Your counselor pays for the damage caused

The lawyer, accountant, tax consultant, ... can sometimes miss the mark. Bad advice, bad execution of a rule, lateness. It happens to all of us. But the difference is that if your counselor misses the ball… you are left dealing with the consequences! So what?

A missed opportunity

Mr. X buys a house and pays stamp duties on it. After some time, it appears that he is subject to a higher rate and that he must pay an additional sum. He instructs his lawyer to present an objection, but the latter forgets to do so and the period to file an objection passes.
To be clear: if your proxy holder misses the deadline for submitting an objection, it is no longer possible to file such an objection. The expiration date is considered a deadline, with the emphasis on "dead," as with the fall of a guillotine.

At the start of 2019, X will go to court to file a complaint against his lawyer. In practice, this means that the lawyer invokes his civil liability insurance, after which the insurance company defends itself against the claim.

At first instance, a judge in Liège rejected X's claim, arguing that the chance of winning the appeal against the tax authorities was not very likely.
X appeals. The insurance company then tries to invoke the inadmissibility of the appeal, but the Court of Appeal of Liège has finished its verdict in July 2021.

The tax case

The court hearing the case deals with the tax case for which the objection had to be filed. In this case, it concerned a couple, X and Y, who bought a house to live together. They requested and received a reduced rate on stamp duties for own occupation, but a lot of renovations had to be carried out first. When these were over, X and Y decided not to start living together after all and X sold his share in the house to Y. As a result, X had not fulfilled the occupancy obligation and the tax authorities therefore requested additional stamp duties.

The lawyer advises

X goes to a lawyer who convinces him – with case law – that this is a case of force majeure and that the tax authorities' claim can be refuted. X instructs the lawyer to take the necessary steps to lodge an objection. When X asks after a while what the situation is, the lawyer must confess that he forgot to file an objection. Shortly afterwards, the lawyer sends a bill of fees to X. X opposes to this which sets the ball rolling.

Chances of success

Under Belgian law, a distinction is made between an obligation of means and an obligation of result. If a lawyer or consultant advises you, for example, in a tax case, this is an obligation of means: the lawyer will deploy all necessary resources to achieve the intended result. But if that is not possible, for example because the tax authorities take a negative decision, then the counsel cannot be blamed for this.

The situation is different when dealing with administrative obligations, such as filing an objection. In such case, the counselor commits himself to a result, namely the timely execution of the agreed action. If the lawyer doesn't, as in the case at hand, that's a fault.

But before there can be compensation for that error, it must also be established whether there is damage. And that is exactly the essence of this case. In the present case, the insurance company argues that X had no chance to win the case. But the Court of Appeal looks at, among other things, the argumentation that the lawyer himself had presented to X, which shows that the case was not lost in the first place after all.

The Court of Appeal therefore ruled that the amount of the additional stamp duties is also the amount of the potential damage, and that the chances of success of X were 50%. That is why the Court of Appeal awarded compensation of half of the stamp duties which were additionally due.

No trial in a trial

It may come as a surprise that the court will look at the chances of success and not answer the question of whether X was right or not. It would be conceivable (and this actually happens in other countries) that the court or tribunal would deal with the "missed case" on the merits and also assess it on the merits. In such a situation you get an all-or-nothing judgment. But this does not happen under Belgian law: the court has to assess the chances of success of the missed opportunity. And then it happens that eventually a kind of Solomon's judgment is passed, where everyone is half right and half wrong.

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