Do your terms of business defend or condemn your business?
30 October 2020
None of us should forget that if a Will fails, either because what was intended by the testator wasn’t executed or the validity is challenged, then the legal costs of each claim are likely to be over £10k for a rectification, plus any ‘sweeteners’ for the disappointed beneficiary.
If a claim progresses to a probate action, then the legal costs will usually be at least £50k, plus potentially compensation up to the value of the whole estate.
Obviously your professional indemnity insurance should cover this, but then the issue is how much does it cost (if you can find someone willing to insure you) when it comes to policy renewal time?
So, how do your terms of business help protect you and your business?
Well, very simply, they should clearly state the service that you are providing and, if that’s what the client has chosen to pay for, you are largely covered; the issue being, you need to deliver it.
For example, if your terms of business (or timescale agreed separately) is 20 days post completed instruction to deliver a drafted Will to the client, then you should not be liable if they unexpectedly die within that time period. However, you are leaving yourself exposed if you do not deliver to that timescale and haven’t agreed a revised one with the client in advance.
Vagueness on timescales won’t solve the problem, as things then come down to judgement and what constitutes a ‘reasonable period of time’ based on the client’s circumstances and, if you have ever looked into these things, none of the case law really provides any definitive guidance on what this is.
But what about those providers who only offer a limited remote (on-line / paper form) or drafting only service and often don’t necessarily ever talk to the client or check whether the Will has been signed and witnessed correctly, if at all?
With many now charging around £100 or more for a basic single Will, which isn’t that cheap, can they really use their terms of business to effectively say “we aren’t liable for anything” – be it identity fraud, mental capacity, coercion and whether the documents produced are fully executed or actually suitable for the client’s need?
From a legal perspective, irrespective of whether of the client ever reads them or not, the answer is actually “yes”.
At the end of the day, we can contract with clients on any basis we wish and clients can choose to appoint us to provide as limited or comprehensive a service as they desire.
Indeed the very nature of a remote service, which the client has chosen, obviously means there can’t be the high level of communication required to provide an individual with tailored advice, let alone ascertain whether they are actually the testator, compos mentis or subject to some form of undue influence. Equally, a free or low-cost Will indicates the client has low expectations on the extent of the service they are receiving.
Though there is another factor, which is how your services are promoted and any claims made about them. For example, remote providers often make statements like the Wills are “provided” or “checked” by a “solicitor” or “expert” to effectively “make sure everything is in order” (not necessarily making it clear whether that means technically correct as a document or suitable for your needs).
The reality is that, as a matter of law, if you are not overtly misrepresenting things, then carefully chosen vague words don’t necessarily impose some form of legal duty against them, so long as your terms of business have made the limitation of your service and liability clear.
However, you still need to be careful, as just because you have a position that is ‘defendable’, does not necessarily mean that you can guarantee every claim can be ‘defended’, now or in the future.
If you are making statements about your service that could be deemed misleading and / or charging what could be viewed as full-service prices, then it is possible that a claim could be made that your terms of business were unfair, based on Section 62 of the Consumer Rights Act 2015. However, it must be stressed that legally this is unchartered waters, both in terms of whether the fairness of a contractual term can be challenged by the testator, let alone a disappointed beneficiary.
Equally, there is an argument that if there is a mismatch between how you describe your service and what’s in your terms of business, then it is questionable as to whether you are complying with Trading Standards regulation. But, whilst I know of companies who have had a visit from this authority, it appears that this is largely untested too.
However, if you are a regulated entity or individual, and there is a disparity between how you present your services and what is buried in your terms of business, then there is clear question as to whether you are complying with your regulatory duties.
So, in conclusion, make sure your terms of business and the service you provide, promote and actually deliver are all aligned.
However, like me, you might see an irony in all this, in that the more you provide a fully advised and comprehensive service to the client, the more risk and liability you are actually taking on.
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