The Importance of Having Authority to Instruct

Solicitors are required to ensure that the person instructing them to carry out work for their client’s business has proper authority to instruct, but what happens if that person then fails to take heed of the solicitor’s advice?  In the recent case of Newcastle International Airport v Eversheds, the solicitors were found not to be negligent and this serves as an important lesson for businesses taking professional advice.

Background

The defendant solicitors, Eversheds, were accused by their former client, Newcastle International Airport, of drafting employment contracts for two of the airport’s directors but then negligently failing to advise on the implications of a number of key clauses.  The chair of the airport’s remuneration committee, who went on to sign the contracts without reading them, claimed that she was not specifically made aware of the remuneration clauses which resulted in the directors being entitled to bumper bonuses.

Outcome

The solicitors successfully argued that the instructing chairwoman, acting as the airport’s representative, had held out that she had proper authority to instruct the solicitors and that once this had been established the solicitors were not under an on going and onerous duty to keep checking that she continued to have the necessary authority.

When they sent the finished agreements to the chair she had clearly failed to read or comprehend the effect of the bonus clauses and signed them without sending them to other members of the remuneration committee for a second opinion.

The solicitors also established that even if they had provided specific advice on the bonus clauses, the chair would have most likely ignored the advice anyway.

Learning points

The lesson to take away from this is that when instructing solicitors and other professionals to carry out work for your business you need to have confidence in the employee giving those instructions.  As a safeguard, even directors and senior employees should be required to seek a second opinion from other people within the business before acting on it.

However, there are circumstances where the solicitor could be considered to have acted negligently if they have failed to check the authority of the person instructing them or give advice on an important issue.  If you are concerned about the advice you have received from a solicitor or another professional you should contact a member of our Professional Negligence Team on 0800 051 8057 about whether you have a claim.