Williams & Anor v HCB Solicitors Ltd

Summary judgment is inappropriate where a professional-negligence claim raises a genuinely arguable question about the solicitor’s scope of duty, causation or remoteness. It is not enough to say that the loss followed another party’s apparently weak contractual point. The court must consider how clear the point was and whether the alleged loss may legally have resulted from the negligence. Controversial issues concerning scope of duty, novus actus and reasonable contemplation generally require the full factual background and should ordinarily be determined at trial.

The claimants instructed the respondent solicitors in connection with the sale of shares, the transfer of intellectual-property rights and a licence concerning those rights. After the purchaser disputed the effectiveness of the transfer and withheld payments, a prospective commercial arrangement was lost. The claimants alleged that defective drafting caused that loss and claimed professional-negligence damages.

The High Court granted summary judgment under CPR 24.2(a)(i), holding that the drafting had effectively transferred the rights and that the loss of the commercial opportunity could not, as a matter of law, have been caused by any breach of duty. The appeal concerned whether that conclusion was suitable for summary determination.

1. Appeal allowed. The summary-judgment order was set aside, and the claims, including the claim concerning Firstmain’s failure to pay, were allowed to proceed to trial.
2. The court accepted that the solicitors had a strong case, and that the alleged chain of events was arguable in a factual or but-for sense. However, the judge below gave no adequate reason for concluding that the loss could not in law have been caused by a breach of duty.
3. It was arguable that the solicitors’ drafting caused the dispute about ownership of the rights and that the dispute caused the prospective business counterparty to withdraw. The alleged contractual point was not plainly bad until a judge had ruled on it. A solicitor’s duty includes protecting the client against unnecessary risks of litigation, and the possible recovery of litigation-related costs showed that the scope of duty could extend to consequences of that kind.
4. The court considered, but did not decide, whether the claim might fail because the loss was outside the reasonable contemplation of the parties under Hadley v Baxendale or because Firstmain’s conduct was a novus actus on the principles discussed in Borealis AB v Geogas Trading SA. The necessary factual background was not available for those issues to be resolved summarily.
5. Controversial issues concerning scope of duty should, in principle, be decided at trial once the full facts are known. The court declined to uphold summary judgment on reasons not given by the judge below.

• Court of Appeal (Civil Division) [2017] EWCA Civ 38: appeal allowed; the High Court’s summary-judgment order was set aside and the claims were allowed to proceed to trial.
• High Court of Justice, Queen’s Bench Division, Birmingham District Registry: HHJ McKenna granted summary judgment for HCB Solicitors Ltd under CPR 24.2(a)(i), holding that the alleged drafting defect could not legally have caused the loss of the TKM opportunity.