Firm’s negligent advice to divorcing husband led to “over-generous settlement”

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18 November 2016

Divorce case: settlement over-generous

Divorce case: settlement over-generous

A judge has ruled that the advice lawyers gave in ancillary relief proceedings was negligent and that if the claimant had been properly advised, he would have settled on better terms.

But he dismissed an allegation that the solicitor had fabricated her file notes.

Sitting in the Leeds county court, HH Judge Behrens decided in Hogg v Crutes LLP [2016] EW Misc B29 (CC) that the then head of the family department at north-east firm Crutes (since merged with DWF), should have advised Brian Hogg that by offering his wife all of a £140,000 pension fund as part of a settlement, he was offering too much.

Before an ancillary relief hearing listed for 3 July 2008, the district judge had indicated a provisional view that Mrs Hogg should be entitled to 58% of the Hogg Trust, of which Mr Hogg was the primary beneficiary.

HHJ Behrens said: “It may be that Mrs Hogg was seeking more. However, Mr Hogg’s lawyers should have analysed the arithmetic and satisfied themselves that Mrs Hogg’s demands were unrealistic. Mr Hogg should have been given that advice.”

Mr Hogg denied he had authorised the transfer of the whole of the trust and complained that he was not given proper advice.

In relation to another complaint, Crutes admitted that an equalising payment had been negligently computed at £24,000, twice the correct sum, and that Mr Hogg was in any event entitled to judgment in the sum of £12,056 plus interest.

The judge dismissed a third complaint in relation to a further £35,000 pension fund.

The case was complicated by the fact that the solicitor was now suffering from advanced multiple sclerosis, and while she gave a witness statement, the judgment noted that she suffered from a cognitive impairment and could lose her train of thought easily.

However, the judge preferred to rely on her file notes and contemporaneous correspondence rather than Mr Hogg’s witness statement, which alleged that the solicitor fabricated the file notes.

But the judge said that while he was satisfied that Mr Hogg had given instructions to offer the whole of the Hogg Trust, the offer was “overgenerous”. He continued: “In my view any competent matrimonial solicitor or counsel should have appreciated that fact and given clear advice to Mr Hogg to that effect.

“He should in my view have been advised that the capital offered was more than 50% of the total capital assets, and that there was no need to offer more than the 58% suggested by the actuary in relation to the Hogg Trust….”

“I am not satisfied that either [the solicitor or counsel] ever advised fully or clearly on the offer. It is not clear why. It may be that they did not analyse the figures sufficiently carefully. This is demonstrated by the mistake that was made over the balancing payment.”

HHJ Behrens assessed damages at 42% of the value of the trust, £57,192, plus interest. But he allowed a 5% discount to take into account that had it gone to an ancillary relief hearing in 2008, the judge may have made an income award against Mr Hogg.

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