Description
An action concerning the scope of a solicitor's authority to act in a conveyancing transaction. The pursuers sought damages on the grounds that their solicitors accepted a qualified acceptance on their behalf without instruction. The issues were first, whether or not there had been a breach of authority and if so, whether or not the solicitors were exonerated by the pursuers' ratification and secondly, the quantification of damages for a solicitor's breach of duty as conveyancing solicitors.
Action dismissed. Held; i) The general rule is that the agent is not liable to the principal for exceeding authority where the principal ratifies the contract. As such, if the principal wishes to maintain rights against the agent for acting outwith their authority it must be express. Where exoneration of the agent's liability is disputed by the principal, it is for the principal to show they took steps to preserve their rights against the agent. The factual basis pled by the pursuers did not necessarily support a case based on breach of agency as opposed to solicitor's negligence. The court distinguished between the scope the solicitor's authority acting as an agent for a principal and the contractual duty to exercise the knowledge, skill and care of a reasonably competent firm of solicitors providing conveyancing legal services. Although the pursuers had not seen the qualified acceptance they had nevertheless given the solicitors authority to conclude the bargain. The contract was ratified by the pursuers' payment and taking of title. Therefore, without an averment that in ratifying the contract the pursuers had preserved their rights against the solicitors the action based on the breach of agency was irrelevant; ii) There is no presumption that the measure of damages for a solicitor's negligence in a conveyancing transaction is the diminution of value of the property. Although there may be cases where that is the proper measure, the general rule remains that the quantification of damages depends on the facts and circumstances of the case. Where solicitors are in breach of an implied term to use the knowledge, skill and care of a reasonably competent firm of solicitors providing conveyancing legal services, it is necessary to see what the consequences are for the client. That will depend on the extent and scope of the breach. Where, as in the present case, it is a failure to advise on modifications to conditions in an offer to purchase it is necessary to identify the modifications, narrate the advice that might reasonably be expected from a reasonably competent firm of solicitors and the action that might have been taken in respect of such advice. Then the court will be able to approach the issue of damages which flows from the breach. In this case, there was no doubt that the solicitors were under a duty to inform the pursuers of the qualification and were therefore in breach of the term of the contract that the solicitor would use the knowledge, skill and care of a reasonably competent firm of solicitors providing conveyancing legal services. That duty entailed not merely advising the pursuers of the terms of the qualifications, but also offering advice as to the implications of the qualifications, followed by instruction. However, no attempt was made to identify the modification or modifications which caused a problem to the pursuers, the advice that might have been expected to have been given, the pursuers' attitude to such advice or the loss that they incurred as a result. In the absence of such averments, there was nothing to demonstrate how items of expenditure flowed from the firm's alleged breach of duty.
