In this article, Neil Hext KC considers Siem v Womble Bond Dickinson (UK) LLP [2026] EWHC 1168 (Ch), and its wider implications for causation and solicitors’ duties to third parties.
Background
This recent case arose from a project to redevelop a property in Kensington, not far from the Royal Albert Hall. In order to commence the redevelopment the claimants first needed to purchase the upper floors of the existing building, which were at the time held by a Cayman Islands SPV. The plan was to purchase the shares in the SPV from the sellers. Purchasing shares in that way meant that the claimants required some form of protection against the possibility of unforeseen liabilities in the SPV. But the claimants and the sellers could not agree as to the form of protection and the transaction hit the buffers. It was revived a short period afterwards, but this time it lapsed (not least because, by this stage, the first claimant had come to believe that he was overpaying for the relevant property).
A claim was eventually brought against WBD, solicitors who had been instructed to act for the third claimant in the transaction. The principal allegation made against them was that they had failed to identify a form of protection against SPV liabilities that would have been acceptable to the sellers, leading the claimants to take an intransigent stance. Had they identified this form of protection, it was said, the parties would have quickly come to a deal and the transaction would have proceeded, ultimately leading to significant profits being earned.
The Decision
The judge dismissed the claim. WBD had not breached their duty in relation to the advice that they gave. And in any event, even if an acceptable form of protection against liabilities had been identified at an earlier stage, the first claimant would not have been prepared to proceed any more quickly because there was not yet agreement on other commercial aspects of the deal.
Causation and the Counterfactual
The case was a very “factual” case in that it turned primarily (and almost exclusively) on the findings that the court made. But there are two points of more general interest that emerge.
First, it illustrates the challenges that can be presented to claimants in establishing a viable counterfactual, particularly in cases that involve loss of business opportunities. Professional liability cases are often interesting from a causation point of view because the “but for” counterfactual can involve so many permutations. Here, the claimants’ case was that, if a deal had been done to purchase the upper floors, planning permission would have been granted for redevelopment. In this context, the claimants put forward three different potential schemes, all three of which were disputed by the defendant. At trial, the defendant’s criticisms caused the claimants to suggest various amendments that could have been made to the schemes. Such amendments had the potential to impact the profit that might be made, which led the claimants to say that, if the claim succeeded, assessment of loss should have been punted off to a later hearing where loss could be calculated with the benefit of the court’s findings on the appropriate scheme.
But the court indicated that, even if liability had been established, it would not have permitted that approach. There had been no case-management direction for a split trial. There had been permission for experts to address the three schemes and the experts had given detailed evidence about them. It was too late for the claimants, if trial revealed significant defects in any of their pleaded schemes, to advance further fall-backs as a basis for claiming damages for loss of profit. “As is frequently observed” the judge said, “a trial is the first and last night of the show; it is not a dress rehearsal.”
That conclusion will no doubt be used against claimants who find themselves attempting to cobble together a viable counterfactual at trial in the face of (perhaps more or less foreseeable) challenges made by the defence. It may be that, here, the judge’s approach was influenced by his overall view of the merits of the case before him. However, query whether it will always be the just result. Obviously, when pleading the case, one tries (as the claimants’ lawyers tried in this case) to build flexibility into the causation analysis in case factual difficulties arise in relation to the assumptions that underpin the analysis. But the sheer number of possible permutations can sometimes create considerable challenges. It can be hard at the pleading stage to narrow these down. Indeed, it is often only at trial that the real viable candidates emerge. An early application for a split trial may possibly be the answer in such cases, although knowing where the split should be can itself be problematic. Too rigid an approach to how to deal with these sort of causation problems has the potential to lock the claimant out from arguing what may turn out to be its best case.
Solicitors’ Duties to Third Parties and Limitation Clauses
The second interesting point that emerges concerns the interaction between the question of to whom WBD owed a duty and the limitation clauses contained in WBD’s standard terms of engagement. Formally WBD’s only client was the third claimant, Mr Wake. No retainer was ever formalised between WBD and either of the first or second claimant. But those latter two entities were the ones who had suffered much of the alleged loss of profit.
The question then was whether WBD had assumed responsibility to the first or second claimants such that there was a duty of care in tort. Applying Ashraf v. Lester Dominic Solicitors [2023] EWCA Civ 4, the court held that (i) the general rule is that a solicitor owes no duty to third parties other than its client, but (ii) there are exceptions to that rule where (a) the purpose of the retainer is to confer a benefit on a particular third party, or (b) where a third party has reasonably relied upon advice given by the solicitor in circumstances where the solicitor could reasonably have foreseen that the third party would do so. In the latter case it is necessary to balance the foreseeability that a third party would rely on the solicitor’s advice against any other factors which would make the imposition of liability on the solicitor unreasonable or unfair.
Save in one narrow respect, the court concluded that there was no duty owed to the first claimant, principally because he had retained his own solicitors throughout the transaction and looked to those solicitors for advice. The position of the second claimant, Chapters Property London Ltd, was more interesting. Chapters was itself an SPV being used by Mr Wake as a vehicle to participate in the project. From October 2017, WBD knew that Chapters was to be the recipient of all of Mr Wake’s profits from the development. It could, therefore, have been reasonably foreseen that Chapters would be relying upon their advice in relation to the substance of the share purchase agreement. It was open to WBD to disclaim liability to Chapters but they chose not to do so. In those circumstances, one might have expected the duty question to be answered in the affirmative without reservation.
However, in the event the court declined to decide the point. The primary reason for refusal was because WBD’s retainer with Mr Wake had in it a clause excluding any recovery for loss of profit. It was not disputed that those terms would not apply to any duty that WBD owed to Chapters. There was an UCTA issue as to whether the exclusion was binding against Mr Wake, which in the event the judge did not resolve either. But he did say that the effectiveness of the exclusion clause was material to the question of whether a duty should be imposed in favour of Chapters. If effective, it might be correspondingly less fair to impose liability to Chapters on WBD. If ineffective, it might be correspondingly more fair to do so.
Practical Implications
It is far from uncommon for solicitors’ retainers to be formally agreed with a particular party but for it to transpire that some other entity, e.g. a corporate vehicle or a subsidiary, is the one that will be fundamentally affected by the transaction. It is often assumed that in such a case a duty will be owed. But the point that this case raises is that that conclusion may not be appropriate where the formal retainer contains limitation or exclusion clauses, at least insofar as the third party is not bound by the relevant clauses thus rendering the imposition of a duty unfair.
This feature creates an interesting tactical dynamic for lawyers advising either party. It may end up being more sensible for claimants to accept that limitation or exclusion clauses are applicable to the proposed duty in tort (subject to UCTA) notwithstanding that the doctrinal route by which that result is achieved may be less than clear. Conversely, it is not hard to see that defendants might accept that such clauses are not binding on third parties precisely so that they can argue that it would be unfair to impose the duty in the first place.
The full judgment can be viewed here.
© Neil Hext KC, 4 New Square Chambers, September 2026
This article is not intended as a substitute for legal advice. Advice about a given set of facts should always be taken.
