Negligent pension advice in a divorce case
Pensions frequently take centre stage in acrimonious divorce cases. Solicitors therefore need to be familiar with pension law and to keep up to date with the latest developments. Failing to provide accurate and adequate pension advice in a divorce case can prove very costly as a recent court case involving a firm of solicitors based in Essex has shown — the firm has been ordered to pay a former divorce client compensation totalling £400,000 after failing to give her advice on her entitlement to her husband’s police pension pot.
The professional negligence claim was made after the firm’s client agreed to a £62,000 clean-break settlement, without her solicitors offering any guidance on whether the agreement was fair. The solicitors declined to give advice because no financial disclosure had been given by her husband and they asked her to sign a disclaimer when she reached an agreement with her ex-husband direct.
The court heard that the woman had been bullied and intimidated by her former husband and was therefore vulnerable. The pension asset should therefore have been ‘actively considered’ by her solicitors.
The judge said that ‘any reasonably competent solicitor ‘ would have advised their client that the proposed terms of settlement order strongly favoured her husband and would not give her long term provision in retirement. While full disclosure had not been given, the court believed that the firm had enough information to advise in general terms.
By refusing to offer that advice and insisting that she signed a disclaimer, her solicitors had ducked the issue and in doing so had committed a ‘clear’ breach of duty.
While the solicitors had referred to a ‘pension sharing order’ as one of the possible orders a court could make, the court felt this was insufficient. The client should have been given clear advice about what she could reasonably hope to achieve if the proposed settlement was not accepted and as such the solicitor’s advice had been negligent.
If you have lost out due to negligent pension advice in a divorce case, then contact our free legal helpline for a case assessment and details of no win, no fee funding.