If there is one news article from us that you should read it’s this one. Never have we had such an important message for you. Read on.
Leading solicitors Bird and Bird have just been found liable in the High Court for a £2M breach of duty after failing to advise their client of a planning application close to a £25M London property.
Paul Addison, Managing Director, DevAssist, asks
How much more evidence do you need to be convinced that you need to take more care with planning searches?
I have spent many years trying to convince the conveyancing community that they needed to undertake far more rigour when it comes to reviewing planning search information. It’s an essential part of the risk elimination process, and credit to those of you who embraced us. To those who didn’t, now is the time to listen. Far too often I heard the ‘I let my client make that decision’ excuse when you should have been telling them what is best for them.
It should be of no surprise to you that the public don’t understand planning searches and they expect you to provide guidance. Fear not, this doesn’t mean you, it means people like us, the experts that can interpret the planning data for you, and your client, and then let them make an informed decision. I don’t want my builder to advise me on heart surgery as much as your clients don’t want development advice from you, and never ever let the patient interpret the X-Rays?
Fail to embrace this and you’re walking the path that Bird and Bird have just followed…
Heads need to be stopped being buried in the sand. Case law now demands that worn attitudes need to change.
After all, doing the same on a £25M purchase was a decision that cost up to £2M – not a good day at the office!
Rebecca Chow purchased a seven bedroom property at 56 Avenue Road, London NW8. A £2.75m deposit had been paid. On discovering that a new academy school, housing 1400 pupils and some six stories in height had received full planning permission for development close to the property, she withdrew from the purchase. Matters were settled with the vendor, but the client pursued Bird and Bird for half of the deposit, plus costs.
The court found that Bird and Bird had a clear duty of care to Ms Chow to advise on the contents of the Plansearch report that was obtained which highlighted the presence of this planning application. I have some sympathy with Bird and Bird as I have always praised Planning data, but recognised the unappealing presentation of hundreds of mostly irrelevant planning applications. However there is, and almost always in London, a needle in that haystack. DevAssist is very good indeed at finding those needles as well as forecasting where development may occur. Had Bird and Bird used our service perhaps this may never have happened. That we will never know. What we do know is that the precedent is established and to ignore what we do is like playing Russian Roulette with your clients money and your PI.
It was argued that Bird and Bird should have stressed the negative impact given the property’s intended use ahead of the purchase and that this represented a clear breach of duty.
His Honour Judge Mark Pelling QC said:
It was a breach of duty to say, as was said, that the information provided did not reveal anything that adversely affects the property.
It is for the client to judge the impact of the material, not the solicitor.
Given that Ms Chow had intended to spend £25m on the purchase, plus a further £4m on refurbishment, the client was fully entitled to take the view that the construction of the school was an adverse factor that mitigated against proceeding and one which ‘altered the risk profile’ of the purchase.
And what is clear is that the stakes are high in London – not only on the investment capital at risk, but also making decisions in the context an ever changing and fast moving development landscape.
Potentially millions of pounds of damages can be avoided by conveyancers safeguarding their client’s funds and mitigate their firm’s negligence risk by getting more detailed interpretation on planning searches.
DevAssist has developed our DevLondon report to combat exactly this kind of scenario. It delivers a unique two stage research process that critically analyses land use zoning, existing and dormant planning applications.
But it also goes back to the council to seek updates on any key changes just ahead of completion – in this way. There is a double lock on making sure clients get crystal clear advice that can be relied on and thus avoid the negligence trap that Bird and Bird stepped into.
Why should you be concerned with making critical judgements on whether the client should proceed, but they should rely on professionals like us to provide the guidance that will help the client decide.
For more information on DevLondon, our CPD training and all our products planning and development risk reports, visit www.devassist.co.uk or call 01342 890010