Tuesday, October 22, 2013

Adviser liability as a facilitator

Photo Credit: SalFalko cc
A recent post profiled a court decision where a lawyer was held liable for failing to have a client's estate planning instructions implemented within the space of a few days.

A number of advisers have made contact since the earlier post, concerned about their potential liability in similar circumstances.

While there does not appear to be any particular case exactly on point, we believe the broad position is as follows:
  1. advisers will potentially be liable for a failure to deliver to the standards that they promise, or alternatively, the standards expected of a competent adviser working in the area; 
  2. it is therefore important that advisers ensure that both their promotional material and their retainers clearly articulate the level of service being provided and then ensure that they perform at least to that standard; 
  3. in this regard, articulating what will not be done is often at least as important as setting out what will be done; 
  4. it should generally be relatively easy for most advisers to discharge their professional obligation in the estate planning space by simply ensuring that the law firm that they partner with is engaged early in the process, and that the relevant law firm accepts the client’s instructions; 
  5. certainly, a large part of the success of our wholesale platform via View Legal seems to have come from the fact that its entire foundation is built on a collaborative approach with the adviser facilitating the process and the deliberate accepting of all legal risks associated with the process - this is in direct contrast to virtually all other alternatives that advisers have, such as online will providers and ‘will kits’; 
  6. despite the above, there is an increasing amount of publicity about law firms marketing to disgruntled beneficiaries about their ability to sue advisers such as financial planners, accountants and risk advisers (in addition to suing other law firms), and in the vast majority of the promotional material, these law firms advertise their services on a 'no win no fee' basis – this trend would seem to suggest there will be increasing litigation in the area; and 
  7. in this context, the recent situation where the solicitor was sued for negligence is a timely reminder for all advisers to have a bias towards compliance, best practice and continual improvement of their service offering. 
Until next week.