Lawyer-Client Relationship: Scope of Duty

Articles

04/06/2024

In this practice note for Practical Law, Francesca O’Neill outlines the law relating to the scope of duty that a lawyer or solicitor practising in England and Wales owes to their client and when they may owe a duty to a third party. The note examines both contractual and tortious common law duties, and discusses the impact of the writtten engagement letter (also called a client care letter) and terms of business alongside implied duties and the duty to advise on matters incidental to the main retainer.

Scope of this note

This note covers the law relating to the scope of the duty of care that a lawyer owes to their client by providing an understanding of the contractual and common law principles that underpin the general duty owed, and examining what may fall within it.

The general and basic model of the lawyer-client relationship is that the client instructs the lawyer to advise them, represent them and take action on their behalf in relation to a specific issue in return for payment. This arrangement appears to be a simple construct. However, ascertaining the scope of the duties – owed by the lawyer to the client – that it gives rise to is not simple. The precise scope of duty frequently becomes a focus of argument where something goes wrong and the client seeks to claim that the lawyer has breached their duty, most often in the context of allegations of professional negligence.

Practitioners should therefore equip themselves with a coherent appreciation of the principles that apply to defining and limiting the scope of a lawyer’s duty. Those principles are practical, because all lawyers should be aware of their clients’ reasonable expectations of the job they will do, but also high level, because they involve interpreting an evolving body of common law decisions and theory concerning the duties owed by professionals more generally.

For an overview of professional negligence and defendant liability, see Practice notes:

When a retainer arises

The substantive scope of a lawyer’s duty to their client is usually determined by what is said in the retainer documents (see Engagement letter and terms of business), and the retainer itself is often casually spoken of as originating from the date on the retainer documents.

However, these documents are rarely put in place at the very outset of the relationship between the lawyer and a potential client. Often, there is a period of initial contact between lawyer and client, frequently with some exchange of information or discussion of funding, before either the lawyer or client have a sufficiently clear picture of if and how the legal matter will proceed to give formal instructions or put the written retainer documents in place. Where something goes wrong in the client’s matter during this initial period, disputes can arise about whether a lawyer-client retainer had come into being, notwithstanding the lack of documents.

It is therefore especially important to recognise the exact point in the relationship the retainer itself arises, and what duties the lawyer might owe to the client and when.

Express or implied retainer

In Miller v Irwin Mitchell LLP [2022] EWHC 2252 (Ch), the claimant argued that Irwin Mitchell had been in breach of their obligations to her in relation to a personal injury claim before an engagement letter was in place.She argued that an express retainer had already arisen between them but that, alternatively, one could be implied. The careful judgments in this case, both in the High Court and then the Court of Appeal are worth reading

Factual background

In May 2014, the claimant fell down some stairs on holiday and injured her leg. Days later, she called the defendant’s legal helpline after seeing a television advertisement. The claimant was given some limited advice and was referred to the defendant’s international travel litigation group (ITLG). The claimant was told she would receive a call back, which she later did. In fact, the ITLG repeatedly tried to contact the claimant and to obtain information and documents from her. However, the claimant was very slow in replying and Irwin Mitchell sent several letters saying no action had been taken on her case.

By the time the claimant provided enough information to Irwin Mitchell for them to send a letter of claim on her behalf, the underlying defendant had become insolvent. The underlying defendant had known of the accident but had failed to inform its insurers about it at the time, so the insurers were entitled to decline indemnity. The claimant’s case was that Irwin Mitchell should have told her to inform the underlying defendant of the potential claim, or done it themselves, so that the defendant in turn could inform their insurers (akin to a preliminary notification). The claimant said that Irwin Mitchell’s failure to do so was a breach of duty.

Express retainer

The claimant argued that an express retainer came into existence when she contacted the legal helpline. Her case was that the TV advert was an offer, which she accepted by telephoning the specified number. Further, the claimant said that she relied on Irwin Mitchell providing some advice, recording time, and referring to her internally as a “client”.

The court held that the TV advert was a mere invitation to treat and that her telephone call to the helpline could not be construed as an agreement for lawyers to act for her.

However, the key point was that Irwin Mitchell had informed the claimant that the case was being referred to the ITLG for further consideration. The ITLG may, or may not, have taken the case on under a conditional fee agreement. In addition, it was informative that there had been no agreement about certain key retainer issues, such as the amount of fees that would be charged. This aspect of the judgment was not appealed.

Implied retainer

In the alternative to an express retainer, the claimant argued that there was an implied retainer. The leading case on implied retainers is Dean v Allin & Watts [2001] EWCA Civ 758, which states that:

  • An implied retainer can only arise where, on an objective consideration of all the circumstances, an intention to enter into such a contractual relationship should fairly and properly be imputed to the parties.
  • A retainer should not be implied for convenience, but only where an objective consideration of all the circumstances make it so clear an implication that the lawyer themselves should have appreciated it.

The court in Miller considered whether the parties conduct was consistent only with a retainer coming into existence (Caliendo v Mishcon de Reya [2016] EWHC 150 (Ch)). However, the judge held that opening a file, billing time and referring to the claimant (internally) as a “client”, combined with the other facts, was all perfectly consistent with the claimant as merely a potential client. On that basis, the court found that no implied retainer arose. This point was appealed, but without much vigour, and the Court of Appeal had little difficulty dismissing it.

McDonnell v Dass Legal Solutions

In McDonnell v Dass Legal Solutions (MK) [2022] EWHC 991 (QB), the claimant unsuccessfully sought to argue that there was an implied retainer between himself and a firm of solicitors based on a conversation lasting just a few minutes. He had engaged the same solicitors to act for him on several previous high value land transactions, but had not formally engaged them to act for him on the transaction in question.

The claimant argued that there was a sufficiently clear course of dealing, such that the court could imply a retainer even where there was no express contract. In keeping with both prior authority on the point and judicial trends in this area, the court took a stringent view of the tests that any claimant would have to satisfy to show that a retainer had come into existence:

  • Where there is no express retainer, an implied retainer would only be found if the test for implication was met. That test is one of necessity.
  • A retainer would not be implied just because it was convenient to one of the parties.
  • The fact that there was no express retainer was powerful evidence in support of the argument that there was no implied retainer either.

Engagement letter and terms of business

Once underway, the relationship between a service provider and their client is usually governed by a contract or other documents put in place by the parties, which sets out what the service provider has agreed to do, and the amount that they will charge for it.

This contract usually takes the form of a terms of business (or terms and conditions), which is usually in a standard format for a particular firm or practice area, and a covering letter that is tailored to the particular client and matter, usually called an engagement letter, client care letter or letter of engagement (together, commonly called the retainer documents).

With some exceptions (for example, where bulk work is done for a large commercial client), these two documents form the basis of the lawyer-client contractual relationship. The meaning and effect of the express terms set out in these documents will be construed in accordance with the usual principles of contractual interpretation.

For a template terms of business and engagement letter that can be adapted to the firm’s requirements, see Standard documents:

Specifying the scope of work

Since in most cases the engagement letter will be the starting point for considering the scope of the lawyer’s duty in any one particular client matter, it is best practice to include a section specifying precisely what the lawyer will, and will not, do in some detail.

However, in practice, practitioners often state only a general overall purpose or aim in the engagement letter, and rarely specify every element of the work to be undertaken on a particular matter. For example, the letter may state simply “we will act for you in your purchase of the property” or “we will act for you in your divorce”. However, this lack of specificity may later give rise to a dispute as to whether the lawyer was obliged to carry out a particular step that was not expressly mentioned in the engagement letter.

In addition to stating a general purpose in the letter, some practitioners may list some of the headline tasks that will be included the service, for example, “conduct searches” and “report on title”. However, even then, any lack of precision or detail can lead to disputes over the failure to properly delineate the precise tasks involved in even the most standard transactions.

Risks of poorly specifying work

Whenever a contract is silent on a particular point, there is scope for argument. As such, stating only a general overall purpose in the engagement letter, or providing scant detail about what work will be included, creates uncertainty about who is responsible for carrying out detailed work or tasks that are not specifically mentioned.

For example, in a routine domestic conveyancing instruction, the engagement letter might state simply “we will act for you in your purchase”. However, this raises questions about whether, for example, the lawyer will be obliged to undertake searches that go beyond standard local authority enquiries or to explain their results, and whether is there any duty to go behind the results of those searches if some aspect of the search response causes concern.

In the face of such complex questions, it can be tempting to hope that if a letter of engagement requires a particular task to be done, and it is done, there will be no dispute that the lawyer has fulfilled their obligations to the client. Unfortunately, it is not always so simple.

For example, in Orientfield Holdings Ltd v Bird & Bird LLP [2017] EWCA Civ 348, the court found that, on receipt of unsatisfactory responses in the seller’s property information form, the purchaser’s solicitors had not initially had a duty to obtain a “Plansearch Plus” report. However, when they did obtain that report, the court found that the firm was then under a duty to explain the results of the search to their client.

For further information about specifying the scope of work, see the integrated drafting notes to Standard document, Law firm standard engagement letter: paragraph 1.

Other sources of a duty of care

As can be seen from the cases discussed, although the express terms set out in the retainer documents are an essential component, practitioners should be aware that the extent of the duty they owe to their client does not stand or fall entirely on the contents of these documents and can also change as the matter progresses.

A retainer may also arise where nothing has been written down.

Concurrent duty in tort

Where a lawyer is held to owe contractual obligations to their client, a concurrent or Henderson v Merrett Syndicates Ltd (No 1) [1995] 2 AC 145 tortious duty of care will also arise. This concurrent common law duty of care will usually come into being at the same time as any retainer (see When a retainer arises).

As a matter of principle, if the contract or retainer document governs the whole of the parties’ relationship, there should not be any more extensive duty owed as a result. However, if the contract governs only some aspects of the parties’ dealings, then there may be a tortious duty of care in the other mutual activities of the parties, even without any parallel contractual obligation.

For further information, see Practice note, Professional negligence: Professional negligence claims: contract or tort?

Duty to advise on reasonably incidental matters

In Minkin v Landsberg [2015] EWCA Civ 1152, the Court of Appeal recognised that lawyers would be unwilling to take on narrow tasks, for which the lawyer may be charging only a low fee, if they feared that they might be found to have assumed wider duties to the client than they had bargained for.

The court set out three propositions outlining the nature of a lawyer’s duty:

  • The lawyer’s contractual duty is to carry out the tasks which the client has instructed, and the lawyer has agreed, to do.
  • It is implicit that the lawyer will also offer advice which is reasonably incidental to the work they are instructed, and have agreed, to do.
  • What advice is “reasonably incidental” should be determined considering all the circumstances of the case, including the client’s character and experience level. For example, an experienced client will not want to pay for advice on things they already know, whereas an impecunious client will not want to pay for extra advice they cannot afford.

Although the case has been superseded by more recent decisions, the propositions in Minkin remain good law and form the starting point for considering whether a particular matter falls within or outside the scope of the lawyer’s duty.

Meaning of “reasonably incidental”

The retainer paperwork will usually give an indication of the sort of tasks that may or may not have been envisioned by the client and their lawyer at the point at which a retainer came into existence. However, a client who later alleges that their lawyer has failed to provide them some information, will almost inevitably claim that this fell clearly within the scope of the retainer, that the missing information was reasonably incidental to the tasks expressly included in the retainer itself, and therefore that the lawyer was under a clear duty to provide it. As a result, argument about what “reasonably incidental” really means has led to its own body of case law.

Leading cases

The starting point is the “rotten tooth” scenario described in Credit Lyonnais SA v Russell Jones & Walker [2002] EWHC 1310 (Ch). The proposition is that, if a dentist agrees to remove a rotten tooth from their patient’s mouth, but in doing so they notice that several other teeth are also rotten and will cause pain if not removed, they are under an obligation to advise accordingly. In the same way, where a lawyer becomes aware of a risk to the client while doing that for which they were retained, it is the lawyer’s duty to inform the client that there may be other problems which require attention.

In Spire Property Development LLP v Withers LLP [2022] EWCA Civ 970 the Court of Appeal repeated the statements of principle set out in Minkin and cited with approval the statement of Patten LJ in Lyons v Fox Williams LLP [2018] EWCA Civ 2347 that neither Credit Lyonnais nor Minkin were authorities for:

”the proposition that a solicitor is required to carry out investigative tasks in areas that he has not been asked to deal with, however beneficial to the client that might in fact have turned out to be”.

Additionally, a contractual obligation will not be implied just because that would be convenient to the party asserting the implication (see Implied retainer).

Spire clarifies what was set out in Denning v Greenhalgh Financial Services Ltd [2017] EWHC 143 (QB), where it was said that an extended duty arises only in “obvious” cases, and a “close and strong nexus” with the retainer is required. This mirrors the approach taken to the initial imposition of a duty of care in authorities as old and well known as Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465.

The most recent, and complete, assessment of the approach that the court will take can be found in Spire. Here, the court expanded on the three Minkin propositions (see Duty to advise on reasonably incidental matters) with wider guidance, as follows:

  • The court must beware of imposing duties which go beyond the scope of what the lawyer has been instructed, and has agreed, to do. The duty is directly related to the confines of the retainer.
  • In considering the circumstances of the case to determine what is reasonably incidental, the extent of the burden that the allegedly incidental work would place on the lawyer is relevant, and the court may have regard to the level of fees charged. While more burdensome duties might be imposed where the client is vulnerable or inexperienced, the court is generally less likely to find that very burdensome or costly steps were reasonably incidental.

(Carr LJ at paragraph 56.)

Spire raises the question whether the common law duty of care could extend to reasonably incidental matters in a case with no retainer at all, that is being considered in tort alone. However, this issue was not decided in the appeal.

Assumption of responsibility

Arguments about when a legal entity has assumed responsibility for another, and so the circumstances in which a duty of care may arise, have been pushing the boundaries of the law of tort in recent years.

Miller v Irwin Mitchell

The third limb of the argument in Miller v Irwin Mitchell [2024] EWCA Civ 53 arose in the event that there was found to be no contractual relationship at all. The claimant said that Irwin Mitchell, having engaged with her about the case and provided some advice, should have advised her of any steps it would be prudent to take to safeguard her position (notably, steps to inform the underlying defendant of the potential claim, and ask them to inform their insurers).

The claimant contended that the relationship between the parties gave rise to an “assumption of responsibility”, where a defendant should be treated as assuming responsibility based on proximity and the obvious impacts of any failure to warn. For the same reasons that the claimant had argued for an implied retainer (see Implied retainer), she contended there was such an assumption of responsibility. The court rejected the assumption of responsibility argument and this was the main point on appeal.

In the leading appeal judgment, Andrews LJ referred to the principles by which to ascertain whether there had been an assumption of responsibility, as summarised in Spire (Spire Property Development LLP v Withers LLP, Carr LJ at paragraphs 58 to 61). Further, in a detailed consideration of when a duty of care may arise, the Court of Appeal acknowledged that these arguments were always necessarily fact-specific. The court recognised that circumstances could arise in which a lawyer might have a duty to advise a prospective client to take an obligatory legal step to keep their claim alive, of which the lawyer is aware and the person seeking their advice may not be. Indeed, a situation could arise in which it would be at least strongly arguable that a lawyer became obliged to give advice about the limitation period to someone who rang a legal helpline of this type, even if the lawyer would not otherwise generally be required to give such advice (Miller, at paragraph 48). However, the court found that the claimant in Miller was not in such a situation (at paragraph 69).

In general, even where there is a formal contract between lawyer and client, a lawyer is not obliged to advise a client to take steps to safeguard against the risk of unenforceability of a judgment due to the insolvency or impecuniosity of the other party, unless the lawyer is specifically put on notice that they are in financial difficulties (see Pearson v Sanders Witherspoon [2000] PNLR 110). On that basis, the appeal in Miller was dismissed.

McClean v Thornhill

In McClean v Thornhill [2022] EWHC 457 (Ch), a tax barrister was sued by disgruntled users of a tax scheme that was determined by HMRC to amount to evasion. The case involved ten sample claims in which the claimants were wealthy individuals who had participated in various film finance schemes. Mr Thornhill, the defendant tax barrister, had provided various opinions on the tax consequences of the schemes to their promoters, who had shared them with prospective investors.

Each scheme was then promoted to potential investors via an information memorandum (IM). Mr Thornhill was not engaged to advise any of the claimants and none of the claimants were his clients. However, he consented to being named in the IM as a tax adviser to the promoters, and to the opinions being made available to investors if requested. His opinions had been requested by various potential investors and had been provided to them. The case therefore considered whether the barrister assumed any duty to those who saw and relied on his advice but were not his clients (and so there was no retainer).

The non-client investors attempted to establish that, although they had not instructed him, he owed them duties because he knew that they could call for the advice and were likely to rely on it.

In considering whether the barrister did owe any duty of care, Zacaroli J made clear that the foundation of liability in such circumstances was the concept of “assumption of responsibility”. A core feature of the case was that Mr Thornhill’s clients, the promoters, were on the opposite side of the transaction to each of the claimants as potential investors. The promoters were selling the schemes to the investors. In no sense was any investor a client of Mr Thornhill. In fact, the interests of the investors and the interests of Mr Thornhill’s clients were diametrically opposed, because the purpose of the opinion was to induce the investors to pay money into the promoters’ scheme and, in effect, purchase their services.

Mr Thornhill was fully aware that potential investors would see his opinions and would rely on them insofar as they would be reassured that investment into the schemes would be legal. There was no disclaimer. It was specialist legal advice being provided by an expert. These were all factors which militated in favour of the imposition of a duty.

However, the court found that there was no duty. Mr Thornhill had not advised any of the claimants directly, and all of them had been advised that they should obtain independent advice from a financial adviser before investing. In fact, the claimants were unable to invest unless they warranted that they had done so. As a result, the degree of reliance had not been made out and the claim failed.

Hedley Byrne

The decisions in both Miller and McClean demonstrate that the notion of assumption of responsibility brings up conceptually complex issues which arise with surprising frequency. However, the House of Lords’ decision in Hedley Byrne is still seen as the modern foundation for the “assumption of responsibility” approach to determining whether professional person A owes a tortious duty of care to person B.

Although the doctrine has often been thought of as a way in which a novel duty can be imposed on a party that has not signed up to accept any sort of express liability, it is a decision framed by curtailment of exposure. All five Law Lords recognised that it would be unacceptable to impose liability on third parties for all financial losses foreseeably suffered because of negligence. They saw the nature of the relationship between the parties, rather than the nature of the loss, as the principal mechanism for restricting such liability.

It is useful then to start with the test for the creation of an implied retainer (see Implied retainer). The courts have deemed that to be a rare occurrence and one that is only brought about by necessity. The Law Lords in Hedley Byrne emphasised the need for a special relationship to exist between the parties that allows the court to impute that the defendant has undertaken some responsibility to the client. Lord Devlin said that a duty to take care in respect of words arises when the relationship between the parties is contractual, fiduciary or “equivalent to contract” (that is, there would be a contract but for the lack of consideration).

In Playboy Club London Ltd v Banca Nazionale del Lavoro SpA [2018] UKSC 43, Lord Sumption identified the speech of Lord Devlin as setting out the foundational aspect of any assumption of responsibility and said:

”I shall therefore content myself with the proposition that wherever there is a relationship equivalent to contract, there is a duty of care. Such a relationship may be either general or particular. Examples of a general relationship are those of solicitor and client and of banker and customer …”.

The bar is therefore high, and allegations that there has been an assumption of responsibility should not be made lightly, nor allowed to pass without careful consideration. This was borne out in McClean.

Duties owed to third parties

In considering where and when a lawyer owes a duty of care to a third party, the courts take a narrow view where the argument relies on an assumption of responsibility (see Assumption of responsibility). However, this is not the only way in which such a duty may arise.

The Court of Appeal gave invaluable guidance in Ashraf v Lester Dominic [2023] EWCA Civ 4, stating that it was arguable that a duty was owed to a third party (in this case, the executors of Mr Ashraf’s estate) because the solicitor in question “was arguably not acting just for the benefit of the bank but for the benefit of all parties, and thereby stepping outside his role as solicitor for his client” (Ashraf, Nugee LJ at paragraph 84).

The court summarised the following three types of case where a duty to a third party may arise:

  • Where the third party is a disappointed beneficiary under a will that the lawyer was instructed to prepare (White v Jones [1995] 2 AC 207).
  • Where a lawyer makes representations on which another party reasonably relies and where the lawyer could reasonably foresee that reliance. As we have seen from the decision in McClean, this can be very difficult to prove. It is notable that Ashraf was not cited to the Court of Appeal in that case.
  • The Al-Kandari principle, where the lawyer steps out of their role in acting for one party and thereby takes on a duty to another, third party. This is rare, since professionals are usually loath to take on more, or different, responsibilities than those for which they have been expressly retained (and paid). However, Ashraf was just such a case and is therefore a useful reminder that thinking outside the box can be a vital exercise.

For information about excluding liability to third parties, see Practice note, Excluding or limiting liability for negligence: Excluding or limiting liability to third parties.

Disclaimers and limiting the scope of the retainer

Limiting scope of duty according to fee level

An argument that is sometimes put forward by lawyers in response to a negligence claim is that the claimant was paying only a very low fee for the service, so the work done was naturally limited accordingly and the claimant should not have expected more. Frequently, this argument is unsuccessful, not because the scope of work cannot be limited in this way, but because the point is only raised by the lawyer after the claim has emerged and is not supported by any written agreement with the client that the retainer would be limited.

In considering limiting the scope of work (and so the scope of duty) in this way, it is important not to confuse the scope of work a lawyer is required to carry out with the standard that work is expected to reach.

Even if the fee charged for a lawyer’s work is very low, the work that the lawyer agreed to do must be done to the standard required by the test in Bolam v Friern Hospital Management Committee [1957] 1 WLR 582. That is, that any reasonably competent member of the same profession would have acted in the same way. This remains the standard required, even if the work is done for no fee at all (see, Lejonvarn v Burgess [2020] EWCA Civ 114).

A lawyer must therefore be careful to delineate the remit of their instructions from the outset and, where a low fee or no fee is contemplated, ensure that they have properly considered the work that the client’s objective requires, and what work the lawyer is and is not prepared to do for the proposed fee.

It is perfectly permissible to limit the extent of the work to be done, if the client is made fully aware of that limitation at the outset. The simplest and most effective way to do this is to set it out thoroughly and clearly in the engagement letter, and to send this to the client as early in the relationship as possible.

A lawyer’s duty is limited to carrying out the tasks on which they have been instructed, and have agreed, to do. The court will be wary of imposing duties that go beyond the scope of any such written agreement between lawyer and client.

For information about limiting liability in the firm’s engagement letter, see Standard document, Law firm standard engagement letter: Drafting note: How we limit our liability to you.

Disclaimers

In McClean it would have been wise for Mr Thornhill to specifically disclaim liability on the face of his opinions, and he was criticised by the trial judge for having not taken this step. It is not clear that any disclaimer would have been effective, but it would have been prudent nonetheless.

In Lewis v Cunningtons Solicitors [2023] EWHC 822 (KB), a disappointed wife sued her solicitors claiming that they had been negligent in conducting her divorce proceedings such that she had lost her share of a pension. At the outset, the solicitors had presented the claimant with a range of options for instructing them, with different price points according to the level of work involved.

The claimant then agreed a settlement with her husband, and the solicitors responded by explaining that they would not (and could not) advise her on the fairness or otherwise of the settlement without having seen full financial disclosure and therefore, if she wished to accept the settlement, she would have to sign and return a disclaimer acknowledging this.

The claimant agreed the settlement, but before the consent order was lodged, financial disclosure was exchanged, showing that the settlement was (on the claimant’s case) obviously unfair. The claimant sued her solicitors for professional negligence.

The solicitor defended the claim on the basis that the scope of the retainer had been limited from the outset (relying on Minkin), or that the disclaimer had operated to limit the scope even after the general retainer had come into effect. The court disagreed. It distinguished Minkin because the settlement had been agreed after the inception of the general retainer, and not the other way around (the solicitors in Minkin had been instructed only to draw up the consent order after the agreement had been reached).

The court rejected the argument that the disclaimer operated to limit the scope, on the bases that it was non-specific and that the solicitors had had enough information to broadly advise on the proposed settlement before anything was disclaimed.

For further information about limiting liability by disclaimer, see Practice note, Excluding or limiting liability for negligence: Exclusion by disclaimer.

Distinction from breach of duty or scope of damages

Breach of duty

Scope of duty and breach of duty should not be conflated. Although it is tempting to look at the two issues together, they are substantively different questions and should be considered sequentially. Only once the scope of the duty owed by a lawyer has been established is it possible to decide whether they have breached that duty.

The scope of a lawyer’s duty should be assessed as a matter of objective construction. It does not depend on the approach taken by the lawyer concerned, or whether this was consistent with that of a reasonably competent solicitor. It is also not determined by any finding of actual reliance by the client (Spire, Carr LJ at paragraph 102).

Scope of damages

Manchester Building Society v Grant Thornton UK LLP [2021] UKSC 20 set out a “purpose test” examining what the purpose of the duty was, and what risk it was supposed to guard against. However, the Manchester test relates to recoverability of damages and does not address whether there is a duty in the first place (at paragraph 71). Practitioners should therefore be wary of placing reliance on the Manchester decision in considering the scope of the duty owed by a lawyer to a client, when what was being determined in that case was the scope of the damages recoverable as a consequence of breach of duty.

Approach of the courts

The courts are aware that any documents which purport to govern a professional relationship most often do not give the whole picture of the matrix of concurrent duties and obligations that a lawyer owes their client. However, although they will examine all of the circumstances of a case, the trend of the courts has been restrictive and it is rare that a contract will be implied, or that a lawyer will be found to have assumed responsibility for some aspect of work that has not been agreed.

This article was published in Practical Law. Download a PDF of the article here.

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