Scottish Court of Session Decisions

In August 1891 Thomas Purdom & Son, solicitors, Hawick, wrote to J. M'Keever & Son, solicitors, Carlisle, introducing their client J. A. Macdonald, contractor, Hawick, in order that an action at his instance against the Corporation of Workington might be raised and prosecuted by Messrs J. M'Keever & Son.

The action was brought but was unsuccessful. J. A. Macdonald was unable to pay the balance of the account incurred by Messrs M'Keever & Son for professional services rendered by them and their London agents in connection with the action.

During the progress of the action the firm of J. M'Keever & Son in March 1892 assigned their business to the firm of J. M'Keever, Son, & Livesey, and the latter firm in August 1892 assigned their business to Alfred John Livesey, solicitor, Carlisle. The latter became entitled under the assignations to all unpaid accounts due to his authors.

In January 1894 Mr Livesey raised an action against Messrs Thomas Purdom & Son for the sum of £604, 15s. 7d., being the amount of their account for services rendered in connection with Mr Macdonald's action.

The pursuers averred, inter alia—“(Cond. 5) By the law of England, a solicitor employing another solicitor in the conduct of an action for a client, as in the present case, is held to employ him as his own agent in the matter, and is personally responsible to him for all costs and charges incurred. The contract of employment between the defenders and the said John M'Keever, and J. M'Keever, Son, & Livesey, and the pursuer, is an English contract, and the rights and liabilities of parties thereunder fall to be determined by the law of England, according to which the defenders are liable in payment of the account sued on.

The defenders pleaded, inter alia—“(3) The defenders never having employed the pursuer or his alleged predecessors or their London agents, to perform the services and to make the payments charged for, should be assoilzied. 4. Separatim, assuming that the work charged for was done, and the outlays stated in the pursuer's account were made on the instructions of the defenders, they acted as agents for a disclosed principal, and are not themselves responsible to the pursuer or his alleged authors.”

After hearing proof the Lord Ordinary ( Kyllachy) on 6th April pronounced the following interlocutor:—“Finds that the contract of employment, being to be performed in England, its construction and effect falls to be determined by the law of England: Finds that by the law of England an agent duly authorised, contracting on behalf of a disclosed principal, does not pledge his personal credit: Finds that by custom, judicially recognised, there is an exception to this rule in the case of contracts of employment between country solicitors in England and also between country solicitors in England and London solicitors, but that the pursuer has failed to prove that the said exception applies where, as in the present case, one of the parties to the employment is not a solicitor practising, or entitled to practise, in England: Finds, therefore, that the defenders are not personally liable to the pursuer for the balance of the account sued for: And assoilzies them from the conclusions of the action, and decerns.”

“ Note.—… The matter to be decided is whether the defenders, notwithstanding that they acted for a disclosed principal, are personally liable in respect of an alleged rule of the law of England to the effect, as stated by the pursuer, ‘that a solicitor employing another solicitor in the conduct of an action for a client as in the present case is held to employ him as his own agent in the matter, and is personally responsible to him for all costs and charges incurred.’ …

It is not disputed that the contract being to be performed in England its construction and effect must be determined according to English law; and as to that law English counsel have been examined on both sides. There does not, however, appear to be any real controversy as to what the law of England is. It is, on the one hand, admitted that by the general law of England an agent contracting on behalf of a disclosed principal binds his principal and not himself. On the other hand, it is also admitted that to this rule there is in England an exception established by custom, and judicially recognised, to the effect that an English country solicitor employing a London solicitor on behalf of a client becomes personally liable for the latter's costs, and that the result is the same as between English country solicitors when they employ one another. The point to be decided is whether the present case falls within the rule or within the exception.

“It appears to me that the parties here

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must be held to have contracted with reference not to the exception but to the general rule. In other words, I do not think it is proved that the exception in question extends beyond the case of solicitors practising and entitled to practise in England. It is clear upon the evidence that the exception depends not upon any general principle of jurisprudence, but upon what seems properly described as a custom judicially recognised; and I do not, I confess, see how that custom can be extended so as to include a case which can never come within it. The defenders here are no doubt solicitors—that is to say, they practise the profession of the law; but they are not qualified to practise as solicitors in England, and in any question with English solicitors they are, I apprehend, simply laymen.

On the whole, therefore, I have come to the conclusion that according to the law of England the defenders are not liable, and are entitled to absolvitor.”

Against this interlocutor the pursuer reclaimed.

The following are the arguments of the parties, and the opinions of the Court upon the point reported.

Argued for pursuer—By the common law of Scotland a solicitor who instructed another to conduct a case was liable to the latter in the expenses incurred. No doubt the Law-Agents Act 1873 (36 and 37 Vict. cap. 63), sec. 1, altered the common law rule as far as law-agents in Scotland were concerned, but this was an exception, the common law rule still applied when either of the solicitors was not a law-agent. It had been proved that by a general custom throughout England an English solicitor employing another on behalf of a client was liable for expenses incurred by the latter. Therefore both in England and Scotland the same rule applied. The principle thus ruling in both countries necessarily also applied to the case of one solicitor in one of these countries employing a solicitor in the other.

Argued for the defenders—Even if it was assumed that there was here a contract of employment, the client had been disclosed to the pursuer, and the defenders had undertaken no responsibility guaranteeing the pursuer against loss if the client was unable to pay the expenses of the litigation. A general custom affecting English solicitors inter se had no application to this case. The judgment of the Lord Ordinary was right and ought to be upheld.

At advising—