Queen Elizabeth's School Blackburn Ltd & Ors v Banks Wilson Solicitors (A Firm)

A solicitor advising on the meaning of a contractual restriction must warn a lay client of a material risk that a court may adopt a different construction. This duty may arise even where the solicitor's preferred construction is defensible and competently reached.

The obligation depends on the circumstances. It is particularly important where the solicitor knows that a dispute and possible litigation are emerging. Advice expressed with confidence must still contain an appropriate caveat where the competing construction has sufficient substance to create real scope for dispute.

A school brought a professional negligence claim against the solicitors who had drafted a restrictive covenant affecting its development land. When the adjoining owner challenged the proposed building's height, the responsible solicitor advised that the covenant permitted construction up to the existing chimney-pot height. The school later altered the roof to avoid a possible breach.

His Honour Judge Behrens dismissed the claim on liability. He held that the solicitor's construction was correct and that the October 1994 advice was not negligent. He nevertheless found that, if warned of a significant risk, the school would have redesigned the roof at relatively small cost.

The appeal concerned whether the covenant presented real scope for dispute and, consequently, whether the solicitor should have warned the school about the competing construction and litigation risk.

1. Appeal allowed unanimously. Arden LJ delivered the leading judgment. Sedley LJ agreed, and Aldous LJ agreed with both judgments. The judge's order was set aside and the matter was remitted to the Chancery Division for damages to be assessed.

2. The court was not required to determine the covenant's true meaning. The relevant question was whether there was real scope for dispute. There was such scope. A restriction of this kind protected the covenantee, who could reasonably be concerned with the volume and roofline of the proposed building rather than isolated features such as chimneys, a clock tower or a spire. A court might therefore construe “building” more narrowly than the solicitor had advised.

3. The solicitor knew that the adjoining owner had objected at the site and that litigation was potentially threatened. The trial judge's contrary factual finding was inconsistent with the evidence and the solicitor's admissions in cross-examination.

4. Per Arden LJ, a solicitor may have to urge caution and identify risks to a lay client even where those risks might be obvious to another lawyer. The extent of the obligation depends on the particular facts. Here, the arguments supporting the competing construction were sufficiently significant that the solicitor had to warn the school of the risk.

5. Per Sedley LJ, even if the solicitor's interpretation was entirely defensible and one which a competent solicitor could reach, it was not sufficiently certain to remove the need for a caveat that a court might construe the covenant differently. A solicitor must seek to combine confident advice on which a client can act with suitable caution about the risks of acting upon it.

6. The finding on causation was unchallenged: properly warned in October 1994, the school would have lowered the roof then at relatively small cost. The defendant was ordered to pay the claimants' appeal costs, assessed at £8,500. The costs below were reserved to the judge assessing damages.

1. Court of Appeal (Civil Division): The appeal was allowed unanimously. The liability order was set aside and the matter was remitted to the Chancery Division for damages to be assessed.
2. High Court, Chancery Division, Manchester District Registry: On 10 October 2000, His Honour Judge Behrens, sitting as a deputy High Court judge, found no professional negligence and dismissed the action.