Successful claim against solicitors by trust beneficiaries for loss of benefits under lifetime trusts (Gosden v Halliwell Landau)

Article summary

Private Client analysis: In this professional negligence case the court upheld a duty of care owed by solicitors to beneficiaries under a discretionary trust created as part of a tax planning scheme during the settlor’s lifetime. It dismissed limitation arguments under section 14A of the Limitation Act 1980 (LA 1980). The claim arose from a scheme created in 2003, with the property subsequently sold in 2010 resulting in loss in 2013 (on the settlor’s death) of which the beneficiaries were unaware until 2015. The claim was dismissed at first instance on the defendants’ arguments that the claimants’ failed to prove loss of any substantial chance to benefit under the tax planning scheme. The Court of Appeal reversed the causation decision, holding liability to be based on the straightforward loss, on the balance of probabilities, of the beneficiaries’ entitlement under irrevocable trusts. The judge subsequently assessed damages of approximately £1m based on the value...