Wright v Lewis Silkin LLP

A solicitor retained to draft an international employment contract must advise on matters reasonably arising from the retainer, including jurisdiction where the contract is cross-border. A solicitor is not ordinarily required to propose unprecedented security arrangements for an employment payment, particularly where no evidence shows that such provisions are usual or workable. Choice of English law does not itself select the English courts as the forum. Where negligent advice causes the loss of a real or substantial chance of recovery, damages are assessed on the value of that chance.

The claimant retained the defendant solicitors to document his employment as chief executive of an Indian IPL franchise. The contract included a £10 million severance guarantee, a parent guarantee and an English governing-law clause, but no jurisdiction clause or provision for service in England.

The claimant later obtained judgment against the employing companies, but was unable to enforce it in India. He alleged that the defendant had negligently failed to advise on security, jurisdiction and service, and claimed the resulting enforcement losses and costs.

1. Duty and retainer. The solicitors were retained not merely to record agreed terms, but to advise on terms appropriate to a complex, cross-border employment agreement. The applicable standard was that of a reasonably competent specialist solicitor undertaking such work. The firm’s description as a leading practice did not create a higher standard.
2. Security. The failure to consider a UK bank guarantee or performance bond for the severance obligation was not a breach. Such security was unprecedented in employment contracts, no satisfactory evidence established that it was available or workable, and it could undermine the relationship of trust and confidence. In any event, the claimant would probably not have pursued the proposal and there was no real or substantial chance that it would have been accepted.
3. Jurisdiction. A solicitor dealing with an international contract should consider and advise on jurisdiction. The defendant failed to do so, or failed to explain the issue clearly enough to permit an informed choice. The claimant would have insisted on an exclusive English jurisdiction clause, and there was a high probability that it would have been accepted.
4. Service. The alleged failure to advise on or include a clause providing for service in England was not proved to be negligent. Such a provision was not shown to be usual in employment contracts, and the circumstances did not put the solicitor on notice of serious service difficulties.
5. Causation and loss. Applying Allied Maples Group Ltd v Simmons & Simmons, the claimant established a real or substantial chance that the judgment would have been satisfied if an exclusive jurisdiction clause had been included. The chance was nevertheless low, given the likely timing of judgment, the absence of direct evidence from the relevant successor decision-makers and the enforcement difficulties in India. Damages were assessed at 20% of £10 million, namely £2 million. A further sum for the lost chance of saving jurisdiction-related costs was to be agreed or determined.