After failing to advice a former divorce client on her eligibility for her spouse’s pension, a law firm in Essex was forced to pay her £400,000, heard in the High Court.
His Honour Judge Coe KC, sitting as a judge of the High Court, found that the claimant, Joanne Lewis, entered into an unfair settlement agreement with her former husband, in particular she did not obtain a pension sharing order and in consequence suffered financial loss in the region of £500,000.
Due to the fact that there had not yet been any financial disclosure, the firm made no comments to Lewis regarding whether or not the settlement of £62,000 on a “clean-break basis was fair and reasonable”.
Lewis was requested to sign a disclaimer stating that she understand this by the company, but she later filed a negligence claim for breach of duty.
Judge Coe KC said the heart of the case is a dispute between the parties as to the scope of the defendant’s retainer. It is the claimant’s case that the settlement she reached with her husband (Mr Mayne) was so obviously unfair on the basis of what was known about her husband’s pension and the parties’ assets at the time that she should have been advised to apply for a pension sharing order and that Form P should have been sent to Mr Mayne or his solicitors or his pension provider.
The judge said that Lewis was an unsophisticated client and had no knowledge of financial affairs. This was because her husband had not only managed all the finances, but in fact had controlled the household finances and her spending.
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.”
The judge said that it was “not enough to inform the claimant of the existence of pension sharing orders” and that 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”.
Full case: Joanne Lewis v Cunningtons Solicitors