UK: Law firm to pay ex-client £400,000 for negligent divorce advice

A British law firm has been ordered to pay a former divorce client £400,000 after failing to advise on her entitlement to her husband’s pension.

A High Court, found in Joanne Lewis v Cunningtons Solicitors that the firm should have advised the client in clear terms that she should apply to share her husband’s pension pot worth potentially £1m.

Instead, claimant Joanne Lewis agreed a settlement to receive £62,000 on a clean-break basis, with the firm making no comment to her on whether such an agreement was fair and reasonable because there had been no financial disclosure at that stage. The firm asked Lewis to sign a disclaimer saying she understood this, but she later brought a negligence claim for breach of duty. 

Coe said the heart of the case was a dispute about the scope of the defendant’s retainer. The claimant had submitted her former solicitors were wrong to say they could not advise her without full financial disclosure. The firm said it had discharged its duty and that Lewis had chosen to make direct settlement negotiations with her ex-husband.

The judge said Lewis had been an unsophisticated client with no knowledge of financial affairs who had been bullied and intimidated by her former husband. It was further found that the firm knew Lewis had complained of being bullied and felt pressurised by her ex-husband.

Coe said the client had been ‘desperate’ after the end of her 23-year marriage in 2012. Her husband’s police pension was by far and away the largest asset which should have been ‘actively considered’ by the solicitors.

The judge added: ‘Any reasonably competent solicitor would have advised the claimant that the proposed settlement order was obviously and exorbitantly one-sided in the husband’s favour, giving the claimant less than 15% of the disclosed matrimonial assets and leaving her with an inadequate financial provision in the future, and particularly in retirement.'

Coe said the client was not offered the advice she should have been about the reasonableness of the settlement and had been required to sign a disclaimer that her solicitors were not able to advise. This was a ‘clear’ breach of duty, as the firm had enough information to advise, even if in general terms.

The disclaimer did not say Lewis could ‘never go back’, but that was her understanding of it, which was reinforced by the number of times the firm said it could not advise her.

‘It was not enough as I find to refer to a pension sharing order as one of the possible orders that a court could make,’ said the judge. ‘It was not enough to inform the claimant of the existence of pension sharing orders. It was not enough in the face of the information about Mr Mayne’s pension to indicate that Mr Mayne’s level of offers were unlikely to be fair. Mrs Lewis needed clear advice about what she could reasonably hope to achieve.’