawyers’ Duty to Client in Tort - Elizabeth Case Study - Law Assignment Help

Assignment Task:

Elizabeth is a solicitor who has just established her own practice as a sole practitioner. Elizabeth has established a successful and growing practice advising clients about business sales, management and governance. Elizabeth usually advises small to medium sized ‘family’ businesses. Elizabeth was contacted by email by three prospective clients, Stuart, Mary and Victoria. Stuart, whose email account was used to contact Elizabeth, explained that he and his two partners wished to sell the business premises that they owned in Sydney “very quickly” as the corona virus pandemic had caused a downturn in their income and they wished to avoid insolvency. Stuart further explained that he would be happy to meet with Elizabeth via ZOOM meetings when the pressures of transitioning the business to an online business allowed, but Mary and Victoria were otherwise busy running their business and/or busy with newly increased family responsibilities (home schooling) and would be unlikely to meet Elizabeth. Elizabeth understood all of this as she was equally frantic meeting the needs of her clients and transitioning to an almost completely online practice. 

Using email, Elizabeth explained to the three prospective clients, that she was reasonably experienced in the particular legal area – a commercial transaction involving the sale of their business. Elizabeth advised her prospective clients that a barrister’s advice might be required in relation to the tax implications of their sale. The clients emailed Elizabeth and indicated that they wished to use Elizabeth’s services and also agreed to Elizabeth seeking the barrister’s advice if necessary. Elizabeth sent to, and received from, her clients a signed costs agreement and retainer. Elizabeth determined that the tax advice was necessary and contacted the barrister, Harriet. Harriet developed the advice and sent it to Elizabeth. Elizabeth briefly perused the advice, and while she had reservations about certain aspects of it, forwarded it to her clients as quickly as possible as she was extremely busy. Elizabeth’s clients accepted and acted on the advice – by signing the documentation - but unfortunately the advice was deficient in several respects – particularly because Harriet had misconstrued some facts without checking those with Elizabeth. Mary and Victoria suffered significant financial loss when the sale of their business proceeded. This was, in large part, because Mary and Victoria had never given Elizabeth permission to act for them: Stuart had acted on his own, forged their signatures, and had never discussed the sale of the business with them. Stuart had taken the proceeds of the sale, which had been delivered into their joint bank account, and had disappeared. Mary and Victoria had been given notice to leave their business premises by the new owners and also had to pay a tax bill that they had never contemplated. Mary and Victoria initiated civil action in negligence against Elizabeth and Harriet. Mary and Victoria also made a complaint to the Law Society and Bar Association of New South Wales. In response to the civil and ethical processes initiated against her Harriet wrote to Elizabeth and explained that she, Harriet, was not liable in any way because she is a barrister.

Elizabeth and Harriet have separately approached you for advice and to make submissions about their potential civil and ethical liability. You should understand that your submissions should be based on the law, as you understand it. You are not obliged to make strictly partisan (client-oriented, client-winning) submissions if your view is that your clients’ positions are not sustainable or correct. You are also entitled to be completely candid with the court about what you know – you are not subject to normal rules regarding client confidentiality or conflict of interests.
 

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