A former client sends a few ad hoc follow up requests a year or two after a transaction/piece of advice, which the professional responds to. There is no separate engagement letter, defining the scope and nature of the latest advice. How broadly will the Courts construe the tortious duty of care assumed by the professional?
That was the question addressed by the Court of Appeal in Spire Property Development & Another v Withers LLP [2022] EWCA Civ 970. Dealing briefly with the facts:
- In 2012, a property solicitor at Withers advised the Claimants on the acquisition of two commercial properties. She (negligently) failed to identify three extra-high voltage electric cables running under the property, which would significantly increase development costs.
- Two years later, in 2014, once the cables had been discovered, the former client sent several emails to Withers, largely seeking their views about why agreements granting UK Power Networks (UKPN) the right to lay the cables under the properties (so-called wayleave agreements) had not been discovered at the time of the acquisition. The emails also contained some limited queries concerning whether UKPN could have laid the cables without permission from the owners, asking the solicitor to "elaborate slightly" on issues such as statutory right of access.
At first instance, HHJ Pelling QC took in our view a surprisingly wide view of the duty of care assumed by Withers in dealing with these questions. He interpreted the email exchanges as requiring the solicitor to advise generally on the developers' rights if UKPN could not prove that it held a wayleave – and the compensation that the developers could seek.
The Court of Appeal unanimously disagreed. The scope of an assumed duty of care is a question of objective construction of the relevant exchanges that crossed the line between the parties. Those exchanges are to be read in the context that they were between a solicitor and former client, familiar to each other, and that the developer was a sophisticated professional. Having carried out that exercise, the Court concluded that the emails could not be construed as a request for advice on the developers' potential rights and remedies against UKPN more generally.
While the legal issues ultimately determined by the Courts were not novel – they relied on well-established principles of construing evidence – the result will be a welcome one for professionals. As Lady Justice Carr noted, there are important lessons to be learned: it is important for solicitors (and presumably professionals more generally) to be able to respond constructively to "one-off" requests for advice without fear of creating a broad legal liability, but care should still be taken to identify the limits of that advice.
In the absence of separate engagement letters (which would always be our preference), advice emails should be carefully caveated to make clear the limits of advice given, and where further work will be required.
Finally, it is worth mentioning two novel submissions by Withers on the approach to defining the duty:
- First, it relied on the Bolam principle: if the view taken by the solicitor about the scope of the task was one a reasonably competent solicitor could have adopted, that was sufficient. That was rejected as it wrongly conflated the questions of (i) defining the duty of care, and (ii) assessing breach. The duty of care is a matter of objective construction, and the views of a reasonably competent solicitor are not relevant.
- Secondly, it relied on the scope of duty test set down by the Supreme Court in Manchester Building Society v Grant Thornton in submitting that the Court should have regard to the purpose for which the advice was sought, objectively judged. That was rejected as it wrongly conflated defining the duty with assessing the recoverability of damages.
Despite submissions to the contrary, defining the duty remains as before: an objective assessment of the exchanges that cross the line between the parties.
If you'd like to know more about what this might mean for you, reach out to a member of our Disputes & Investigation team.
