Montagnani: Professional indemnity risk to firms
There is a “growing body of opinion” that conveyancers have a duty of care to advise clients on the risks climate change represents to property, it was claimed today.
It follows a poll by environmental analytics business Groundsure found 68% of lawyers at its recent conveyancing climate change conference in London believed they were under a duty to advise on climate risks.
Stephen Tromans QC told the event that the conveyancer’s duty to draw their client’s attention to risks, and advising on ways to manage them, could evolve as new risks became apparent, for example as with contaminated land.
Environmental lawyer Stephen Sykes, managing partner of the Sykes Partnership, added: “The climate crisis will have real and significant repercussions for millions of property owners across the UK.
“While lawyers are not climate scientists, that does not mean that borrowers should be left high and dry to draw their own conclusions about these risks. There is a growing body of opinion that solicitors have a duty to advise clients about climate risk.
“In light of this, prudent lawyers will follow the Law Society’s exhortation in its Climate Resolution 2021 to become better informed about climate risk and to make good use of climate data now that it is available.”
Dan Montagnani, chief executive of Groundsure, said: “The main argument on whether a duty of care applies in respect of climate change may rest on the ‘fair, just and reasonable’ test and the particular circumstances of the case.
“Given the growing awareness of climate risk in the UK, the likelihood and scale of climate risk, the response of professional bodies and legal commentators, and the availability of data to explain climate risk impacts on specific properties, judges are likely to conclude it would be ‘fair, just and reasonable’ to extend the duty of care which lawyers owe to clients to include a duty to advise them about climate risk.”
He urged property lawyers to proceed on the basis that they owed their clients a duty of care to advise on climate risk.
Almost all of the solicitors polled said that, bearing in mind the numbers of properties at risk and the professional indemnity implications of failing to discharge their duty of care, they would be recommending that their law firm adopts practices and procedures about climate data.
They also acknowledged that few conveyancers currently did so, however. Mr Montagnani said: “More understanding is needed on two fronts: the risks to the transaction from climate change, and the potential professional indemnity and legal risks to the practice.”
Groundsure offers a product, ClimateIndex, that shows predicted climate impacts on specific properties.
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