Generally, an attorney is not liable to third parties for negligence in the performance of his or her professional duties. However, this rule is not all encompassing. Over the past few decades, the concept of privity – a defining characteristic of the attorney-client relationship – has been slowly eroded by courts around the country. Accordingly, it has become difficult for attorneys to know who their clients are and to whom they owe a duty of care.
There has recently been an uptick in negligent supervision claims against law firms. Perhaps surprisingly, these claims arise from the firms' alleged failures to supervise their partners rather than their associates or non-legal staff. This begs the question: do partners have a duty to supervise their fellow partners?
The Supreme Court recently had to decide whether an architect who provided a valuation of a property to a homeowner for mortgage purposes was to be held liable for misrepresentations in the valuation to a third party who bought the property two years later.
It is common for solicitors to be appointed by a will to act as an executor and trustee and to be retained to act as a solicitor on the estate. If there is a claim as to administration of the estate, liability may be affected by the capacity in which the solicitor was acting. This issue was recently examined by the New Zealand Court of Appeal.
A solicitor's duty of undivided loyalty to a client can be compromised if the solicitor acts for another party in a conflict of interest situation. The difficulties for a solicitor in obtaining informed consent and avoiding negligence in these circumstances were considered in the recent judgment of Tuiara v Frost & Sutcliffe.
In the recent case of Pangani Properties Ltd v Owens Transport Ltd the judge held that a claim in negligence against a solicitor who had failed to include a clause for fair wear and tear in a lease contract was time-barred. The court found that the loss was not contingent on a future event and that the cause of action accrued when the contract was signed, thus beginning the limitation period.
A new bill establishing far-reaching tort reforms has introduced a new standard of care for professionals, under which a professional will not be held liable if he or she acted in a manner that was "widely accepted" by peer professional opinion at the time. The bill also adopts proportionate liability, which will have favourable consequences for professionals.
In response to problems in the insurance industry, the federal government has set up an inquiry into far-reaching tort reforms. The first stage of the review examines limitation periods, the standard for medical negligence and the scope of the physician's duty to inform patients.