The Law Society of England and Wales v Schubert Murphy (A Firm), Court of Appeal - Civil Division, August 25, 2017, [2017] EWCA Civ 1295

Issuing Organization:Civil Division
Actores:The Law Society of England and Wales v Schubert Murphy (A Firm)
Resolution Date:August 25, 2017

Case No: A2/2015/0358

Neutral Citation Number: [2017] EWCA Civ 1295




[2014] EWHC 4561 (QB)

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 25/08/2017

Before :





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Between :

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Timothy Dutton QC, Rupert Allen (instructed by Bevan Brittan LLP) for the Appellant

Charles Dougherty QC, Matthew Thorne (instructed by XL Catlin Services SE) for the Respondent

Hearing dates : 13 July 2017

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JudgmentLord Justice Beatson :

I Overview

  1. The question before the court is whether it is arguable that the appellant, the Law Society of England and Wales (``the Law Society''), owes a duty of care to solicitors and others who use its online ``Find a Solicitor'' facility. The Law Society appeals against the Order of Mitting J dated 17 December 2014 dismissing its application for summary judgment and/or to strike out the claim brought by the respondent, Schubert Murphy, a firm of solicitors which used ``Find a Solicitor'' to check on the person and the firm named as the solicitor to the vendor of a property its client, a Mr Christofi, wished to purchase. Permission to appeal was refused on the papers on 29 May 2015 by Briggs LJ, but was granted by Hallett LJ on 16 December 2015 after a hearing.

  2. Schubert Murphy claimed damages for negligence and for a contribution under the Civil Liability (Contribution) Act 1978 in respect of losses suffered by the firm and Mr Christofi as a result of the Law Society's online response to its search on the ``Find a Solicitor'' facility. The search was about the status of a Mr John Dobbs and a firm, ``Acorn Solicitors''. The response confirmed the existence of Acorn Solicitors with an address in Rotherham and that its principal was John Dobbs, a registered solicitor. There was in fact no such solicitor and no such firm. Schubert Murphy was the victim of a fraud. It had transferred the purchase price to the fraudster after it had been given what purported to be a solicitor's undertaking to discharge the vendor's mortgage over the property. The fraudster absconded with the funds without discharging the mortgage. The principal issue is whether there is a real prospect of Schubert Murphy establishing that: (a) the Law Society owed it a duty of care as a result of the entry on its ``Find a Solicitor'' search function, or (b) placing the names of Mr Dobbs and Acorn in the database amounted to a representation at all.

  3. Because the website is widely used by solicitors and the general public, the underlying claim raises the important question whether a duty of care arises, here by the Law Society, where information is provided by a digitised system online rather than in response to an inquiry made in person, over the telephone, or in a letter. The judge considered the outcome could have important ramifications for the security of conveyancing and the sort of inquiries conducted by a solicitor who is unfamiliar with the person who is representing the counterparty in a transaction. More generally, the question is whether solicitors and members of the public who rely on the ``Find a Solicitor'' (hereafter ``FAS'') facility do so at their own risk.

  4. I am grateful for the helpful submissions of Mr Tim Dutton QC and Mr Rupert Allen on behalf of the Law Society and of Mr Charles Dougherty QC and Mr Matthew Thorne on behalf of Schubert Murphy.

  5. The remainder of this judgment is organised as follows. Part II sets out the material legislative and regulatory provisions concerning the Law Society's obligations to maintain a list of all solicitors on the Roll. Part III summarises the factual background to the appeal. Part IV summarises the judgment below. Part V summarises the positions of the parties. Part VI contains my analysis of the law and the reasons for my overall conclusion, which is summarised in the next paragraph.

  6. I have concluded that the judge was correct to refuse the Law Society's application for summary judgment or for the claim to be struck out. Notwithstanding the undoubted difficulties in establishing that a regulatory or professional body owes a duty of care to its members or to the public, the determination of whether a duty arises in the present circumstances is fact-sensitive. It requires the answers to several questions which cannot be determined without further inquiry into the facts. These include whether the relationship between Schubert Murphy and the Law Society was sufficiently proximate, whether Schubert Murphy was individually identifiable, and the wider purpose and consequences of imposing or not imposing a duty in these circumstances. Accordingly, I would dismiss the appeal.

    II The legislative and regulatory framework:

  7. The Law Society is the body which has the responsibility for the representation and regulation of solicitors in England and Wales. Its regulatory responsibilities under the Solicitors Act 1974 (``the 1974 Act'') are delegated to the Solicitors Regulation Authority (``the SRA''), which, although not a separate legal entity from the Law Society, is functionally independent from it.

  8. Section 6 of the 1974 Act obliges the Law Society to keep a list of all solicitors ``on the Roll''. Section 10A of the 1974 Act requires the Law Society to keep a register of all solicitors who hold practising certificates.

  9. The regulatory objectives of the approved regulator, i.e. the SRA, are stated in Part 1 of the Legal Services Act 2007 (``the 2007 Act''). They include, see section 1(1)(d) of the 2007 Act, ``protecting and promoting the interests of consumers''. The Law Society is obliged, under section 28 of the 2007 Act, to act in a way which is compatible with the regulatory objectives, so far as is reasonably practicable.

  10. At the material times, the relevant regulations were the Solicitors (Keeping of the Roll) Regulations 1999 (``the 1999 Regulations'') These were made pursuant to power in section 28 of the Solicitors Act 1974 (before 19 August 2003) by the Master of the Rolls with the concurrence of the Lord Chancellor and the Lord Chief Justice, and since that date by the Master of the Rolls with the concurrence of the Secretary of State and the Lord Chief Justice. and the SRA Practising Regulations 2009 (``the 2009 Regulations''). These were made by the SRA Board pursuant to powers in the Solicitors Act 1974 and Schedule 14 to the Courts and Legal Services Act 1990, with the approval of the Legal Services Board under paragraph 19 of Schedule 4 to the Legal Services Act 2007. They were both replaced by amended regulations on 6 October 2011. The Solicitors (Keeping of the Roll) Regulations 2011 and the SRA Practising Regulations 2011 were made by the SRA Board, under sections 28, 79 and 80 of the Solicitors Act 1974, with the approval of the Legal Services Board under paragraph 19 of Schedule 4 to the Legal Services Act 2007.

  11. Regulation 2B of the 1999 Regulations requires the Roll to be kept in electronic form. Regulation 2D provides that:

    ``(a) Entries on the Roll under (a), (c), (d), (e), (g) and (h) must be available for inspection by any member of the public during office hours without charge, except that the SRA may in exceptional circumstances, and if it considers that to do so would be in the public interest, withhold the address of a solicitor's principal place of business.

    (b) The date on which a solicitor's name was

    (i) removed from or

    (ii) struck off

    the Roll must be made available to a member of the public on request.'' See also Regulation 10.3 of the SRA Practising Regulations 2009.


  12. Regulation 2.2 of the 2009 Regulations provides:

    ``Where application is made under regulation 2 for a practising certificate or for replacement of a practising certificated the SRA must grant the application if:

    (a) the applicant's name is on the Roll of solicitors;

    (b) the applicant is not suspended from practice as a solicitor;

    (c) the applicant has supplied satisfactory evidence that he or she will comply with or be exempt from the Solicitors' Indemnity Insurance Rules; and

    (d) the application is made in accordance with these Regulations,

    and the SRA must not grant the application unless conditions (a) to (c) are met.''

  13. Regulation 4 of the 2009 Regulations deals with applications to be a recognised sole practitioner. Regulation 4.2 provides:

    ``(a) The SRA may grant an application under regulation 4 if the applicant:

    (i) will be practising as a sole practitioner from an office in England and Wales;

    (ii) is not, and is not about to be made, subject to a condition on his or her practising certificate or registration which would prohibit practice as a sole practitioner;

    (iii) has adopted a name under which his or her firm is to be recognised, and which complies with rule 7 of the Solicitors' Code of Conduct; and

    (iv) complies with (or has a waiver of) rule 5.02 of the Solicitors' Code of Conduct; and

    (v) complies with the Solicitors' Indemnity Insurance Rules in respect of his or her firm.''

  14. The Law Society has given advice to solicitors about the problem of fraud in conveyancing transactions, in particular the present scenario of fraudsters posing as conveyancing solicitors before absconding with the purchase funds. It has done so in a Practice Note dated 15 April 2009 and in its Conveyancing Handbook. The Practice Note recommends checking the status of the person acting for either party in a conveyancing transaction with their regulatory body. Paragraph 4.3 states:

    ``Identify other solicitors or conveyancers. Fraudsters may pose as a solicitor or a conveyancer acting for either party to add greater legitimacy to the transaction. If you do not know them, you should check the recognised directory of their professional body.

    · The Law Society...''.

    The glossary to the Practice...

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