Bevan Ashford can be sued by wife of fraudster

Former law firm Bevan Ashford can be sued by the wife of a man who was later convicted of a £2m fraud, appeal judges have ruled.

Bevan Ashford demerged in 2004, leading to the creation of Ashfords and Bevan Brittan. Garry Mackay, the partner named in the case, is currently partner and head of commercial services at Ashfords.

The Court of Appeal heard that Heather Padden was told 'apparently out of the blue' by her husband, a financial consultant, in 2003 that she could not go shopping because their joint bank account had been frozen.

The husband later told her, in the company of his solicitor, that he had stolen £200,000 from one of his clients and the only way he could avoid a criminal prosecution was by selling their house.

Giving the leading judgment in Padden v Bevan Ashford [2011] EWCA Civ 1616, Lord Neuberger said her husband's solicitor wrote to Padden saying she had agreed to give up her interest in the house, and in certain endowment policies, pensions and shares, to help her husband. The solicitor told her to seek independent legal advice.

'The first two solicitors she called on declined to advise her, apparently because of the size of the proposed transaction,' Lord Neuberger said.

'She then visited the defendants' Tiverton branch and told a receptionist that she needed to see a solicitor urgently, not least because she needed to get back home to see her children.'

Lord Neuberger said Padden saw Rebecca Shinner, who 'had only very recently qualified as a solicitor'.

The free meeting was short, and when Shinner told Padden not to go ahead with the transaction, Padden 'made it clear she was going to proceed'.

The following month Padden took four documents to the Exeter offices of Bevan Ashford, with her husband, where they saw Garry Mackay. Mackay witnessed their signature on the four documents, including a mortgage which specified that its consequences must be explained.

Lord Neuberger said that, according to Padden, she received 'no advice whatever' from Mackay, but Mackay did not give evidence during the High Court hearing.

Padden's husband was later convicted of obtaining around £2m by deception and sentenced to six years in prison. The couple divorced in 2010 and the husband died shortly afterwards.

Lord Neuberger concluded that the High Court judge was wrong to conclude that Bevan Ashford had complied with its duty and it was 'not possible for this court to hold that the claimant would have acted no differently if she had been properly advised.'

The Master of the Rolls allowed Padden's appeal and said there must be a retrial under a different judge. Lord Justices Hughes and Sullivan agreed.

Jonathan Ross, partner at property specialists Forsters, said solicitors who gave free advice were 'certainly under a duty of care' to the client, though the extent of the retainer might be less where the advice was confined to a 30 minute free appointment.

Ross said the duty was 'particularly onerous' where wives were coming into offices asking to sign documents giving up rights to help their husbands.

'Solicitors offer free services to get clients through the door, but if you don't control or patrol it, it can come back and bite you,' he said.

A spokesman for Ashfords, which is acting for Bevan Ashford, said: 'Whilst the Court of Appeal recently overturned the High Court decision that was made in 2011 to reject Mrs Padden's case, the matter has been remitted back to Bristol District Registry for retrial and therefore there has been no final decision on the case.'