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Delictual Liability Of An Attorney For A Negligent Misstatement

Few attorneys give thought to whether their statements (or misstatements) to the party on the other side of a matter can give rise to delictual liability. However, it appears that our law does recognize a claim like this, and below are the principles that a court will consider when deciding to hold an attorney liable.

In Jowell v Bramwell-Jones 1998 (1) SA 836 (W), the court stated obiter that “there is no conceptual obstacle in our law to an attorney being held liable in delict to a non-client for damages caused by negligence”. The court explained further that “a defendant may be held liable ex delicto for causing pure economic loss unassociated with physical injury but before he is held liable it will have to be established that the possibility of loss of that kind was reasonably foreseeable by him and that, in all the circumstances of the case, he was under a legal duty to prevent such loss occurring.”

In Road Accident Fund v Shabangu and Another 2005 (1) SA 265 (SCA), the court accepted that, in the jurisprudence of other countries as well as SA law, an attorney can be liable to a person with whom that attorney is not in a contractual relationship. The SCA referred to Hedley Byrne and Co Ltd v Heller and Partners Ltd [1964] AC 465 (HL), for the proposition that a solicitor owes a duty not only to the client who employs him, but also ‘to another who he knows is relying on his skill to save him from harm’. This is the so-called ‘assumption of responsibility’ test.

It appears that not much further was said in our case law about the liability of attorneys to non-clients, but then the UK Supreme Court heard Steel and another v NRAM Limited [2018] UKSC 13. In the Steel case, the Supreme Court held that a borrower's solicitor (attorney) did not owe the lender on the other side of the transaction a duty of care. The lender, who was unrepresented, had relied to its detriment on misstatements made by the borrower’s solicitor without conducting any independent checks of its own. Lord Wilson considered that finding a duty of care by a solicitor in a case like this rests on establishing an “assumption of responsibility” by the solicitor, which hinges on a two-pronged inquiry: (i) was it reasonable for the plaintiff to have relied on the representation, and (ii) did the defendant reasonably foresee that the plaintiff would do so?

For a better understanding of the "assumption of responsibility" principle, we need to return to a case that has been extensively referred to in South African law: Caparo Industries Plc v Dickman [1990] 1 All ER 568. In that case, the House of Lords held that, for a defendant to owe another a duty of care in delict, the following requirements must be met:

  • It must be foreseeable that the defendant might cause the claimant loss;
  • There must be a sufficient degree of proximity between the parties; and
  • It must be fair, just and reasonable to impose a duty.

The court explained the principle of proximity in the following terms:

  • As between the alleged wrongdoer and the person who has suffered damage, is there a sufficient relationship such that, in the reasonable contemplation of the former, carelessness on his part may be likely to cause damage to the latter?
  • Did the defendant know that his statement would be communicated to the plaintiff, and that the plaintiff would be very likely to rely on it for the purpose of deciding whether or not to enter upon the transaction in question or upon a transaction of that kind?
  • Are there any considerations which ought to negative, or to reduce or limit the scope of the duty or the class of person to whom it is owed or the damages to which a breach of it may give rise? For example, in Fourway Haulage SA (Pty) Ltd v SA National Roads Agency Ltd 2009 (2) SA 150 (SCA), the court explained that delictual liability may be refused where it would impose an additional burden on the defendant which would be unwarranted, or which would constitute an unjustified limitation of the defendant's activities.

Closing Thoughts

A review of the above English and South African cases shows that there is a high burden on a plaintiff who relies on a negligent misstatement made by the other side’s attorney. The requirement of proximity means that the plaintiff must prove that the attorney foresaw that the plaintiff would rely on his statement, and that it was reasonable for the plaintiff to rely on the statement. In the absence of these requirements, a court will be reluctant to find that a special relationship of proximity existed and that the attorney had assumed responsibility for the client on the other side.

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Ivor Heyman is an advocate at the Johannesburg Bar. He publishes articles of interest to attorneys and their clients. For questions or comments you can reach him at adv.heyman@gmail.com or 061-120-8740.