The recent Court of Appeal decision in Spire Property Development LLP and another v Withers LLP helps clarify the scope of the duty owed by a solicitor when providing legal advice outside of an agreed retainer and also serves as a useful reminder to solicitors on how to avoid the risk of litigation when responding to informal enquiries.
This appeal arose out of a claim for professional negligence brought by two property developers (together, the claimants) against the firm of solicitors, Withers LLP (Withers).
Withers were retained by the claimants for their purchase of two high-value, Grade II listed properties which shared a common boundary and were to be redeveloped in parallel. Both purchases were completed in late 2012.
The claimants subsequently contacted Withers in January 2014, upon discovering three extra-high voltage electricity cables running under both properties owned by UK Power Networks (UKPN).
In 2018, the claimants commenced proceedings against Withers alleging breach of contract or negligence for:
- Failing to make sufficient searches or enquiries so as to identify electrical cables prior to the purchase (the 2012 Claim); and
- Failing to provide adequate advice in 2014 as to the claimants’ rights and remedies against UKPN (the 2014 Claim).
In a judgment dated 24 September 2021, the Commercial Court found in the claimants’ favour in respect of both claims.
The appeal
The question before the Court of Appeal related to the 2014 claim only. In particular, the court was asked to decide whether the Commercial Court had erred in its decision that Withers had assumed a duty of care to advise the claimants of their rights against UKPN.
This required a careful consideration of the email exchanges between the parties in the period 2 January to 3 February 2014, of particular note:
- An email from the claimants to Withers dated 28 January raising a number of specific queries regarding the discovery of the cables; and
- Withers’ 3 February response to those queries.
Withers accepted that, in so far as advice was offered in response to the claimants’ specific queries, a duty existed to exercise reasonable care in the giving of that advice, however, this duty did not extend to advising upon the wider remedies available against UKPN.
The claimants maintained the original decision was correct, arguing it was implied from their 28 January email that they wished to know of their rights against UKPN, and stating they had understood Withers’ lack of advice on the issue to mean UKPN had an unfettered right to lay the cables and there was nothing they could do about it.
The judgment
The court provided a helpful summary of the general legal principles as to a solicitor’s contractual duties owed under a retainer, as follows:
“A retained solicitor owes no duty to go beyond the scope of their express instructions and give advice in relation to other matters. This is subject to the qualification that the duty extends to giving advice that is “reasonably incidental.”
It is also a well-established principle that a solicitor retained by a client also owes a concurrent independent duty of care in tort.
The court proceeded to consider the position where no retainer existed, referencing Hedley Byrne & Co Ltd v Heller & Partners Ltd which remains the governing authority for a duty assumed by the assumption of responsibility. Applying this to a solicitor providing advice, the court held:
“A solicitor is taken to have voluntarily assumed a legal responsibility where they undertake responsibility for a task: it is the undertaking to answer the question posed which creates the relationship.”
The court agreed that no contractual duty existed, meaning the claimants were required to demonstrate that there had been an assumption of responsibility by Withers beyond simply answering the specific questions asked of them:
“The central question is therefore the scope of the assumption of responsibility on the facts.
That scope… is a question of objective construction of the relevant exchanges that crossed the line between the parties, specifically the February email responding to the 28 January email. In carrying out the exercise of construction, the relevant email exchanges are not to be read as if they were formal legal documents, and must be considered in the context that they were exchanges between a solicitor and former client who were familiar to each other and involved in ongoing professional relationships on other projects. At the same time, the developers were both highly experienced and well-resourced …”
Lady Justice Carr held that three discrete questions had been asked, all backward looking and probing to find out the reasons why the cables had not been discovered prior to the purchase, implicitly pointing the finger at Withers or the sellers of the properties, thus prompting a guarded response.
Applying the relevant objective test, the court concluded that, as a matter of construction, Withers had not, in its response, assumed a responsibility to provide broader advice as to the claimants’ potential remedies. The appeal was allowed.
Comment
This is not only a helpful decision in clarifying the scope of the duty owed by a solicitor where there is no retainer in place, but also serves as an important reminder to solicitors who receive informal email enquiries from current or prospective clients, on how to avoid facing future litigation.
This is reflected in Lady Justice Carr’s comments where she notes that, although solicitors should be able to respond to “one-off” requests for advice, they should be careful to ensure that sufficient care is taken to identify the extent of the assumption of any responsibility.
