Bermuda: Sailing Too Close To The Wind: An Update On Offshore Lawyers' Liability

Last Updated: 1 September 2016
Article by Sedgwick Chudleigh
Most Popular Article in Bermuda, September 2016


In our Offshore Lawyers' Liability article in April 2014, we noted the growth of professional liability claims and allegations of professional misconduct against lawyers and law firms in offshore jurisdictions.   
The past 18 months have seen an increasing number of judgments considering allegations of incompetent or inappropriate behavior on the part of counsel, particularly involving small local law firms or sole practitioners, in the context of conveyancing transactions, fee disputes, divorce litigation, civil litigation and criminal litigation. Some examples of such judgments are summarized below.

Conveyancing transactions

In A Barrister v The Bermuda Bar Council [2015] CA (Bda) 16 Civ, the Bermuda Court of Appeal dismissed an appeal by a Bermuda conveyancing attorney against various disciplinary findings by the Bermuda Bar Association's Disciplinary Tribunal, including a failure 'to appreciate adequately or at all the basic duties of a conveyancing attorney'. The tribunal's decision to suspend the attorney from conveyancing work for two years, and to pay $10,000 in compensation, and $2,500 in costs, was upheld by the Court of Appeal, which described the grounds of appeal as 'incomprehensible' and 'misconceived'.
In Matthews v Trott et al [2015] SC (Bda) 25 Civ, the defendant lawyer (a sole practitioner whose law firm had already been struck off the Register of Companies) was found liable for the sum of $222,500 in damages, after the judge found that she had acted in breach of her fiduciary duties and her duties of reasonable skill and care in a conveyancing transaction. 

Overcharging clients

In Swan v Phoenix Law Chambers [2015] SC (Bda) 8 Civ, the defendant lawyer made allegations of perjury against a former client, in whose favour the court had previously ruled on a fee dispute. The court rejected the lawyer's allegations of perjury, and ordered the lawyer to pay his former client's costs of the proceedings on the indemnity basis. Chief Justice Kawaley noted that 'the ability of [the lawyer] to analyse the merits of this application was impaired by the fact that he was acting in person rather than as counsel for an independent client.'

Conflicts of interest and confidentiality: divorce litigation

In Re a firm of Barristers and Attorneys [2014] SC (Bda) 38 Civ, the court granted an injunction restraining a Bermuda law firm from acting against a former client in divorce proceedings, in breach of bar conflicts rules and duties of confidentiality. The court concluded that the costs thrown away should be paid by the former client in any event, as a result of delay on his part.
In Marshall et al v A [2015] CA (Bda) 35 Civ, the court upheld an injunction restraining two Bermuda lawyers from acting against the second husband of a former client in divorce proceedings, in breach of duties of confidentiality. The court rejected an argument that the small pool of divorce lawyers in Bermuda justified any relaxation of the ordinary duties of confidentiality under English and Bermuda law. 

Conduct of civil litigation

In Corporation of Hamilton v Minister of Home Affairs [2015] SC (Bda) 22 Civ, the defendants challenged the authority of the plaintiff's officers and the plaintiff's law firm to commence and continue legal proceedings against the government on the plaintiff's behalf. The plaintiff was a public local authority whose elected officials were apparently deadlocked in their decision making process. Chief Justice Kawaley stayed the proceedings, pending the outcome of local government elections, and concluded that while the law firm might, on balance, have had authority to commence the proceedings, it did not have authority to continue with them, and had been 'sailing very close to the wind by taking instructions from one faction of the clearly divided administration in circumstances where the true legal position was that, in terms of the ability to actually authorise the specific filing which was made, the deadlock rendered such authorisation impossible'.
In Thomson v Thomson and Colonial Insurance Company Limited [2015] SC Bda 84 Civ, the court granted an application to the plaintiff to amend her claim for damages for personal injury, and to adduce additional evidence in support of that amended claim, after delivery of the court's judgment on quantum. The court stressed the importance of the overriding objective of doing justice between the parties, as well as the importance of the ethical rule in the Bermuda Bar Code of Conduct, obliging counsel not to take advantage of opposing counsel's 'slips or oversights not going to the real merits of the case'.

Conduct of criminal litigation

In Lottimore & Hatherley v The Queen [2015] CA (Bda) 1 Crim, 8 January 2015, the Court of Appeal for Bermuda dismissed two appeals against convictions for drug importation offences. In so doing, Baker JA, giving the judgment of the Court, made some trenchant criticisms of one the appellant's counsel for his failure to attend a hearing of the appeal: 'this is an entirely unacceptable situation: either [Counsel] should have been present to argue the appeal or he should have returned the brief in sufficient time for other counsel to prepare'.  
The offshore courts have also had a number of occasions to consider appeals against conviction alleging incompetence of defence counsel at trial, including in the cases of Gibbons and Beach v R [2009] Bda LR 41, Campbell v The Queen [2010] UKPC 26, McKenzie v The Queen [2011] UKPC 41, Lawrence v The Queen [2014], UKPC 2 and Graham v R [2014] Bda LR 93.

Originally published in February 2016

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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