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.
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.