Discovering a problem with a property after you've bought it is frustrating enough. Finding out that your solicitor should have spotted it before you completed can be even worse, particularly if the mistake has left you facing a substantial financial loss.
Perhaps an overlooked restrictive covenant prevents you from extending your property, an unexpected title defect affects its value, or an important legal issue was never explained before you exchanged contracts.
These situations can have expensive consequences. However, not every solicitor's mistake gives rise to a conveyancing negligence claim.
To recover compensation, you will generally need to establish that your solicitor failed to exercise reasonable skill and care, that this failure caused financial loss and what would probably have happened had the conveyancing been handled competently.
This article explains how conveyancing negligence claims are assessed, what compensation may be available and the steps you can take if you believe your solicitor made a costly mistake.
Key Takeaways
- Conveyancing negligence may arise where a solicitor fails to identify or properly advise on an important legal issue affecting a property transaction.
- A solicitor's mistake does not automatically entitle you to compensation. You must generally establish breach of duty, causation and financial loss.
- Compensation is usually intended to put you in the financial position you would have been in had the negligence not occurred.
- Claims may involve a reduction in property value, reasonable remedial costs or other financial losses caused by the solicitor's mistake.
- The amount recoverable depends on the evidence and what would probably have happened if competent advice had been provided.
Conveyancing matters where solicitors’ negligence is suspected are common and they cover a wide spectrum of complexity and value. It is essential to seek specialist legal advice as quickly as possible once a potential claim is identified. Delay can be damaging to the prospects of securing compensation, and there is a need to focus evidence at the earliest opportunity. Tony Hill - Head of Professional Negligence & Commercial Litigation
What Is Conveyancing Negligence?
Conveyancing negligence occurs when a solicitor fails to exercise the reasonable skill and care expected of a competent conveyancing professional and that failure causes financial loss.
When buying a property, you rely on your solicitor to investigate its legal title, consider relevant searches, review contractual documents and explain material legal risks.
The precise responsibilities depend on what the solicitor was instructed to do.
For example, if a solicitor fails to identify a restriction that significantly affects how a property can be used, there may be grounds for a claim.
However, an error or disappointing outcome does not automatically establish negligence.
A professional negligence claim generally involves four elements:
Duty: What was the solicitor responsible for doing?
Breach: Did their work fall below the standard expected of a reasonably competent conveyancing solicitor?
Causation: What would probably have happened if the solicitor had acted competently?
Loss: What measurable financial difference did the failure make?
All four must be considered when assessing whether compensation may be available.
Common Examples of Conveyancing Negligence
Conveyancing mistakes can arise at different stages of a property transaction.
Potential examples include:
- Failing to identify restrictive covenants, rights of way or title defects.
- Failing to carry out appropriate searches or properly explain their results.
- Overlooking significant lease restrictions or an unexpectedly short remaining lease term.
- Failing to advise on planning or building regulation issues revealed by the documents.
- Making errors concerning boundaries, access or Land Registry protection.
- Incorrectly preparing documents relating to joint ownership.
- Failing to warn a buyer about a significant legal risk before exchange or completion.
Consider someone purchasing a property with plans to build a substantial extension.
After completion, they discover a restrictive covenant that may prevent the proposed development. If their solicitor should reasonably have identified and explained that restriction, the buyer may have grounds to investigate a negligence claim.
Whether compensation is available will depend on the circumstances, including what the buyer would have done had they received the correct advice.
It is also important to distinguish legal issues from physical defects. A conveyancing solicitor is not ordinarily expected to identify building defects in the same way as a surveyor.
How Much Can You Claim for Conveyancing Negligence?
There is no fixed compensation tariff for conveyancing negligence claims.
The amount recoverable generally depends on the financial loss caused by the solicitor's breach.
Damages are usually assessed by comparing your actual financial position with the position you would probably have been in had the solicitor acted competently.
For example, a buyer may have paid £700,000 for a property without knowing about a restrictive covenant that materially reduced its development potential.
If competent advice would have led the buyer to negotiate a lower purchase price, the loss may be connected to the difference in value.
Alternatively, the evidence might show that the buyer would have withdrawn from the transaction altogether.
In that situation, the assessment may involve losses associated with entering a purchase they would otherwise have avoided.
However, not every financial loss that follows a solicitor's mistake will necessarily be recoverable. The loss must be sufficiently connected to the breach and fall within the scope of the solicitor's duty.
Diminution in Value
One common measure of loss is diminution in value.
This considers whether a legal problem the solicitor should have identified meant that the property was worth less than the price paid.
The assessment is usually made by reference to the property's value at the date of purchase.
For example, a title defect may substantially reduce a property's market value, even if correcting the problem would cost a different amount.
Independent valuation evidence may therefore be needed to establish the financial impact.
This can be particularly important in high-value residential, commercial and development transactions.
Can You Recover the Cost of Fixing the Problem?
Sometimes a conveyancing error can be addressed through additional legal work.
This might involve obtaining a deed of variation, securing an easement, correcting a title registration or arranging suitable insurance.
Reasonable costs incurred in resolving a problem may potentially form part of a negligence claim where they were caused by the solicitor's failure.
However, the cost of putting something right is not automatically the correct measure of compensation.
If a proposed solution is disproportionate or would leave the claimant in a better position than they should have been in, damages may be assessed differently.
What About Additional Financial Losses?
Some conveyancing errors can affect more than the immediate value of the property.
A business might discover that it cannot use newly purchased premises for its intended purpose.
An investor could lose rental income, while a developer may find that legal restrictions prevent a planned project from proceeding.
These losses may potentially be recoverable, depending on the evidence.
The claimant must establish that the losses were caused by the solicitor's negligence and fall within the scope of the duty owed.
Has a conveyancing solicitor's mistake caused you financial loss?
Whether your solicitor overlooked a title defect, restrictive
covenant or another important legal issue, our professional
negligence team can review the circumstances and assess
whether you may have grounds for a compensation claim.
What Would You Have Done With Correct Advice?
One of the most important questions in a conveyancing negligence claim is what you would have done if your solicitor had identified the problem.
It may not be enough to show that you should have been warned.
You may also need to establish that the warning would probably have changed your decision.
For example, you might have:
- Withdrawn from the purchase.
- Negotiated a lower price.
- Required the seller to resolve the issue.
- Obtained additional legal protection.
- Changed the structure of the transaction.
- Purchased a different property.
The evidence supporting your position can be crucial.
Emails discussing your intended use of the property, development plans, funding documents or correspondence with the seller may help demonstrate what you would realistically have done.
Where the alternative outcome also depended on another person's decision, such as whether a seller would have accepted a lower offer, the position can be more complicated.
In some circumstances, the court may assess the value of a genuine lost opportunity rather than requiring proof that a particular outcome would definitely have occurred.
What Evidence Is Needed for a Conveyancing Negligence Claim?
Conveyancing negligence claims often depend heavily on the original transaction records.
Useful evidence may include:
- The solicitor's engagement letter and terms of business.
- The conveyancing file.
- Contracts and title documents.
- Property searches and reports on title.
- Emails and correspondence.
- Land Registry records.
- Planning or development documents.
- Independent property valuations.
- Invoices for remedial work.
- Evidence of additional financial losses.
An independent legal expert may be required to assess whether the solicitor's work fell below the expected professional standard.
Separate valuation evidence may also be needed to establish the financial consequences.
How Do You Make a Conveyancing Negligence Claim?
The first step is usually to review the solicitor's work and identify the alleged mistakes.
A claim must explain what the solicitor should have done, how their conduct fell below the required standard and what financial loss resulted.
This gives the solicitor, and potentially their professional indemnity insurer, an opportunity to investigate and respond to the allegations.
Some disputes can be resolved through negotiation or alternative dispute resolution without a trial.
Where liability or the amount of compensation remains disputed, court proceedings may be necessary.
How Long Do You Have to Make a Claim?
Conveyancing negligence claims are subject to limitation periods.
A six-year period will often be relevant, although the point from which it runs depends on the legal basis of the claim.
This is generally subject to a 15-year longstop from the negligent act or omission.
These date-of-knowledge provisions do not extend the limitation period for a claim brought in contract alone.
It is therefore important not to assume you have plenty of time simply because a property problem has only recently come to light.
Complaints and negotiations do not automatically stop limitation periods from running.
What Should You Do If You Think Your Conveyancer Was Negligent?
If you believe your solicitor made a costly mistake, begin by gathering the relevant documents and recording when you discovered the problem.
It can also help to write down what you were told during the transaction, what you would have done differently and the financial consequences you have experienced.
Avoid assuming that the cost of correcting the issue represents the full value of your claim.
The appropriate measure of compensation depends on what would probably have happened had the solicitor provided competent advice.
Specialist legal advice can help establish whether there was a breach of duty, whether that breach caused financial loss and what compensation may potentially be available.
If you believe a conveyancing solicitor's mistake has caused you significant financial loss, Wealth Recovery Solicitors can review the circumstances and explain the options available to you.
FAQs
Can I claim if I have already completed the property purchase?
Potentially. Many conveyancing problems only become apparent after completion. The important questions are what the solicitor should have identified and whether the failure caused financial loss.
Does a solicitor's mistake automatically mean I can claim compensation?
No. A mistake may amount to poor service without establishing professional negligence. You will generally need to prove breach of duty, causation and financial loss.
Can I claim the full cost of repairing a property?
Not necessarily. Conveyancing solicitors primarily deal with legal aspects of a transaction rather than physical building defects. Even where legal errors result in remedial costs, the recoverable amount depends on the circumstances.
What if I would never have bought the property?
This may be highly relevant. If the evidence shows that competent advice would probably have caused you to withdraw, it can affect both causation and the calculation of compensation.
Should I complain to the solicitor first?
A solicitor's complaints procedure can be useful for service concerns. However, a complaint is not the same as pursuing compensation for substantial professional negligence losses. Limitation periods should be considered separately.