If a notary or lawyer makes an error in the preparation and execution of the will, or fails to attend to same in a timely manner, then disappointed beneficiaries may have a valid court action against the drafting lawyer
Recent statistics issued by the Law Society indicate that approximately 4 – 6% of their claims both in number and in dollars, arise out of solicitor’s negligence relating to wills and estates. Apparently, over 40% of all claims result from either insufficient preparation or insufficient review for the task at hand. Frequently too little time was taking the testator’s instructions or reviewing the testator’s assets and potential claims against the estate, and also in preparation of the will itself.
It is the personal view of the writer that the number of claims in this area will substantially increase over the next few years. I believe that wills are “time bombs” that may blow up in the future, long after the will is prepared. One of the difficulties may well be that the standard of care with respect to solicitor’s negligence will be examined many years after the preparation of the will and the standard of care imposed by the courts may have drastically risen over those years.
2. FREQUENT ERRORS MADE BY LAWYERS IN THE DRAFT PREPARATION AND EXECUTION OF A WILL
I am attaching hereto to my paper the Law Society’s checklist for will procedure, testator interviews and will drafting.
Even if you are an experienced lawyer in this area, I urge you to take time to carefully read the checklist, as they are almost “the counsel of perfection”. I have used the checklist to cross-examine counsel in solicitor negligence cases, and it is definitely a situation where “there but for the Grace of God go I”.
I am listing for your review many of the frequent errors made by solicitors in will drafting cases, that show up in the caselaw, namely:
Failure to take detailed notes;
Failure to declare that the will was made in contemplation of marriage;
Failure to advise marriage revokes a will;
Failure to include a residue clause;
Failure to dispose of the entire residue of the estate;
Incorrectly drawing a Codicil that improperly reflects on the will;
Failure to include a specific bequest, such as a residence, contrary to the testator’s instructions, resulting in the gift following into the residue of the estate;
Failure to properly conduct Land Title searches;
Failure to sever joint ventures contrary to instructions and provisions of the will;
Incorrectly naming charities;
Failure to promptly carry out testator’s instructions;
Using words such as “issue”;
Having a spouse of a beneficiary witness the will;
Missing limitation dates such as the six month date from Letters Probate in the Wills Variation Act;
Failing to probe the testator’s mind to determine sufficient mental capacity;
Failure to interview the client in sufficient depth;
Failure to ascertain the existence of suspicious circumstances;
Failure to react properly to the existence of suspicious circumstances;
Interviewing the testator in the presence of interested party or parties;
Failing to obtain a mental status examination;
Using a term in a will that is ambiguous requiring an interpretation;
Taking instructions from a person other than the testator and failing to confirm instructions with the testator; and
Failure to provide a discretionary trust for mentally disabled children.
3. CASELAW DISCUSSION RE: STANDARD OF CARE FOR SOLICITOR NEGLIGENCE
In the Jacobsen Ford – Mercury Sales Ltd. v. Sivertz 1980 1 W.W.R. 141, it was stated:
“A lawyer is obliged to act as a “prudent solicitor” and must “bring to the exercise of his profession a reasonable amount of knowledge, skill and care in connection with the business of his client”. There is no liability for mere errors in judgment because a solicitor does not undertake not to make mistakes but only not to make negligent mistakes. The determination is said to be a question of degree, and there is a borderline between negligence and no negligence: see Linden Canadian Tort Law 1977 pp. 108 – 109.”
In Marbel Developments Ltd. v. Pirani (January 24, 1994) Vancouver Registry No. C925970, it was held that:
“A solicitor’s duty is determined by the work undertaken rather than by his or her circumstances – – the standard is only one of reasonable competence: it is not a standard of perfection — or of strict liability”.
–the court will firstly look at the nature and extent of the solicitor’s retainer.
The Supreme Court of Canada stated in Central and Eastern Trust Company v. Rafuse (1986) 31 D.L.R. (4th) 481 at 523:
A solicitor is required to bring reasonable care, skill and knowledge to his performance of the professional service which he has undertaken: see Hett v. Pun Pong 1890, 18 S.C.R. 290 at p. 292.
The requisite standard of care has been variously referred to as that the reasonably competent solicitor, the ordinary competent solicitor and the ordinary prudent solicitor.
In a recent case dealing with testamentary capacity and undue influence, Danchuk v. Calderwood 15 E.T.R. (2nd) 193, Mr. Justice Harvey totally disregarded the evidence of the solicitor who drew a will and found that if the solicitor had made proper enquiries to probe the mind of the testator, and had been made aware of the circumstances in a fuller sense, including somewhat obvious suspicious circumstances, and had further obtained the medical assessment as to the testator’s capacity, then the will would not have been prepared by the testator. The court particularly stated that the solicitor failed to:
Have regarded the circumstances of the execution of the will as suspicious, having regard to the deceased’s advance age and considerably seniority, the apparent dependency by the testator on the Plaintiff, including allowing the Plaintiff to speak for the testator;
The solicitor failed to undertake an enquiry, including interviewing the Plaintiff and the deceased separately with regard to inter alia, the dependence of the deceased in giving instructions;
The enquiries should have confirmed whether the deceased had a prior existing will and if such a will existed, what were the reasons for any variations or changes therefrom prompting the disposition being put forward;
The enquiries should have encompassed why and for what reasons the deceased had given a Power of Attorney to his daughter and why upon revocation of that Power of Attorney a new Power of Attorney was being given by the deceased to the Plaintiff;
The lawyer failed to investigate the health and mental state of the testator.
The court specifically found that a lawyer does not discharge his or her duty by simply taking down and giving expression to the words of the client with the enquiry being limited to asking the testator if he understands the words. It is an error to suppose because a person says he understands a question put to him and gives a rational answer that he is of sound mind and capable of making a will.
In the writer’s opinion, the solicitor might very well be liable in damages to the Plaintiff, including payment of the parties legal fees for prosecution or defending the court action.
The Supreme Court of Canada in Goodman Estate v. Geffen, 42 E.T.R. 97, awarded the appellant’s full reimbursement for their actual and reasonable costs including legal fees incurred in defending the respondent’s lawsuit.
The court stated that it has long been held that trustees are entitled to indemnify for all costs, including legal costs, which they have reasonably incurred. Reasonable expenses include the cost of an action reasonably defended.
It is the writer’s experience that the cost of an estate litigation trial can be very expensive, frequently taking two weeks or more, and often involving many experts. The cost for legal fees alone can be a substantial claim for damages if there is solicitor’s negligence and a causal link to the damages.
4. LIABILITY TO DISAPPOINTED BENEFICIARIES
In 1978, Justice Atkins, in Wittingham v. Crease and Company 3 E.T.R. 97, found the lawyer negligent in having a spouse of a beneficiary witness the will. This in turn caused that bequest to fail, and the solicitor was liable in damages for negligence to the “disappointed beneficiary”, in an amount being the difference between what the beneficiary received on an intestacy and what the beneficiary would have received after a successful application under the Wills Variation Act.
The following year, our Court of Appeal followed Wittingham (supra), and in Tracy v. Atkins 16 B.C.L.R. 223, found that despite the fact that the Defendant’s solicitors did not represent the Plaintiff, a lawyer could be liable to an opposing party if he or she placed themselves in a “sufficient relationship of proximity”, that he or she incurred a duty of care towards the Plaintiffs.
Thus, the B.C. Courts in the late 70’s began to allow recovery on the basis of the Hedley Byrne principle. The principle of that case is that if a person seeks information from a person possessing a special skill and trust, that person to exercise due care and if that person knew or ought to have known that reliance was being placed on his or her skill and judgment, he or she owes a duty of care to the first person. Further, absent express disclaimer of responsibility, the first person can recover damages for financial loss caused by the negligent misrepresentation, where spoken or written, of the second person.
Again in 1979, the British Court of Appeal in Ross v. Caunters, followed Wittingham and found liability against a lawyer to disappointed beneficiaries, where the lawyers had drafted a will, forwarded the will to the testator for execution, but failed to properly ensure that a beneficiary did not witness the will. A beneficiary in fact did witness the will and was successful in a claim against the lawyer for damages for the loss of the benefits under the will.
Probably the current high watermark of solicitor’s liability to disappointed beneficiaries is the House of Lords decision of White v. Jones (1995)1 All E.R. 691.
In that case a testator had a law firm prepare a will where he disinherited two daughters. He subsequently reconciled with his daughters and wrote a letter on July 17th to his lawyers requesting that they prepare a new will with a specific gift to each of the two daughters. The law firm never did prepare the will prior to the testator’s death on September 14th. The two daughters brought an action for negligence and recovered their loss from the lawyers.
The majority of the House of Lords held that Hedley Byrne cannot properly give rise to a tortious liability. There is no duty of care other than to the client, and Hedley Byrne ought not to apply in cases of pure economic loss, and there is no “loss in not receiving a gift”. In the result, the House of Lords fashioned a new basis for a remedy based on a concept of “transferred loss”, that is since the deceased cannot take action against the solicitor for breach of the retainer, the right to do so was treated as transferred to the beneficiary.
It would appear that this White v. Jones approach gives rise to the argument that liability to the beneficiary is necessarily limited by the terms of the contract of retainer of the solicitor.
The following excerpt from the decision pretty well sums up this area of law, namely:
“The very purpose of the employment of the solicitor is to carry out the client’s wish to confer a particular testamentary benefit on the intended beneficiary. There is no other purpose. If the solicitor negligently fails to achieve that purpose, justice requires that there should be some remedy available”.
The recent British Columbia decision of Smolinski v. Mitchell, 10 B.C.L.R. (3rd) 366, also involved an action against a lawyer where there was delay in carrying out the client’s instructions to prepare a will.
The testator in fact intended to leave a bequest to the solicitor, and the solicitor therefore advised the testator he would have to get independent legal advice and complete the execution of the will elsewhere. The lawyer drafted the will, delivered it to the testator, and left it to the testator to arrange to get independent legal advice. The testator however died before the will was ever executed, and the residue was distributed on an intestacy.
The court absolved the lawyer from any liability on the basis that the lawyer here had a duty to ensure that the testator obtained independent legal advice. The delay, and possibly the non-execution of the will occurred because of the Defendant’s advice that the testator obtain independent advice and execute the will before an independent lawyer. In the unusual circumstances, there was no duty of care owed by the Defendant to the Plaintiff to see to the expeditious execution of the will. It could not be said that the Defendant failed to take reasonable care to ensure that the testator met with and received advice from an independent lawyer.
I have heard of a California decision where liability was found against a solicitor who took four days to draft a will for a patient who was very ill and in the hospital. The patient died before the will was executed and the disappointed beneficiaries succeeded against the lawyer. I have no reason to believe that this case would also succeed in British Columbia, although it would depend on the degree of illness of the patient, as to whether four days was a reasonable period of time.
In Hickson v. Wilhelm (September 26, 1997)(Sask. Reg. No. 554), the Plaintiff was an employee of the testator, and the Defendant were lawyers retained by the testator. The testator retained the lawyers to incorporate a farming operation and some of the testator’s assets included farm land were transferred to the corporation, although the testator retained bare legal title to the land. He later drafted a will by a lawyer who was a member of the law firm that incorporated the farm. The testator left the land to the Plaintiff and after his death, the land bequest failed because the corporation owned the land despite the fact that it remained registered in the testator’s name. The land was sold and the proceeds were distributed to the residual beneficiaries of the will.
The court found that the Defendant solicitor who had prepared the will was negligent in that he did not meet “the requirement for due diligence in this case with the result that the role and involvement of the corporation and the ownership of the farm assets was not identified in the bequest of land to the Plaintiff as expressed in the will were ineffectual and failed”.
The court found that the facts warranted a conclusion that the testator bore a degree of responsibility for the instructions which he gave the lawyer, and attributed a 25% liability to the testator, and 75% to the lawyers. The liability aspect is under appeal.
There is now over 20 years of jurisprudence that clearly establish that a solicitor can be liable in negligence to a disappointed beneficiary, who loses his or her inheritance as a result of a lack of due diligence on the lawyer’s part that causes the disappointed beneficiary to not inherit as was contemplated by the testator.
Given the number of wills that have been prepared over the years, and the ever increasing degree of the duty of care owed by a solicitor to his or her clients and beneficiaries, gives reason to believe that claims by disappointed beneficiaries against solicitors will only increase in the future.