Every September, many members of 4 New Square are involved in updating Jackson & Powell on Professional Liability. Helen Evans KC identifies some interesting and disparate themes which struck her while working on the Solicitors’ and Barristers’ Liability chapters with Hugh Evans.
Duties to third parties
Many of the big cases in 2023 have focused on when lawyers owe duties to third parties- whether solicitors in conveyancing transactions (Ashraf v Lester Dominic  EWCA Civ 4) or tax barristers advising promoters (McClean v Thornhill  EWCA Civ 466).
Although it is clear that the touchstone of liability is “assumption of responsibility”, Ashraf in particular offers a helpful categorisation of three classes of case where duties to third parties may arise, namely:
- Where the purpose of a retainer is to confer a benefit on a third party, i.e. disappointed beneficiary style cases such as White v Jones  2 AC 207;
- Where a professional person makes representations on which another party reasonably relies and where the professional could reasonably foresee that reliance; and
- The so-called “Al Kandari” principle, where a professional steps out of their role acting for one party and takes on duties to two.
McClean v Thornhill, which has attracted a lot of press attention, concerned a fact pattern allegedly falling within Category 2 above, although an attempt was also made to assert that the tax barrister had not only made representations but stepped outside the usual role of a barrister (so as to engage the Al Kandari principle described in Category 3).
But what about Category 1? Is that now set in stone?
The recent Guernsey case of Dorey v Ashton  PNLR 19 concerned the opposite of the usual White v Jones facts. Rather than beneficiaries suing a solicitor because a testator had failed to make a will, or because the intended gifts had gone wrong, the children of a testator sued his solicitors because he had made a will. They argued that the testator had lacked testamentary capacity at the time and that no will should have been made. One way of looking at the case is that the children’s argument was that they were owed a duty because the testator should have been prevented from taking away a benefit they would otherwise have had.
The claim failed. The Guernsey Court held that it was unnecessary to fashion a remedy to protect beneficiaries in circumstances where they could already challenge the will. There was no lacuna in the law to be filled. The case shows that Category 1 identified in Ashraf can only stretch so far.
Standard of care
It is plain from Cutlers Holdings (formerly Sheffield United Ltd) v Shepherd & Wedderburn  EWHC 720 (Ch) that the courts are increasingly reaching for professional codes of conduct as persuasive evidence of a reasonable standard of competence. The case also affirms the importance of assumption of responsibility in a different context, namely that where claimants choose to sue partners as well as firms, they will need to prove that there was an assumption of responsibility by that partner in his or her personal capacity.
MBS Sanity check
The Supreme Court’s judgment two years ago in MBS v Grant Thornton  UKSC 20 caused a lot of debate when it came out. Was the six point test suggested by the court to be applied in every single case? To what extent did it intend to change the law? The recent Court of Appeal case of URS Corporation Ltd v BDW Trading  EWCA Civ 772 suggests that the six point test does not always have to be followed by rote, and can instead act as a “sanity check” on the answer or a useful guide in a novel situation
Break in the chain of causation
One issue which comes up where more than two sets of professionals have been involved in a matter is when the act of the second can break the chain of causation in respect of the first. The recent non-professional liability judgment of Andrew Baker J in Jenkinson v Hertfordshire County Council  EWHC 872 suggests that a first tortfeasor does not have to show that the subsequent act of a second tortfeasor was grossly negligent in order to break the chain. We can therefore expect the debate to be re-ignited in the professional liability context before long.
Loss of a chance
A topic of perennial debate is when it is appropriate to make no loss of a chance discount in a lost litigation case because the hypothetical outcome of that case is sufficiently obvious. Adding to that discussion is the recent Scottish case of Centenary 6 v TLT LLP  CSOH 28. There, the Court held that it is not always necessary to make a percentage deduction when considering the impact of an argument of law in a lost litigation case. If a legal point would have been a “virtual certainty”, it may be appropriate to make no discount at all.
© Helen Evans KC of 4 New Square Chambers, October 2023
This article is not intended as a substitute for legal advice. Advice about a given set of facts should always be taken.
Helen Evans KC was called in 2001 and appointed silk in March 2022. Helen specialises in professional liability, regulatory fraud and insurance work, with a large part of her practice focusing on lawyers’ and accountants’ liability and disciplinary matters. Helen is a co-editor of the solicitors and barristers chapters in Jackson & Powell on Professional Liability. Prior to taking silk, in November 2021 Helen was named “Professional Negligence Junior of the Year” and in April 2022 was named “Times Lawyer of the Week.”