Is my lawyer professionally negligent?

[Ceebs]

Hello,

Could someone who understands Spanish law please advise whether I can sue my lawyer for professional negligence?

Our developer has gone into Administration, their bankers have repossessed the site, and in court last week, allegedly, the bank offered in full and final settlement an amount equivalent to 25% of all deposits paid by those people buying off plan. I say allegedly, as the lawyer does not even bother to return phone calls, or emails.

I understand 15 or so buyers , ( all Spanish) have received full refunds.

I understood my lawyer had a professional obligation to request a bank guarantee - Is this correct?

My lawyer is going will take 5% of the money recovered, which is a kick in the teeth givn I have paid him for doing the conveyancing, and is suggesting we go after the developer. Seems a bit pointless to me given the developer has gone bust.

Any advice would be gratefully received.

Ps, this is the letter we received. Sounds like a load of rubbish to me.

Dear Sir and Madam

The purpose of this letter is to update you the situation of the “CONCURSO VOLUNTARIO DE ACREEDORES� (receivership situation) of ACONSA - the developer of the Euro Cam Beach complex in Torrox - declared due to its situation of financial insolvency.

The Administrators have requested the definite liquidation of the company. This means that, apart from the practical impossibility of paying the credits, the purchase contracts have to be cancelled. Since the Bank will either be awarded or will acquire the buildings which were in construction and abandoned, it has offered the buyers a compensation of 500.000 Euros, which will have to be distributed proportionally to the deposits paid by each one: this implies a refund of approximately 25% of the amounts paid.

Accepting this offer not only means receiving money, but it also signifies that the rest of the quantities will not be given up and that the claim will be maintained until the end against the developer. It also implies the immediate resolution of the purchase contracts and to this end, it is necessary that you make a special power of attorney, which template you will find here attached. It is very urgent that you have a Notary officialise that special power with his signature and an apostille and that you send it to us to the direction of this office.

The moment the contracts of resolution are signed, the Bank will give the amount offered and we will proceed to distribute it among the buyers, deducting, as you already know, 5% of the amount claimed to cover the Court Proctors and the Lawyers´ fees for the legal actions necessary to carry on with the claim.

It is very important to insist on the emergency of having the special power of attorney done and sent to our office. This operation has to be all done during the first fortnight of October, since, if it is done later, it will be even more difficult to carry it out and will imply a possible risk of not receiving any refund at all.

Should you have any questions, please feel free to contact us, either by phone, email or any other way you prefer to the following contact details:

“Name of lawyer redacted for obvious reasons�

[Lawbird Lawyer]

Dear Sir/Madam,

I'm sorry we are unable to advice further as we lack the facts and we're unfamiliar on your predicament.

Yours faithfully,

[ceebs]

Hi, thanks for this.

I have sent a request for someone to contact me from your office, however the question I am posed was simply asking whether my lawyer was duty bound to get a bank guarantee to protect my deposit. He hasn't and therefore, can I sue him for not doing so. The apartment was off-plan,and I understand under spanish law, the lawyer must seek to get a guarantee to protect deposits.

Am I correct in my thinking? If so, surely he is negligent in not doing so.

[Lawbird Lawyer]

Dear Sir/Madam,

Law 57/68 establishes that it's the developer's duty to hand you a bank guarantee or insurance policy to secure your stage payments in an off plan purchase. The law doesn't mention anywhere it's the lawyers' obligation.

Furthermore in the Building Act (Law 38/99) penalties are imposed only on developers for non-compliance, not on the conveyance lawyer handling for failure of compliance on the issuance and obtention of bank guarantees.

That's what the Law rules.

Now we can start a contentious debate on whether lawyers are responsible or not to obtain these BGs from developers on behalf of their clients.

The fact is that in light of the above laws which specifically rule this matter nowhere does it mention that lawyers are obliged or its part of their duty of care to obtain them.

We've written an article that endeavoured to wrap-up the matter of Spanish bank guarantees for off-the-plan properties. It's worth a read:

Bank Guarantees in Spain: All That You Ever Wanted to Know but Were Afraid to Ask - 12th November 2008

Another matter being what is our personal stance on this matter.

Our opinion is that it's obvious it's part of the integral duty of care of any conveyance lawyer towards his client to ensure that each and every stage payment, including the initial security deposit which strikes the property off the market, is secured by means of valid bank guarantees or insurance policies.

But our opinion is non-consequential.

What matters really is what the Law rules and nowhere does it rule that it's the lawyers' duty, much less his responsibility, to secure them. Which is why on taking this matter up to a Bar Association it unsurprisingly fails each time as from a strict legal point of view the matter is clear, in our humble opinion.

I believe one should clearly distinguish between lege ferenda and lege lata; even more so lawyers on passing legal advice and opinions in public venues such as fora.

I am fully aware that the above statement may cause some controversy, but that's the legal exposition of how matters are currently. Which is why we always add the tag on our legal articles and advice.- make sure you hire an independent lawyer/law firm. Many of these legal pitfalls are easily avoidable on having hired someone independent that cares only for the client's interests and has no vested interests of their own lurking away in the back of their minds.

You can of course always follow the path of claiming against their Professional Indemnity Insurance, providing they are registered lawyers, and see how that turns out.

If the laws need to be addressed on this grey area, so be it. But the above is a brief exposition of how things are currently.

Yours faithfully,
Raymundo LarraÃ*n Nesbitt

[Unregistered]

I am an English lawyer and read lawbird's post with astonishment not to say shock and horror. Frankly the idea that your lawyer has advised you to pay a deposit without confirming that all the necessary paperwork is in place and particularly a bank guarantee is horrifying to me. I own my own firm in Northwest England. If any of my staff had acted in this fashion two things at least would have happened. 1. They would have been out of the door with their P45 clutched in their hot little hand. and 2. I would have expected to have made a claim on my indemnity insurance.

The idea that it is not the lawyer's responsibility to ensure that bank guarantees are in place is frankly outrageous. What are you employing the lawyer to do? Answer - conveyancing. What is the object of conveyancing? To transfer a good title and to ensure when purchasing off plan that the client's funds are protected. Has this been achieved? NO.

Why has this not been achieved? Because the lawyer did not check that the bank guarantee was in place.

Why did the lawyer not check this? Your guess is as good as mine.

What should you do? Employ a decent lawyer and settle in for the long haul. If Spain does not have a code of conduct for its lawyers similar to that of the SRA in England then it fails in its obligations under the European Convention. Simple as that.

Rant over.

[Lawbird Lawyer]

Dear Colleague,

I understand your rant.

If you re-read my post it says that we believe its part of the integral duty of care of the conveyace lawyer to ensure these bank guarantees are in place as it stands to logic.

However, what the original poster is asking is if there is any redress against his lawyer on having failed to secure them. My reply is that, in strict accordance with our laws, it's the developer's duty, not the lawyer's to obtain and issue a bank guarantee. Laws impose fines exclusively on developers on failing to issue them to off plan buyers. There are no fines imposed on lawyers for not obtaining them. Moreover, if you take such a case before one of the The Law Societies they will normally rule that the lawyer was not responsible in attaining them, again with strict accordance of our laws.

I agree with you that the laws need to be amended on this point. But that's how things are right now and that's how I tell them. Now you may find it shocking but that's the current state of matters relating to this point.

Which is why its very important that you can rely and trust on a law firm to secure them on your behalf.

And just to correct you, you must first pay and then the bank guarantee is issued, normally 30-40 days after. It's not the other way round. This could also be changed of course to better prtotect the interests of consumers.

Yours faithfully,