4 July 2005
27 November 2013
23 June 2014
21 May 2014
11 December 2013
2 December 2013
It is encouraging that the courts will still look closely at the scope of a professional's duty. It is less helpful that reported cases create uncertainty as to where the lines are drawn. While the common theme is that a professional is not under a duty to point out the obvious, what that is depends on the circumstances of the relationship and the individual client.
In Taylor Thomson v Christie Manson & Woods & Ors (2005), wealthy art collector Taylor Thompson sued auction house Christie's after she discovered that the pair of 18th century vases purchased for £1.9m could be fakes worth a fraction of the price.
The vases were described in the Christie's catalogue as "Louis XV". Thompson was a keen private collector who had made a number of auction purchases but never before to the value of the vases.
During a private viewing, a Christie's representative, in his role as special client adviser, told Thomson that the vases were high-quality examples of 18th century craftsmanship. He did this knowing that Thompson had no relevant expert knowledge and was not seeking independent expert advice.
Thomson gave evidence that she relied wholly on the advice given by Christie's and would not have bid for the vases had she known of the slightest risk of authenticity.
It was conceded at the trial that Christie's owed Thomson a duty to use reasonable skill and care in describing the vases and in making statements to her about their date and quality, but it denied that this extended to qualifying the description in the catalogue.
After considering extensive metallurgical evidence, Mr Justice Jack found that the vases were genuine, expressing his certainty of that at 70 per cent. However, the special relationship between the parties created a duty for Christie's to advise Thomson of the risk that the vases may not be authentic. Christie's failed in that task.
Christie's appealed. It argued that it was only required to qualify the description in the catalogue if there was any real doubt about authenticity. Here it had been established that the risk that the vases were not genuine were fanciful. As counsel put it, there was no duty to warn Thomson about the obvious, theoretical risk that others might not agree with Christie's own competent, unqualified yet reasonably held opinion. The Court of Appeal agreed.
Another case, Pickersgill v Riley (2004), is among the most important recent decisions to examine the scope of the solicitor's duty. In the case, Lord Scott said: "It's a duty that's not helpful to describe in the abstract. The scope of duty may vary depending on the characteristics of the client, insofar as they're apparent to the solicitor." He gave the example of a youthful client, unversed in business affairs and who might need advice from their solicitor before entering into a commercial transaction. The same advice, said Scott, would be pointless, or even an impertinence, for the solicitor to offer to an obviously experienced businessperson.
Thomson may well view herself as comparable to Scott's youthful client - she was hardly an expert on Louis XV urns - and while it may be right, as the court found, that it is obvious to any buyer that matters of date and quality are matters of opinion, the level of certainty and the basis for the opinion are far from obvious.
Thomson highlights the importance of the professional knowing their client, understanding the client's objective and explaining their role in achieving that objective. Those factors will define the professional's duty and should identify where the risk areas lie. Professionals should protect themselves by agreeing with the client at a face-to-face meeting what work will be undertaken and then committing that agreement to writing. As far as identifying that elusive animal, the obvious risk, what the recent authorities demonstrate is that each case will be determined on its own facts: what was documented, what the professional knew, the nature of the transaction and the particular characteristics of the client.
Mickaela Fox, partner, Weightmans