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Legal Advice

1. It was (arguably) beyond the remit of the High Court inspector to make exhaustive comment on the giving of legal advice to Mr. Jim Flavin (“Flavin”) on the legality of the sale by Flavin of Fyffes’ shares.

2. However, the advice was wrong, the inspector says. (He could hardly say anything else, given that the Supreme Court effectively said the same thing).

3. Consequently, the question as to whether the solicitor who gave that advice was negligent could arise. Hopefully, the solicitor knew this and qualified the advice with the use of some formulation like “…on the one hand this… on the other hand that…”.

4. But then Flavin would have been in a quandary. He would not have been able to sleep with worry about the possibility that he was about to commit a crime.

5. But what of the solicitor? Is his sleep of no consequence? If he says, positively, that the sale of shares is legal; is not a crime, and is nonetheless wrong, is he not liable to the client? How can he sleep with the worry that his advice will prove to be wrong?

6. Even if he has nerves of steel and a will of iron, what can he say to the client who returns to him after the trauma of even a successful defence of the client’s actions? Did he not advise the client of the possibility, indeed the likelihood of litigation? If he did, surely the client had grounds to doubt the legality of what was proposed and if he did not surely the client, learning of the decision in C. W. Dixey and Sons Ltd. v Parsons [1964]192 E G where the court said;

“In the present circumstances the solicitor owed a duty of care to his client to take reasonable care, not only to protect his client against committing a breach of the law but to protect him against the risk of being involved in litigation… It would not do for him to say that in his view it was all right. There was an obvious danger that a different view might be taken. In the present circumstances the ordinary careful solicitor would have gone to see his clients and advised them not to sign.”

would be rightly aggrieved at the advice the solicitor had given.

7. Of course, there is another way of seeing the situation. There are some things upon which a solicitor should not venture an opinion or advice and clients should not seek such opinion or advice.

One Comment

  1. Advice that turns out to be wrong is not, by that fact alone, negligent. I seem to be the only one in Ireland who is willing to entertain the notion that this might be a case where the Supreme Court reached a perverse decision based on hindsight reasoning.

    Is it not at least odd that DCC has had to hand over €42m to Fyffes because it (DCC) is deemed to have dealt while it had price-sensitive information (“psi”), but none of the so-called victims think it was psi ? Even odder, arguably, Fyffes itself, at the relevant time, judged it not to be psi, and acted on that judgement, although it changed its view some time later.

    A final peculiarity: DCC and its legal advice came to grief on the disagreement between the High Court and the Supreme Court on the meaning of a statutory provision that, presumably on the grounds that it was grotesquely restrictive, was repealed even before the Fyffes v. DCC action was tried in the High Court.

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  1. By Digest – Feb 2 2010 – The Story on Sunday, February 7, 2010 at 11:29 pm

    […] Edward McGarr of McGarr Solicitors on the DCC/Flavin stuff. […]