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Negligent solicitor advice may result in legal action

People who seek the counsel of a solicitor, do so because they are in need of assistance with a legal matter. In most situations when someone does not have knowledge of the specific topic, this is a good course of action. Accordingly, it makes sense there would be an expectation that the advice provided by the solicitor would be well thought out. Unfortunately this is not always the case. Recently, a global firm was ordered to compensate a commodities business intelligence firm due to negligent advice the firm provided.

The matter for which advice was sought, involved part of the remuneration for the former chief executive of the commodities business intelligence firm. As a part of that remuneration, there was a long-term incentive plan. If the business sold for more than £11m, the chief executive was supposed to receive a certain amount of the proceeds.

The issue arose when the firm was asked to provide advice on the incentive plan. It was found that in 2007 and 2008, the firm provided incorrect advice after it did not identify or ask for documents that were missing. Specifically the firm did not discover an email that would have indicated that if the sale was not completed before the chief executive left the company, he would not be entitled to anything.

Ultimately, the discovery of the email in 2010 prompted the company to inform the former chief executive that it did not need to pay him the incentive. In response, the former chief executive took legal action against the commodities business intelligence firm. He was successful and the commodity business intelligence firm then took action against the global firm. In that legal proceeding, the breach of duty the firm was found to have committed led to an order to pay £118,125.

The failure of a solicitor to provide advice could result in financial loss. As this case illustrates it may be possible to recoup that loss via legal action against the negligent solicitor. Working with a firm that handles cases of this nature is advisable.

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Authorised and regulated by the Solicitors Regulation Authority (SRA) SRA number 48369