Professional Negligence Against Solicitors in NSW: Lofts v Lawcover Insurance Pty Limited [2026] NSWDC 68
In Lofts v Lawcover Insurance Pty Limited [2026] NSWDC 68, the District Court of New South Wales delivered an important decision on professional negligence claims against solicitors arising from estate planning and will drafting. The case concerned a solicitor’s failure to advise a testator and his de facto partner that their home, held as joint tenants, would not pass under the terms of their wills unless the joint tenancy was first severed. That omission proved fatal to the testamentary scheme they had plainly intended to implement. When the testator died, his interest in the property passed automatically to the surviving joint tenant by survivorship, leaving his son with no entitlement to the property despite the clear wording and structure of the will.
The Court held that the solicitor owed a duty of care not only to the client testator, but also to the intended beneficiary, being the testator’s son. The Court further found that the solicitor breached that duty by failing to explain the effect of joint tenancy and failing to advise on the straightforward and inexpensive steps available to sever it. On the evidence, the Court was satisfied that, had proper advice been given, the joint tenancy would have been severed and the plaintiff would have received the benefit intended for him. Damages were assessed at $510,000. The decision is a significant authority in solicitor negligence litigation, particularly in claims involving wills, estates, joint tenancy, disappointed beneficiaries and estate planning advice.
If you believe you may have suffered loss as a result of negligent legal advice, particularly in the context of wills, estates, or property ownership structures, Arida Lawyers can assist.
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Lofts v Lawcover Insurance Pty Limited [2026] NSWDC 68
Key Takeaways
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Professional negligence by solicitors extends beyond missed limitation periods, litigation errors, or transactional mistakes.
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Estate planning failures can result in significant liability where a will is drafted without ensuring the underlying asset ownership structure allows it to operate effectively.
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Where a solicitor knows a property is held in joint tenancy and that the testator intends their interest to pass under a will, reasonable care may require advising on severance as part of the will-making process.
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Intended beneficiaries can bring negligence claims against solicitors where a clearly expressed testamentary intention is defeated.
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The duty owed to beneficiaries is not unlimited, but arises where the beneficiary is specifically identified and vulnerable to the solicitor’s error.
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Not all solicitor negligence claims are “loss of chance” cases.
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Where a plaintiff loses a defined legal or property benefit, and it is proven on the balance of probabilities that the benefit would have been obtained, full damages may be awarded.
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Courts will not necessarily discount damages based on hypothetical possibilities where the loss is clearly established.
Background
The plaintiff, Alexander Lofts, was the only child of the late Mr Jeffrey Lofts. Mr Lofts and his de facto partner, Ms Regina Miller, had been in a relationship since 1994 and in 2016 instructed Atkinson Vinden Lawyers to prepare updated wills. They owned a property at Forster, New South Wales, as joint tenants. The wills prepared for them were designed so that the survivor would have a conditional life estate in the Forster property, with the remainder of each party’s respective interest intended ultimately to pass to his or her own children from earlier relationships. In Mr Lofts’ case, that remainder was intended to pass to the plaintiff.
The difficulty was that the Forster property was held in joint tenancy. As the Court explained, because of the principle of survivorship, Mr Lofts’ interest in the property did not fall into his estate when he died on 23 January 2023. Instead, Ms Miller succeeded to the whole of the interest automatically. The plaintiff later discovered that, despite what his father had told him over many years and despite the apparent scheme of the will, he would receive no interest in the property at all. Atkinson Vinden Lawyers had by then gone into liquidation, and the proceedings were brought against its insurer, Lawcover Insurance Pty Limited, under the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW).
The Court accepted evidence that Mr Lofts had repeatedly told the plaintiff that he wanted his assets ultimately to go to him. The solicitor’s own file note from March 2016 recorded the Forster property as being held by Mr Lofts and Ms Miller as “Joint Tenants”. The retainer letter of 18 May 2016 stated that the firm would act in relation to “estate planning generally”, including receiving instructions, giving general discussions and advice regarding courses of action and documents recommended, preparing updated wills and attending on explanation and signature. Against that background, the Court was satisfied that the solicitor was retained not merely to draft formal documents, but to advise in a way that would give practical effect to the clients’ testamentary intentions.
Application of Case Law and Legislation
The Court’s analysis was anchored in both statutory negligence principles and established authorities on solicitor liability to disappointed beneficiaries. The principal statutory provisions were sections 5B, 5D and 5E of the Civil Liability Act 2002 (NSW), together with the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW), section 97 of the Real Property Act 1900 (NSW), section 90DA of the Family Law Act 1975 (Cth), and rules 42.1 and 42.2 of the Uniform Civil Procedure Rules 2005 (NSW).
Section 5B of the Civil Liability Act 2002 (NSW) deals with breach of duty. It requires the plaintiff to establish that the risk of harm was foreseeable, not insignificant, and that a reasonable person in the defendant’s position would have taken precautions against it. The Court applied that section in a conventional way. The foreseeable risk was obvious: if the solicitor failed to advise that the joint tenancy had to be severed, the testamentary scheme in the will would fail and the intended beneficiary would be deprived of the intended gift. Given that the mechanism for severance was well known, simple and inexpensive, the Court had little difficulty concluding that a competent solicitor exercising reasonable care would have given that advice and taken the necessary steps as part of the will-making process.
Section 5D of the Civil Liability Act 2002 (NSW) governs causation. Under section 5D(1)(a), the plaintiff had to prove factual causation, namely that the negligence was a necessary condition of the harm. Under section 5D(1)(b), the plaintiff had to establish that it was appropriate for the scope of liability to extend to that harm. The Court carefully distinguished factual causation from normative scope of liability, drawing on Wallace v Kam and Lucantonio v Sticher. It found that, had the solicitor properly advised Mr Lofts and Ms Miller that the joint tenancy had to be severed to make the wills effective, the necessary steps would have been taken. The harm suffered by the plaintiff was exactly the kind of harm the solicitor’s duty was meant to guard against, namely the loss of the intended testamentary benefit. Section 5E was also engaged, as it confirmed that the burden of proving the relevant facts on causation rested with the plaintiff. The Court held that burden had been discharged.
The proceedings against Lawcover were brought under the Civil Liability (Third Party Claims Against Insurers) Act 2017 (NSW), because the original solicitors’ practice had gone into liquidation. That legislation permitted the plaintiff to pursue the insurer in respect of the liability of the insured solicitors. The Court was satisfied that Atkinson Vinden Lawyers was an insured person within the meaning of that Act and that the insurer was liable to meet the plaintiff’s successful claim.
Section 97 of the Real Property Act 1900 (NSW) was relevant because it provided part of the legal machinery by which a joint tenancy could be severed. The Court referred to the available mechanisms, including a unilateral Transfer Severing Joint Tenancy and a bilateral Transfer Altering Tenancy. The significance of this was practical: the Court was not dealing with some obscure or difficult legal solution. Rather, it was dealing with an elementary estate planning issue that could have been addressed by standard conveyancing steps at modest cost. That practical ease of rectification strongly supported the conclusion that the failure to advise on severance was negligent.
The Court also considered a number of authorities that define the scope of a solicitor’s duty in will-drafting and estate planning negligence claims. Hill v Van Erp was central because it recognises that a solicitor retained to give effect to a testator’s intentions may owe a duty of care to an intended beneficiary where carelessness defeats the gift. The Court treated that authority as foundational. It also relied on Badenach v Calvert, where the High Court explained that the duty owed to an intended beneficiary is sourced in, and limited by, the solicitor’s obligations in carrying out the retainer for the client. Importantly, Badenach draws a distinction between steps integral to implementing the will and broader advice about antecedent transactions or family provision risks. In the present case, the Court considered severance of the joint tenancy to be integral to the will-making process because, without it, the specific gift structure in the will could never take effect.
The Court also engaged with Vagg v McPhee, Carr-Glynn v Frearsons and Smeaton v Pattison. Those cases illustrate the line between circumstances where a solicitor is not liable because the alleged testamentary intention was not sufficiently expressed, and circumstances where liability does arise because the solicitor failed to address a known legal obstacle to implementing a clear intention. Here, the Court found the case fell squarely into the latter category. Mr Lofts’ intention was not vague or contingent. It was expressly reflected in the terms of the will itself, in the solicitor’s file note and in the surrounding evidence. The decision therefore sits comfortably within the established line of authority recognising liability where the solicitor fails to ensure that clearly identified property can pass in the way the client has instructed.
The judgment also referred to R Lawyers v Mr Daily [2025] HCA 41 in dealing with causation and loss. That authority distinguishes between loss of an identified benefit and loss of a chance to obtain a better outcome. The Court applied that distinction and held that the plaintiff’s case was not merely one of lost opportunity. Rather, he had lost an identifiable proprietary benefit that would have been secured but for the negligence. That conclusion materially affected the measure of damages.
The Findings Made
The Court first found that the solicitor owed a duty of care to the plaintiff as an intended beneficiary under Mr Lofts’ will. That conclusion flowed from the terms of the retainer, the fact that the plaintiff was specifically identified in the testamentary scheme, and the principle that a beneficiary in that position is vulnerable to solicitor error and unable to protect himself from it. The duty was not unlimited, but it extended to the taking of reasonable care to ensure that Mr Lofts’ clearly communicated testamentary intention to benefit the plaintiff was made effective.
Secondly, the Court found breach of duty. The solicitor knew the Forster property was held in joint tenancy. The solicitor also drafted a will that purported to give Mr Lofts’ interest in that property to a trustee on terms designed to provide Ms Miller with a life interest and ultimately pass the remainder to the plaintiff. Those two matters were irreconcilable unless the joint tenancy was severed. The Court found that a competent solicitor would have advised the clients that the joint tenancy meant the property would not pass under the will and would have advised on, and facilitated, severance. The absence of any file note, invoice entry or correspondence recording such advice supported the conclusion that it was never given.
Thirdly, the Court found causation established. The defendant argued that the plaintiff had failed to prove that Mr Lofts or Ms Miller would actually have severed the joint tenancy had they been properly advised. The Court rejected that argument after a detailed review of the evidence. It found that both parties intended the survivor to be protected during his or her lifetime, but also intended their respective children to inherit their respective shares thereafter. The Court considered it more probable than not that, if told that severance was required to make that arrangement work, they would have taken that step. Even at minimum, the Court found that Mr Lofts would have instructed the solicitors to undertake the severance.
Fourthly, the Court found that the plaintiff’s loss was the loss of a defined property interest, not a speculative chance. The experts had valued the Forster property at between $1.45 million and $1.55 million, and the Court adopted a midpoint of $1.5 million. It then accepted actuarial evidence that the present value of the plaintiff’s remainder interest was 34 per cent of that amount, producing damages of $510,000. The Court declined to award pre-judgment interest because, absent the negligence, the plaintiff would still not yet have received the asset outright at the time of judgment.
The Significance of the Decision
This is an important solicitor negligence decision for several reasons. First, it underscores that estate planning is not simply a document production exercise. Solicitors retained to draft wills must understand the legal character of the assets involved and must ensure that the proposed testamentary dispositions are capable of taking effect in law. A will can be perfectly drafted on its face and yet professionally negligent in substance if the solicitor fails to confront the legal ownership structure of the property the will seeks to distribute. That is one of the clearest practical lessons from this judgment.
Secondly, the case is significant for claims by disappointed beneficiaries against solicitors. It demonstrates that courts will continue to recognise such claims where the beneficiary is specifically identified, the solicitor’s retainer is directed to giving effect to that intention, and the beneficiary’s loss flows directly from the solicitor’s failure. For plaintiffs considering professional negligence claims against solicitors in New South Wales, this judgment is a useful contemporary example of how such causes of action can succeed where duty, breach and causation are carefully established.
Thirdly, the decision is especially important in the recurring context of joint tenancy and wills. Joint tenancy remains a common source of error in estate planning disputes. Many lay clients assume that their will governs “their half” of a jointly owned property, when in fact survivorship operates outside the estate unless the joint tenancy is severed before death. Where solicitors fail to identify and explain that issue, they risk not only a negligence claim by the estate or the client’s insurer, but also direct liability to the person deprived of the intended inheritance.
Finally, the judgment is a useful authority on causation and loss in legal negligence claims. It confirms that courts may infer what a client would probably have done if properly advised, particularly where the omitted advice concerned a straightforward step necessary to implement a clear legal objective. It also confirms that courts will not automatically characterise every professional negligence case as a loss of chance case. Where the evidence permits a finding that a specific benefit would have been secured, full compensatory principles may apply.
How Arida Lawyers Can Assist
At Arida Lawyers, we assist clients with complex professional negligence and commercial litigation matters, including claims against solicitors arising from negligent legal advice, failed transactions, misleading and deceptive conduct, estate planning errors, defective drafting, losses suffered by beneficiaries, executors, trustees and businesses. This decision is a strong reminder that solicitor negligence claims are often won or lost on the quality of the factual reconstruction.
Our role is to identify whether the solicitor’s retainer extended to the impugned advice, whether the alleged omission was truly negligent by professional standards, whether the loss is legally recoverable, and whether proceedings should be directed at the firm, its principals, its insurer or another relevant entity. Whether you are a disappointed beneficiary, executor, trustee or party to a failed legal transaction, Arida Lawyers can provide clear, strategic advice on the merits of a claim and the best path to resolution.
Frequently Asked Questions
Q1. What is professional negligence by a solicitor?
Professional negligence by a solicitor arises when a lawyer fails to exercise the reasonable care and skill expected of a competent practitioner, and that failure causes loss. In the context of wills and estates, that may include drafting errors, failure to identify legal obstacles to giving effect to a will, or failure to advise on necessary steps such as severing a joint tenancy. In Lofts, the negligence was the solicitor’s failure to advise that the property would not pass under the will unless the joint tenancy was severed.
Q2. Can a beneficiary sue a solicitor for negligence?
Yes. An intended beneficiary may, in some circumstances, sue a solicitor directly for professional negligence. The key question is whether the solicitor’s retainer and conduct were directed to conferring a benefit on that beneficiary and whether the beneficiary was vulnerable to the solicitor’s error. In Lofts, the Court held that the plaintiff, as the clearly intended beneficiary of his father’s testamentary scheme, was owed a duty of care.
Q3. Why did the will fail in this case?
The will failed to the extent it dealt with the Forster property because the property was held in joint tenancy. On Mr Lofts’ death, his interest did not fall into his estate. It passed automatically to Ms Miller by survivorship. That meant the life estate and remainder structure set out in the will could not operate in relation to that property unless the joint tenancy had first been severed.
Q4. What is severing a joint tenancy?
Severing a joint tenancy changes co-ownership from joint tenancy to tenancy in common. That is important in estate planning because a tenant in common’s share can pass under a will, whereas a joint tenant’s interest ordinarily passes automatically to the surviving joint tenant. In this case, the Court found that the solicitor should have advised on severance and that there were simple, inexpensive mechanisms available to achieve it.
Q5. Was this a loss of chance case?
No. The Court held that the plaintiff had lost an identifiable property benefit, not merely a chance to secure a better outcome. Because the Court was satisfied on the balance of probabilities that the joint tenancy would have been severed if competent advice had been given, the case was not treated as involving only a discounted lost opportunity.
Q6. How were damages calculated?
The Court adopted a midpoint property value of $1.5 million for the Forster property and accepted expert evidence that the present value of the plaintiff’s remainder interest was 34 per cent of that amount. Damages were therefore assessed at $510,000. The Court declined to award pre-judgment interest.
Q7. Why is this case important for estate planning solicitors?
The case is important because it confirms that will drafting must be matched by competent advice about asset ownership structures. A solicitor cannot safely prepare a testamentary scheme involving real property without considering whether the client actually holds an estate interest capable of passing under the will. Failure to address that issue may expose the solicitor, and potentially the solicitor’s insurer, to substantial liability.
