Lawyers Covered: March 2025

It can be tough for busy lawyers to find enough time to service clients, make it safely through the regulation obstacle course, win new work and keep up-to-date with developments, but we've got you covered! Welcome to our Lawyers Liability & Regulatory Update, in which we highlight the last month's key developments affecting lawyers and the professional risks they face.

High Court endorses law centre’s reliance on counsel

The High Court has rejected a professional negligence claim brought against a law centre and a barrister over advice given to a claimant facing possession proceedings due to unpaid service charges. The claimant alleged that she had been negligently advised between 2012 and April 2013 to sell her flat, as she was told she had no defence to forfeiture.  

The court found that no negligence had been established, ruling that the advisers had acted appropriately based on the available information, with an endorsement of the centre's reliance on specialist advice. In particular, the court found that:

• Barristers sometimes need to address issues that they had not been asked to advise about (which is consistent with Laddie J's rotten tooth analogy), but their duty does not include advising on points that they do not consider to be properly arguable. The court considered whether no reasonably competent barrister specialising in housing issues would have failed to plead the point and concluded that it was right that the barrister did not address points which were bound to fail. Had the barrister pursued points that were bound to fail, this would have breached their professional conduct duties. 
• The barrister in this case did not know about some rent invoices and had not been put on enquiry causing him to investigate and discover them. 
• The law centre had not been negligent in failing to investigate whether there had been demands for rent in circumstances where the client did not provide them to her solicitors. As such, the law centre could not have negligently failed to pass the invoices on to the barrister. 
• The law centre's argument that it reasonably relied on counsel succeeded. It was normal use of the Bar for a solicitor to get a barrister's advice in a field or on a point of law upon which they had no specialist experience. While the law centre did have experience in housing and debt, it was not experienced in the technicalities of relief against forfeiture, so it had been wise to instruct counsel.  

The court also determined that, even if negligence had occurred, the claim was time-barred, as any alleged damage arose when a district judge dismissed the possibility of a forfeiture defence in June 2013—more than six years before the claim was issued. 

This judgment treads well-worn arguments common in lawyers' liability cases and will provide comfort to solicitors relying on counsel in areas of law outside their expertise. However, the judgment emphasises the need for solicitors to apply their judgment to counsel's advice, rather than "acting as a post-box" and unquestioningly following counsel's recommendations – which is also in line with existing case law.  

Similarly, the judgment emphasises the importance of properly instructing counsel, as the solicitors would have been negligent had they known about the rent invoices but failed to pass them onto counsel. This highlights the tension faced by many solicitors, especially in lower value cases or cases where the client has limited means, between providing every document to counsel to ensure that nothing is missed, and providing only the key documents in order to control counsel's fees. 

Finally, the judgment serves as a reminder to solicitors to ensure that they adequately investigate the availability of documents, rather than simply proceeding on the basis of those that the client considers key. 

Conduct of litigation remains in spotlight as SRA investigates Horizon lawyers

The SRA has expressed its intention to take action, as soon as possible, in respect of solicitors' conduct during the inquiry into the Post Office IT scandal. In a recent statement, the SRA explained that "from wrongful convictions through to financial ruin and devastating personal consequences, the miscarriages of justice in this case have severely impacted the lives of hundreds of SPMs [sub-postmasters and mistresses]."

Emphasising its role in protecting the public and maintaining trust and confidence in the profession, the SRA confirmed that it currently has more than 20 live investigations into solicitors and law firms who represented the Post Office/Royal Mail Group. A wide range of issues are being considered, including:

• management, supervision, strategy and conduct of prosecutions and of litigation (including group litigation in Mr Bates v The Post Office);
• duties relating to expert witnesses;
• disclosure obligations, including the improper application of privilege to protect communications from disclosure; and
• issues relating to the operation of the Post Office Complaint Review and Mediation Scheme, including overcharging of claimants, use of non-disclosure-agreements and labelling of correspondence.

The SRA is also considering the conduct of solicitors in relation to their engagement and cooperation with the public inquiry. 

The SRA has confirmed that it will take action where it finds evidence that solicitors have fallen short of the standards the public expects, and has been liaising with the police to understand what action, if any, they might take. The statement also emphasised the SRA's own powers, including fining solicitors and traditional law firms up to £25,000 and putting controls on how they practise, or sending cases to the Solicitors Disciplinary Tribunal in cases of more serious misconduct.

The SRA's statement confirmed that it expects to launch prosecution action in some cases this summer.

Commonhold's time to shine?

The Commonhold White Paper marks a significant step towards reform of the property ownership system in England and Wales by shifting away from (and possibly abolishing) leaseholds. The White Paper aims to make commonhold the default tenure for flats meaning owners will no longer be beholden to third-party freeholders. 

Commonhold ownership has been possible in England and Wales since 2004 (under the Commonhold and Leasehold Reform Act 2002). The system was designed as an alternative to leasehold ownership to allow flat owners to own their property outright. In a commonhold model, flat owners own the freehold interest in their flat and a "commonhold association" (i.e. all flat owners in a block) owns the freehold interest in the common parts of the building (stairs, lifts, carparks etc.), as well as the building itself. However, it has rarely been used in practice with the government estimating fewer than 20 developments have adopted it. 

The government has now committed to a Commonhold Reform Bill, to be published later this year. The plans will ‘give homeowners a stake in ownership of their buildings’, without the burden of ground rent, and hand them ‘power, control and security over their homes’. Under the plans, it is not just new-build properties that are affected. A ‘comprehensive new legal framework for commonhold’ is also expected to be introduced, making it simpler for existing leaseholders to convert their properties. If fully implemented, the reforms have the potential to revolutionise home ownership in England and Wales, bringing it in line with property systems in countries like Australia and the US.

The challenges arising from a wholesale change of property ownership systems will be plentiful, particularly due to the lack of experience setting up commonholds in the conveyancing sector, and previous reticence from lenders to support such developments. Perhaps most challenging will be the conversion of the almost 5 million existing leaseholds in England. With specialist legal advice almost certainly likely to be required for conversions, the reforms have the potential to create a two-tier system where only those leaseholders able to afford the legal fees are able to convert to commonhold. There is also the potential for disputes within leasehold management companies as some tenants can afford an increase in service charge to cover the fees, while others may not be able to do so. 

Caveat emptor and the story of the moth-ridden mansion

On 10 February 2025 the High Court handed down its Judgment in (1) Iya Patarkatsishvili; (2) Yevhen Hunyak v William Woodward-Fisher [2025] EWHC 265 (Ch), a case which emphasises the serious repercussions which can arise if a seller is found to have made false representations in a property transaction. 

The Claimants sought to rescind their purchase of a £32 million townhouse in Notting Hill on the grounds that the seller had failed to disclose a moth infestation in response to an enquiry which asked whether there had previously been a vermin infestation. The court decided that infestation of moths included an infestation of vermin in this context and found that the seller's response to the pre-contract enquiries amounted to fraudulent misrepresentation. Despite the Claimants' delay in issuing proceedings, the Court found the Claimants were entitled to recission of the property and awarded substantial damages for losses they incurred. 

This case serves as a powerful reminder that responses to pre-contract enquiries should be carefully checked, and answers must be honest. As highlighted by the judgment, a dishonest seller will not be entitled to rely on the principle of caveat emptor ("buyer beware"), although the court did emphasise that there remains no duty of disclosure on a seller of property, except where the failure to disclose would mean information given to the buyer was misleading and/or dishonest. 

Compulsory adjudication for costs disputes on the horizon?

Lord Justice Coulson, the Court of Appeal judge who leads on costs issues (often sitting on costs appeals), has said that costs disputes with a value of more than £100,000 should be subject to compulsory adjudication. 

Speaking at an event organised by the Association of Costs Lawyers, LJ Coulson said that adjudication works brilliantly for construction disputes and that adjudication was an obvious solution for costs disputes worth more than £100,000. Whereas some forms of ADR (for example mediation) can be derailed if a party isn't keen on participating, there is little of that in adjudication. LJ Coulson suggested that adjudication should be compulsory, with decisions temporarily binding and money paid before either party can challenge the decision. 

Costs disputes often take a long time to resolve and can be expensive. Adjudication would enable the parties to streamline resolving a costs dispute and at a much faster pace, without the need for the parties to wait for a court hearing date. Practitioners should consider adjudication as a way of resolving costs disputes now; we can then wait to see whether it becomes compulsory in the future.

Sanctions for two judges due to their delays

In two separate incidents, judges have received sanctions for misconduct due to delay in drafting judgments. Sanctions for misconduct by judicial office-holders are set out in the Constitutional Reform Act 2005. Sanctions are, in order of severity: formal advice, formal warning, reprimand and removal from office.

Liam Varnam, an employment judge, was referred to the Judicial Conduct Investigations Office (JCIO) for a pattern of repeated and serious delays in completing work, including "eight long delayed judgments and orders", two of which were still outstanding at the time of the referral (according to the statement from the Judicial Conduct Investigations Office). It was found that he had not followed guidance to report outstanding judgments to his leadership judge, had not responded to chasing correspondence either at all or in a timely way and had not shown insight into the impact of his failings on parties or the system as a whole. He was issued with a formal warning for misconduct. EJ Varnam cited professional issues as a reason for the delays, and has expressed regret for them. He explained the steps that he has taken with his judicial mentor judge to progress the outstanding matters.

Separately, district judge Colin Bosman has been given formal advice for misconduct. According to the JCIO, a referral had been made that DJ Bosman had delayed approving an order following a financial remedy hearing, which took place 12 months prior to the complaint. This had apparently caused significant financial prejudice. DJ Bosman accepted responsibility for the delay and provided an apology. In mitigation he said that he had not received the draft order from the parties until 4 months after the hearing, and said he had a heavy work load. He has set up a new system to ensure work is completed on time. The nominated judge found that the delay was in breach of standards of conduct, and had clearly disadvantaged the claimant. 

With an average of 76.8 weeks from issue of proceedings to trial according to latest MOJ figures, delays after the trial will frustrate parties; however, as public servants, judges are not at liberty to incur additional support costs in the same way that lawyers in private practice may be able to. The increase of generative AI may help lighten the load, with Lord Justice Birss being the first judge to disclose using ChatGPT to help write a judgment last year. In the meantime, the justice select committee has launched an inquiry into delays in the county court and was due to hear evidence from the Master of the Rolls and Lord Justice Birss (the Deputy Head of Civil Justice) on 18 March 2025.

Hong Kong – Solicitor Advocates and "Senior Counsel (SC)" Title

Solicitors in Hong Kong obtained the right to apply for higher rights of audience accreditation in 2012.  Higher rights of audience ("HRA") in this context refers to the High Court and Court of Final Appeal. To date, approximately 100 solicitors have become "Solicitor Advocates"; out of approximately 11,400 practising solicitors. Accreditation is obtained through application to a "Higher Rights Assessment Board" which is a thorough process.

Since solicitors in Hong Kong obtained the right to apply for HRA the profession has sought legislative change that would allow senior solicitor advocates to be appointed as "Senior Counsel" ("SC"); an equivalent of "King's Counsel" ("KC") in England and Wales. This issue was again in the news recently when the President of the Law Society wrote an open message in the profession's official journal, the Hong Kong Lawyer,  in March 2025, stating that:

"Solicitor-advocates who satisfy the substantive eligibility requirements to be Senior Counsel, but are not admitted as barristers, should be treated equally and be given an opportunity to receive fair recognition."

Currently, as things stand, only an experienced barrister or "legal officer" (as defined pursuant to section 2 of the Legal Officers Ordinance) is eligible to be appointed as Senior Counsel; section 31A of the Legal Practitioners Ordinance. A "Barrister" is a defined term pursuant to the Legal Practitioners Ordinance and different to a solicitor in Hong Kong's "split profession". Therefore, a solicitor is not eligible to be appointed as Senior Counsel. This is in contrast to England and Wales where a senior solicitor advocate can be appointed as "KC". 

The Law Society has again proposed a legislative amendment to allow senior solicitor advocates to be appointed as "SC". However, legislative amendment is unlikely any time soon. Rightly or wrongly, such an amendment could be seen as a threat to the Bar Association and, in the current circumstances in Hong Kong, is unlikely to find much support with some key stakeholders – for example, senior judges.  

In the meantime, more solicitors should gain HRA and undertake advocacy in the High Court. There should be Solicitor Advocate "SC" in Hong Kong one day; however, for now, this is probably several years away.

Thanks to our additional contributors: Aimee Talbot, Sally Lord and Cat Zakarias-Welch