Shepherd Construction Ltd v Pinsent Masons LLP

A solicitor’s functions and responsibilities are primarily determined by the relevant retainer. A long-standing professional relationship, repeated specific commissions and continuity of personnel do not, without more, imply a general and continuing retainer requiring review of all earlier advice or drafting. Such an obligation may arise from a specific later commission, or where the solicitor actually knows that earlier advice has become deficient, but its scope remains fact-sensitive. A proposed overarching retainer of indefinite duration, with uncertain activation and remuneration, is unlikely to be implied.

Shepherd Construction Ltd claimed damages from Pinsent Masons LLP for alleged professional negligence concerning advice and drafting relating to construction sub-contracts. It alleged that its long relationship with Masons, Pinsent Masons and PMLLP created successive “Single Contracts” or general retainers requiring the firms to review earlier advice in light of legislative developments.

The application concerned whether those allegations should be struck out or permission to amend should be refused. The court also considered the alternative claims based on specific commissions.

1. Application allowed in part. The allegations founded on the alleged Single Contracts were struck out, or permission to amend was refused, because they had no realistic prospect of success. The claims based on multiple individual contracts were not challenged for strike-out purposes.
2. A solicitor’s functions and responsibilities are primarily determined by the retainer. The fact that work was commissioned informally, that there were numerous specific commissions, that similar personnel acted over many years, and that the firms provided briefings or sought further work did not support an implication of an overarching general retainer.
3. A specific commission may carry a responsibility to revisit related earlier advice. For example, where a solicitor reviewing one standard form knows, or ought to know, that another standard form currently used by the client lacks a corresponding provision, the duty on the later commission may extend to warning the client. This is a matter of fact and degree.
4. Different considerations may arise where the solicitor actually becomes aware that earlier advice has become redundant or commercially problematic. Any such responsibility would remain subject to the terms of the retainer, causation and possible temporal limits.
5. The alleged Single Contract was in substance a general and continuing retainer requiring review of all previous advice and drafting. Its uncertain duration, activation, continuity after changes in personnel or firms, and remuneration illustrated why it was not necessary or realistic to imply it merely from a long-standing commercial relationship.
6. The advice sent by Mr Job after the Court of Appeal’s decision in the Hare case could not establish causation in respect of sub-contracts already entered into. It did, however, illustrate that an adviser who actually becomes aware of a problem with earlier advice may have an obligation to communicate it.