Rickards & Anor v Jones

On a preliminary issue, the court must confine itself to breach of duty, negligence and causation. It should not determine the amount or full consequences of loss unless that is necessary to decide those issues. In conveyancing negligence, the question is whether a reasonably competent solicitor should have taken a simple step, such as contacting the relevant insurer, where the validity of protection depended on circumstances not resolved by the documents. The court did not finally decide that question because the parties were given an opportunity to resolve the dispute through alternative dispute resolution.

The claimants purchased a newly built house relying on documentation purporting to provide NHBC protection. Their solicitors received the documentation before completion but delayed returning the acceptance form. The NHBC later stated that the builder had ceased to be a member before the sale and that no warranty existed.

The county court judge declared that the solicitors were not in breach of duty. The claimants appealed. The Court of Appeal examined whether the solicitors should have contacted the NHBC between exchange and completion to confirm that the offer remained available, but adjourned further proceedings before finally determining the appeal.

1. Scope of the preliminary issue. The trial was directed to breach of duty, negligence, causation of damage and limitation before quantum. The judge therefore erred in treating the question whether completion caused recoverable loss as effectively determined, particularly where the pleaded loss included entering into a purchase which would not otherwise have been completed.
2. Potential breach. The solicitors were not criticised for failing to obtain the NHBC documentation earlier or for failing to send the acceptance form before completion. Even prompt receipt and dispatch would not have allowed the NHBC to respond before completion. The potentially relevant question was whether reasonable solicitors should have telephoned the NHBC to confirm that the offer was valid and that the builder remained entitled to communicate it.
3. The court considered that the documentation was not esoteric. If its effect depended on continuing membership, a reasonable reader might understand that from the documentation, applying the objective approach referred to in Investors' Compensation Scheme Ltd v West Bromwich B.S. [1998] 1 WLR 896. If the offer was unconditional, the need for a telephone check would require separate consideration. The issue was not finally resolved.
4. Disposition. Further proceedings were adjourned and delivery of judgment was stayed. The parties were directed to take serious steps towards ADR, including inviting the NHBC to participate. If ADR failed, the appeal could be restored for judgment and further submissions.

• Court of Appeal (Civil Division): proceedings on the appeal were adjourned and judgment stayed pending an ADR scheme.
• Aberystwyth County Court: HHJ Moseley QC declared that the defendant solicitors were not in breach of duty. The appeal arose from that order.