Regent Leisuretime Ltd. v Amos

A solicitor’s duty is defined by the scope of the retainer. There is no general retainer requiring a solicitor to examine every aspect of a client’s affairs whenever consulted.

A reasonably competent solicitor may rely on properly instructed specialist counsel, particularly where counsel knows the history and has been asked broadly to advise on recovery. The solicitor must nevertheless exercise independent judgment and must not accept advice that is obviously wrong or inconsistent with material advice already given. No negligence is established where there was no reason to suspect an unaddressed limitation problem or to require counsel to revisit a course which experienced counsel had not proposed.

The company and its two director-shareholders brought a solicitor’s negligence claim against Mr Pearson after their attempt to recover fraud damages from a bank failed to secure recovery for loss reflected in the value of their shares.

Following a successful appeal which established fraudulent misrepresentation, Mr Pearson retained experienced Chancery counsel to advise on damages. The company was later restored to the register and its separate claim against the bank was struck out as time-barred; its appeal was dismissed in [2003] EWCA Civ 391.

Simon J dismissed the negligence claim after a liability-only trial. The appellants contended that Mr Pearson owed the company a duty and, after the successful fraud appeal, should have ensured that the company joined the proceedings or sued in its own name.

1. Appeal dismissed. Sir Peter Gibson, with whom Maurice Kay and Buxton LJJ agreed, upheld Simon J’s dismissal of the claim against Mr Pearson.

2. The scope of a solicitor’s duty depends on the retainer and the client for whom the solicitor was retained. There is no general retainer requiring a solicitor to consider all aspects of a client’s interests. Applying the principle stated by Oliver J in Midland Bank Trust Co Ltd v Hett, Stubbs & Kemp [1979] Ch 384, the finding that Mr Pearson was retained only by Mr Amos and Mr Barton, and not by the company, was a factual finding amply supported by the evidence. He therefore owed no duty to the company.

3. A solicitor must exercise the reasonable care and skill of a competent and reasonably experienced solicitor. Although instructing counsel does not itself absolve a solicitor from responsibility, it was reasonable here to rely on specialist counsel. Counsel had long experience of the case, had previously advised on the obstacle to a shareholder claim, had drafted the counterclaim, and had expressly warned of the difficulty after the successful appeal. Mr Pearson’s instructions were sufficiently broad to require advice on the available means of recovering damages.

4. There was no obvious error, material inconsistency in counsel’s advice, or information alerting Mr Pearson that a limitation period affecting a company claim required separate attention. The company had effectively been left out of the contemplated litigation, and the clients’ information had reinforced that impression. Mr Pearson was not required, of his own motion, to reopen the question whether the company should be joined when experienced counsel had not proposed it.

5. Hindsight might suggest that matters could have been handled differently, but it did not establish a breach of duty. The court therefore found no negligence by Mr Pearson.

• Court of Appeal (Civil Division) — dismissed the appellants’ appeal: [2006] EWCA Civ 1184.
• Plymouth District Registry (Simon J) — on 13 July 2005 dismissed the claim against Mr Pearson after a liability-only trial in the solicitor’s negligence action.