Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION [2012] CSOH 197
A302/11	OPINION OF LORD BOYD OF DUNCANSBY in the cause PETER GEORGE WYATT and MARGARET CAMPBELL WYATT Pursuers; against ANNA CRATE and JACQUELINE MURRAY Defenders: ________________

Pursuers: Bowen QC; Harper Macleod LLP

Defender: Barne; Balfour & Manson LLP

24 December 2012

[1] This action arises out of the purchase by the pursuers, Peter George Wyatt and Margaret Campbell Wyatt of a house at Ivybank, 6 Meadowfoot Road, West Kilbride, Ayrshire. In March 2007 they instructed the solicitors firm of Wm Crate & Co (the solicitors) to act for them in the purchase of the property. An offer was submitted to the seller's agents JAS Campbell & Co on 6 March 2007. The offer was accepted subject to qualifications contained in their letter dated 23 March 2007. These qualifications were accepted by the solicitors by letter to JAS Campbell & Co dated 17 April 2007 thus concluding the bargain. The pursuers aver that the qualifications were accepted by the solicitors without them being informed of the terms of the letter of 23 March and without their instructions. Had they known of the terms of the letter of 23 March they would not have agreed to the conclusion of the bargain. The pursuers aver that this was a breach of duty by the solicitors and that they acted without the authority of the pursuers. They claim damages in consequence of their breach of duty.

[2] William Crate, described as the sole partner (sic) in the now dissolved firm of Wm Crate & Co, died on 29 April 2007. The defenders in this action are the executors nominate of the late William Crate.

[3] This action came before me on the procedure roll in respect of the parties' preliminary pleas. For the reasons outlined below I have decided to sustain the defenders' first and second pleas-in-law and dismiss the action.

[4] The relevant averments for the pursuers are these. In condescendence 2, after narrating the exchange of letters between the respective firms of solicitors (being the offer and qualified acceptance for the purchase of the property) the pursuers aver that:

"On 12 April 2007 Liz Campbell, the Firm's legal executive, telephoned the first pursuer, informed him of a gas and electricity safety inspection and replacement of slates at the rear of the property and then ask him if he wished to conclude the bargain. The first pursuer asked her to be more specific and she advised him that 'the whole situation was in good order'. Acting on that advice and without having been informed of Messrs JAS Campbell & Co's letter of 23 March 2007 the first pursuer confirmed that the bargain should be concluded. Without notifying the pursuers of the letter of 23 March 2007 and without taking their instructions in this regard the Firm by letter of 17 April accepted all the qualifications contained in the qualified acceptance of 23 March 2007 and held the bargain concluded."

In condescendence 3 the relevant averments are:

"It was an implied term of the contract that, in providing conveyancing legal services, the Firm would use the knowledge, skill and care of a reasonably competent firm of solicitors providing conveyancing legal services. In the exercise of such knowledge, skill and care it was the Firm's duty to inform the pursuers of the letter of 23 March 2007 sent by Messrs JAS Campbell & Co and to take their instructions in relation thereto. It was their duty not to accept all the qualifications contained in the qualified acceptance of 23 March 2007 and to hold the bargain as concluded without the pursuers' express instructions to do so. No reasonably competent firm of solicitors exercising such knowledge, skill and care would have acted as the Firm did. The Firm's acts and omissions amounted to a breach of the implied term. Had the pursuers known of the terms of the letter of 23 March 2007 they would not have agreed to the conclusion of the bargain. That breach caused the pursuers to sustain loss and damage. But for the Firm's breach of contract the pursuer would not have sustained loss and damage."

In condescendence 4:

"As a result of the Firm's breach of contract the pursuers have suffered loss and damage. Had the pursuers been made aware of the letter of 23 March 2007 they would not have agreed to the conclusion of the bargain on 12 April 2007. The pursuers were deprived of the opportunity of withdrawing from the bargain. They have incurred expenses in relation to the Property which they would not otherwise have incurred and which are not expenses which they would otherwise have incurred in the purchase of an alternative property. A schedule of those expenses and supporting invoices is produced and referred to for its terms which are incorporated herein for the sake of brevity. The total sum of said losses is £38,747.27. This is the sum sued for."

The schedule of expenditure for works carried out on 6 Meadowfoot Road, West Kilbride is as follows:

"Total of Expenditure for Works carried Out on

6 Meadowfoot Road, West Kilbride

KA23 9BX

Ground Works £5528.32

Roofing £8361.50

Plumbing £ 970.02

Carpentry £7443.75

Painting £2640.00

Plastering £ 610.00

Goods to revamp Kitchen £ 891.58

Roughcasting £ 800.00

Industrial Vac (clear out the loft) £ 52.88

Chimney Sweep £ 60.00

Paint £ 259.00

Architects £ 94.00

Electrical £4270.78

Metal Gates and Wooden Fencing £1715.00

Security System Check £ 45.00

Sundry Expenses £3782.44

Wood Treatment in Loft £ 968.00

Insulation in Loft £ 255.00

Total £38,747.27"

In answer to a call for the defenders to identify which deleted condition is relevant to which head of loss it is explained and averred that the pursuers' claim is based on the loss of opportunity to withdraw from the bargain.

[5] The defenders' averments so far as material are to be found in answer 3 as follows:

"Further explained and averred that the Reporter to the Law Society's Complaints Committee concluded that it would have been good practice to discuss amendments to the missives with the pursuers and that a failure to do so amounted to an inadequate professional service by the Firm. The Reporter did not uphold two other complaints. Subsequently the Law Society's Client Relations Committee upheld all three complaints of inadequate professional service. The Client Relations Committee also directed the Firm to reduce its fees to nil and to pay compensation of £600. Further explained and averred that, according to the Client Relations Committee, the Firm did not have authority to conclude missives on behalf of the pursuers. On that basis the pursuers were not bound to purchase the property. The pursuers ratified the contract by instructing Ms Templeton to settle the transaction when they were under no legal obligation to do so."

Parties' submissions
[6] The parties' submissions focused on two issues: the quantification of damages and the averments of both parties on agency. I deal first with quantification of damages as that was the order that submissions were presented to me.

Submissions for the defenders re damages

[7] For the defenders Mr Barne's core proposition was that the normal rule that applied to damages for breach of duty of care in such a situation was diminution in the value of the property. This was not a hard and fast rule where other measures were appropriate but in this case there was no reason to depart from that rule. Conversely there was no basis in law for the approach currently sought by the pursuers. He pointed out that the averments do not say what the approach would have been had the pursuers been informed of the qualifications in the letter of 23 March. All that was said was that the bargain would not have been concluded. It was said in the pleadings that the pursuers had lost the opportunity of withdrawing but as at 12 April 2007 when the first pursuer had the conversation with Ms Campbell they did have the opportunity of withdrawing. What the pursuers were in fact saying was that they would not have proceeded on the terms contained in the qualified acceptance dated 23 March 2007. So he concluded that this was not a loss of chance case.

[8] Mr Barne maintained that the pursuers' pleadings in article 3 of condescendence were so lacking in specification as to fall into irrelevancy. He referred to the schedule of expenditure and pointed out that there was no attempt to tie these claims to any of the conditions in the missives deleted as a result of accepting the qualifications in the letter of 23 March. There was no link between these claims and any negligence on the part of the solicitors.

[9] Mr Barne suggested that the proper approach to damages was to assess the difference in value between the property without any defect and the property with the defect which had been acquired by the pursuers. This was a proper approach in cases of surveyors' negligence and should also be followed in this case. He submitted that on the pursuer's averments what they had as a result of the acceptance of the qualifications was a contract with a bundle of rights which was not as valuable to them as they might have been. He referred to Watts v Morrow [1991] 1 WLR 1421 in which the Court of Appeal in England confirmed that the proper measure of damages in such a case is the difference between the value of the property as it was represented to be and the value in its true condition. There is Mr Barne submitted no basis for recovering the cost of repairs even if the cost of these significantly exceed the difference in values. In this case the pursuer paid £160,000 for the property. If one took off from that sum the amount contained in the schedule of expenditure the pursuers were effectively going to receive a property worth £160,000 for little over £120,000.

[10] Mr Barne submitted that in a no transaction case in the absence of a fully identified situation the court tries to identify the real loss. That is done usually at the outset when the alleged breach of duty took place. That is the measure of the loss. The cost of repairs may, he concluded, be a useful crosscheck but that was all. He suggested that a comparison might be made with warranty cases and referred to Banque Brusells Lambert SA v Eaglestar Insurance Company Limited [1977] AC 191 and in particular to the speech of Lord Hoffmann at page 211. There was a distinction to be drawn between the measure of damages for breach of a duty to take care and the measure of damages for breach of a warranty. The approach taken by the pursuers was effectively the same as a breach of warranty. The defenders were being asked for a whole lot of items that did not flow from any breach of a duty of care.

[11] In Scotland Mr Barne submitted it had been suggested that there was no general rule that the measure of damages for breach of a duty of care in such cases was the diminution in value of the property. Jackson and Powell Professional Liability 11287. This statement is based on Haberstitch v McCormick and Nicholson 1975 SC 1 Emslie LP at p 9. Nevertheless he submitted that there was a presumption or at least a starting point that the measure of damages should be based on the diminution in value. He referred to Ford v White & Co [1964] 1 WLR 895. He also referred to the judgment of Bedlam LJ in Wapshott v Davis Donovan & Co [1996] PNLR 361 CA at pp 372-373. There his Lordship had cited with approval the judgment of Bingham LJ, as he then was, in County Personnel Employment Agency v Alan Pulver & Co (a firm) [1987] 1 WLR 916 at 925. In that case his Lordship noted that on the authorities the diminution in value rule appears to be almost always followed where the property is acquired following negligent advice by surveyors. That however did not mean an inevitable approach at least in claims against solicitors and should not be mechanistically applied in circumstances where it might appear inappropriate.

[12] Mr Barne also referred me to a case from the High Court of Eire, Kellerher v O'Connor [2010] PNLR 3 in which Clarke J analysed the damages which might flow from breach of duty in solicitors conveyancing cases. He held that there were three types of transactions - ones which might be categorized as no transaction, others where the transaction had been completed and ones where one could not say what the plaintiffs might have done had they been properly advised. These were intermediate cases in which damages would fall between a no transaction and a completed transaction case.

[13] Finally on this chapter of his submissions Mr Barne referred me to Stanley K Oats v Anthony Pitman & Co (a firm) [1998] PNLR 683.

[14] In conclusion Mr Barne submitted that there did not appear to be a huge difference between the English approach on quantification of damages and the approach in Haberstitch but the English authorities might start from a firmer basis of diminution in value than the Scottish authorities.

[15] Mr Barne further submitted that in the determination of the level of damages it was necessary to identify the scope of the duty which had been breached since this would define the scope of the remedy. In Banque Brusells Lambert SA v Eaglestar Insurance Company Limited the House of Lords drew a distinction between breach of a duty to provide information and breach of a duty to advise someone as to what course of action he should take. If the duty is to advise whether or not a course of action should be taken, the advisor must take reasonable care to consider all the potential consequences of that course of action. If he is negligent, he will therefore be responsible for all the foreseeable loss which is a consequence of that course of action having been taken. If his duty is only to take reasonable care to supply information upon which someone else will decide a course of action, he is, if negligent, responsible not for all the consequences of the course of action decided on but only for the foreseeable consequences of the information being wrong. In other words the measures of damages is a loss attributable to the inaccuracy of the information. The difference between the courts approach to valuers and solicitors flows from the scope of the advice that each professional may give. Valuers may simply advise on value. Solicitors on the other hand provide more general advice, although the advice they give may go to value. The logically prior question to identifying the measure of loss is deciding for what kind of loss is a pursuer or claimant entitled to in compensation Banque Brusells Lambert SA v Eaglestar Insurance per Lord Hoffmann at p 211.

[16] In the present case the defenders did not warrant to provide the pursuers with a completed transaction that produced a house matching their entire needs. The duty was to exercise reasonable care. The scope of the defenders duties cannot be taken to extend to covering all expenditure incurred by the pursuers in putting the property into the condition they wanted it. On the pursuers approach there is no link between the solicitor's duty, the deletion of the clauses, and the damages now claimed.

Defenders' submissions re agency

[17] Mr Barne presented a further argument on agency. He submitted that a solicitor's authority in conveyancing matters does not extend to concluding contracts. The agent must have a special authority to do so. Whether a principal is bound depends on the extent of the authority granted. Referring to article 2 of condescendence he pointed out that on the pursuers' averments the pursuers had no knowledge of the terms of the qualified acceptance of 23 March. If that was correct then they were never bound by the missives which had been purportedly entered into on their behalf. The loss complained off was a loss of opportunity to withdraw. He maintained that if an agent had no authority to conclude missives then the loss arose when the principal ratified the contract. Up until that time they could have withdrawn. He referred to the Stair Encyclopaedia on agency and mandate at paragraph 53 where it said: "There is no presumption that entering a contract on behalf of a client is within the solicitor's implied authority." The same rule applied in England. It was clear from article 3 of condescendence that prior to the payment of the purchase price the pursuers had obtained advice about continuing with the purchase but were advised that they were "too far down the line to withdraw" and that to do so would be a breach of contract. This advice Mr Barne maintained was questionable in the light of the pursuers other averments.

Pursuers' submissions on damages

[18] For the pursuers Mr Bowen QC submitted that so far as damages were concerned there was no general principle in Scots law that damages and solicitors' negligence cases should be computed by reference to diminution in value. Each case must be considered on its own facts and circumstances upon the proper application of the well-known general principles. Haberstitch v McCormick and Nicholson per Emslie LP pp 9 and 10. That principle had been followed by Lord Woolman in Brian Dickson and Evelyn Dickson v A & WM Urquhart [2009] CSOH 38. Accordingly the measure of the pursuers' loss were those specified in the schedule of expenditure being expenses which he said arose directly from the solicitor's breach of duty.

[19] He submitted that the basis of the action was a failure to advise the pursuers of the terms of the qualified acceptance of 23 March. Accordingly it was a case where the solicitors had acted without authority. He moved an amendment at the Bar to make it clear that the action was based on breach of authority or agency and not on negligence. He submitted that given that this was a breach of authority case there was in fact little in the way of case law as to what the measure of damages might be. Accordingly it would be appropriate to hear a proof before answer.

Pursuers' submissions on agency

[20] Mr Bowen QC attacked the defenders' averments in answer 3 as irrelevant. He submitted that of course a principal may ratify the acts of an agent done without his authority Bowsted and Reynolds on Agency (18^th Ed.) paragraphs 2-047 and 2-048. However he submitted the issue was what was the effect of ratification. He referred to the American restatements on the law of agency contained in the 19^th edition of Bowsted and Reynolds and specifically to paragraphs 2-093 and 2-094. In the comment to rule (1) at paragraph iii (in 2-094) the general rule is said to be that the agent is not liable to the principal for exceeding his authority as the doctrine of ratification normally contemplates a principal who is glad to waive the technical irregularity and adopt the transaction. However a principal may ratify a transaction for convenience or to preserve his commercial reputation or even from commercial necessity. It is therefore necessary to consider the matter in two stages. First whether there was ratification of the contract and secondly whether the principal had waived the breach of duty vis a vis the agent Suncorp Insurance and Finance v Milano Assicuraziomi SPA [1993] 2 Lloyds Reports 225 at 234 to 235 per Waller J.

[21] Accordingly he submitted that the defenders must state on record whether or not the pursuers have been exonerated from any breach of contract. In the absence of such averment by the defenders that the pursuers have exonerated the solicitors for liability for breach of duty then the fifth plea-in-law for the defenders and supporting averments that ratification on its own is sufficient for absolvitor are, Mr Bowen submitted, irrelevant.

Defenders' reply on agency

[22] Since some of this argument had come as a surprise to the defenders and was associated with the amendment moved at the bar I allowed Mr Barne a right of reply. In so doing Mr Barne clarified his position. It was not his primary case that the solicitors had acted without authority. However if they had then the pursuers had the opportunity to withdraw. He submitted that a liberal interpretation should be given to the construction of authority of an agent where that authority is given orally. American restatements on the law of agency, article 25 in Bowsted and Reynolds at paragraphs 3-013 and 3-014. There was also he said a distinction where a lawyer is acting. Mr Barne took me to the first restatement on the law of agency as adopted and promulgated by the American Law Institute in 1933 at paragraph 416. He also referred me to The Unauthorised Agent: Perspectives from European and Comparative Law, Busch and MacGregor pp236 and 325. He submitted that the agent is not acting as an underwriter of the contract and that rights against an agent for acting in breach of duty are collateral issues. He submitted that the pursuers in this case were not obliged to ratify the contract for commercial readings. On the pleadings there was no exoneration. The issue he said came back to what is the scope of the duty? What did that breach of duty entail? Following ratification of the contract what is it in the contract that flows into the damages sought? He submitted that the pursuers required to state what was the causal link between the alleged breach of duty and loss.

Discussion

[23] It is convenient to start with the question of whether or not there has been a breach of agency or authority and if there has been whether or not the solicitors were exonerated by the pursuers' ratification.

Agency

[24] I was somewhat surprised when senior counsel for the pursuers informed me that this was a case based on breach of agency and not on solicitor's negligence. Mr Bowen sought to reinforce that case by moving an amendment at the bar which I allowed. However with all due respect to Mr Bowen it seems to me that the averments of fault in article 3 remain and if this was truly a breach of agency I would have expected to see a more focused plea in law directed to that point. Moreover I am not clear that the factual basis pled by the pursuers necessarily supports this case. Wm Crate & Co were instructed to make an offer for the property and did so as the pursuers' agents. They then received a qualified acceptance from the sellers' solicitors JAS Campbell & Co dated 23 March 2007. On 12 April Liz Campbell, the firm's legal executive, had the conversation with the first pursuer in which she asked if he wished to conclude the bargain. On the pursuers' pleadings neither of the pursuers had seen the letter of 23 March 2007. Nevertheless there was a clear instruction to conclude the bargain. It would I think be a matter of proof as to whether or not these actings amounted to a breach of agency. It may be said that the agents had been given general authority to act for them in the purchase of that property and acting within that agency they had submitted an offer to purchase. Although the pursuers had not seen the qualified acceptance they had nevertheless given the solicitors authority to conclude the bargain.

[25] Indeed it seems to me that pleading this as a breach of agency gives rise to a number of potential problems. In the first place one has to examine the extent to which a solicitor in a conveyancing transaction acting as an agent for a purchaser is obliged by virtue of the agency to inform the purchaser of every term of the proposed contract. In modern conveyancing practice offers for domestic property are submitted with pro forma schedules of conditions often extending to many pages. Many will be technical and many will be included in the sure knowledge and expectation that they will be deleted in any acceptance following on from the offer.

[26] There are of course two different but inter-related relationships. The first is that of the solicitor acting as an agent for his client in submitting an offer and concluding a bargain to purchase a property. The second is the contractual relationship in which, amongst other things the solicitor is bound to exercise the knowledge, skill and care of a reasonably competent firm of solicitors providing conveyancing legal services. There is no doubt that in the exercise of the knowledge, skill and care of a competent solicitor he must advise his client of the terms of conditions which it is proposed should be incorporated into the contract and the consequences if such conditions were to be incorporated into the contract. He may advise his client not to accept proposed deletions to the conditions, or to propose new ones in their place, or not to proceed at all with the transaction. Where the solicitor fails to draw relevant matters to the attention of his client and to give advice thereon then he will be in breach of his duty under the contract and liable in damages for any loss sustained.

[27] The question of the scope of the mandate of the solicitor acting as an agent for his client as principal seems to me to be a different question. It does not necessarily follow that a solicitor concluding a bargain where he has omitted to advise his client that a particular condition contained in the schedule of conditions had been proposed to be deleted by the seller as the sellers' agents would be acting outwith the scope of his mandate in so doing.

[28] If matters had rested at this point I would have allowed the pursuers a proof before answer. However there is a more fundamental problem for the pursuers. It is that the contract was ratified with the payment of the price and the taking of the title for the property. The pursuers claim that it is for the defenders to show that in ratifying the contract the pursuers did not exonerate the agent. I do not accept that. It is of course true that there two contracts involved. The first is the one which the agent is purported to have entered into on the principal's behalf with a third party. The second is between the agent and the principal. The general rule is that the agent is not liable to the principal for exceeding his authority as the doctrine of ratification normally contemplates a principal who is glad to waive the technical irregularity and adopt the transaction. It is also clear that there may be situations where the principal may ratify the contract but not exonerate the agent for his breach of agency Bowsted and Reynolds on Agency 19^th Ed. 2-095 and iii. The passage in Bowsted and Reynolds is based on Suncorp Insurance and Finance v Milano Assicuraziomi SPA (supra) accordingly it is necessary to look at what Waller J at page 235 said in that case:

"A principal may wish to ratify a transaction for commercial reasons so as to preserve a commercial reputation. It is in such circumstances that it seems to me that it should be possible for the principal to ratify as against the third party but not waive any breach of duty as against the agent. There seems no reason to me why the principal should not be able to make his position clear in this regard in that there are two distinct but connected contractual relations. There is the contract which the agent has purported to make for the principal and the contract between the agent and the principal. Bowsted at page 82 would support that view. However it is right to recognise that ratification is normally presumed to include relieving the agent from personal liability to his principal (para 84 of Halsbury's Laws, Volume 1(2) (supra)) and in the only case where the question was discussed as Bowsted puts it 'inconclusively' there cannot certainly be said to be any support for the view."

[29] On this point Waller J concludes:

"I believe that the correct approach is to consider the matter in two stages. First is there a ratification of the contract which the agent has purported to make. Second has the principal waived the breach of duty if any vis a vis the agent. Often the facts will lead to both ratification and exoneration, but not always".

I can accept the reasons that a principal may wish to ratify a contract in the face of a breach of agency may not be confined to commercial reasons or reputation. This may be particularly so where an individual is purchasing a dwellinghouse where a decision not to ratify a contract would have potentially very significant consequences.

[30] However, it seems to me to be clear, if not self-evident, that where a principal decides to ratify a contract made without his authority but wishes to maintain his rights against the agent he must make his position clear at the time of ratification. If he does not then the presumption must be that he has exonerated the agent.

[31] Mr Bowen submits that it is for the defenders to state on record whether or not the pursuers have exonerated the agent from the breach of duty. I reject that submission. In the first place it is the pursuers who are maintaining that they did not exonerate the solicitor. The facts are within their knowledge and not those of the defenders. The pursuers will know what steps they took to preserve their rights against the solicitor. To suggest that it is for the defenders to plead that there has been no exoneration seems to me to invert the burden of proof, especially when ratification is normally presumed to relieve the agent from personal liability to the principal.

[32] Without an averment that in ratifying the contract the pursuers had preserved their rights against the solicitors the action based on the breach of agency is irrelevant.

[33] I have not dealt with the pursuers' submissions anent the defenders' averments on breach of agency. Given the view I have taken of the pursuers' pleadings that is unnecessary. However had I allowed a proof before answer I would have done so on all the averments.

Damages

[34] If, as Mr Bowen maintained, this was a case based purely on breach of agency the decision I have reached on this point would be sufficient to dispose of the case. However as I read the pleadings there is still on record a case based on the solicitor's breach of duty as conveyancing solicitors. Accordingly it is necessary to deal with the quantification of damages.
[35] I was referred to an impressive array of English authorities for the proposition that the measure of damages in a case such as this should be computed by reference to the loss of value to the property. However it seems to me that the principles in Scots Law at least are clear. They stem from the well-known dicta in Hadley v Baxendale (1854) 9 Ex 341 at 354:

"Where two parties have made a contract which one of them has broken, the damages which the other party ought to receive in respect of such breach of contract should be either such as may fairly and reasonably be considered arising naturally, ie according to the usual course of things, from such breach of contract itself, or such as may reasonably be supposed to have been in the contemplation of both parties, at the time they made the contract, as the probably result of the breach of it".

This and the line of authorities steming from that case were examined by the First Division of the Court of Session in Haberstitch v McCormack & Nicholson which rejected the proposition that the measure of loss was the difference between the price paid and the market value of the subjects as affected by the solicitors breach of contract. The court held that:

"Each case must be considered on its own facts and circumstances, and in each the question of damages which remains a question of fact, must be resolved upon the proper application of the well-known general principles which both parties does not feel accepted as a starting point of a separate argument". Per Emslie LP page 10.

[36] This approach was followed by Lord Woolman in Dixon. His comments are obiter since on the facts His Lordship granted decree of absolvitor. Nevertheless I agree with his analysis. The issue in Dixon was whether, in the purchase of a building referred to as a "warehouse" the pursuers were informed of a restrictive title condition. The condition was eventually discharged following an application to the Lands Tribunal. His Lordship rejected the suggestion that the appropriate measure of loss was the diminution in value. He held that the pursuers would have been entitled to the cost of having the title defect remedied by subsequent solicitors:

"In my view if the defenders had been negligent then the direct and plain consequence was that the pursuers has to incur the cost of restoring the title to its proper position". Para 38.

There may well be cases in which the proper measures of loss for a solicitor's negligence in a conveyancing transaction is indeed the diminution of value of the property. However it cannot be said, on the Scottish authorities that there is a presumption that this will be so, or even that it is a starting point. It will depend on the facts and circumstances of the case.

[37] So what is the correct measure of damages in this case? As Clarke J observed in Kelleher v O'Connor it is necessary to analyse the contractual obligations which have been breached.

"A solicitor does not contract with her client that she will not procure for that client a successful conclusion of a conveyancing contract. Rather the solicitor contracts with her client that she will carry out a proper professional job on the conveyancing transaction. Depending on the circumstances that may lead to the solicitor advising the relevant client not to proceed at all are only to proceed provided certain assurances or terms can be imposed or the like". (p.39 paragraph 9).

[38] There is no doubt that the solicitors were under a duty to inform the pursuers of the qualification contained in the letter of 23 March 2007. In not doing so they were in breach of the term of the contract that the solicitor would use the knowledge, skill and care of a reasonably competent firm of solicitors providing conveyancing legal services. The issue is what that duty entails. It is not merely advising the pursuers of the terms of the qualifications in the letter. Depending on what these qualifications are they must then go on and offer advice to the clients, in this the pursuers, as to the implication of the qualifications, and take their instructions. In some cases the advice may be that the qualifications are acceptable. In other cases it may be that the solicitors should advise that they revert to the seller's solicitors and attempt to have the particular qualification amended or removed. In other cases the advice will be not to continue with the purchase.

[39] So far as the client is concerned he or she may take the advice, or reject it. The client may say to a solicitor who advises that a modification to a condition may be accepted that he or she does not accept it and instruct the solicitor not to conclude missives. On the other hand the client may instruct a solicitor to conclude a bargain in the face of advice not to do so. That is the client's prerogative. So long as the client is properly advised the solicitors have fulfilled the terms of the contract to the client.

[40] Where solicitors are in breach of an implied term to use the knowledge, skill and care of a reasonably competent firm of solicitors providing conveyancing legal services, it is necessary to see what the consequences are for the client. That will depend on the extent and scope of the breach.

[41] Where, as here, it is a failure to advice on modifications to conditions in an offer to purchase it is necessary to identify these modifications, narrate the advice that might reasonably be expected from a reasonably competent firm of solicitors providing legal services and the action that might have been taken in respect of such advice. Then the court will be able to approach the issue of damages which flows from the breach.

[42] In this case no attempt is made to identify the modification or modifications which caused a problem to the pursuers, the advice that might have been expected to have been given, the pursuers' attitude to such advice or the loss that they incurred as a result.

[43] Instead all that the pursuers have provided is a schedule of expenditure with no attempt to relate these to any of the conditions or modifications thereto in the missives. The pursuers do not offer to prove that any of the items of expenditure in the schedule arose as a result of the deletion of a condition of the offer contained in the qualified acceptance of 23 March. In the absence of such averments there is nothing to demonstrate how any of these items of expenditure flow from the firm's alleged breach of duty. Accordingly I will sustain the first and second pleas in law for the defenders and dismiss the action.