Lyons v Fox Williams LLP

A solicitor’s duty to warn a client about a legal risk is confined by the agreed retainer. It extends to advice reasonably incidental to the work undertaken and to risks which become apparent while that work is being performed. It does not require investigation, policy review or legal research into a separate area merely because that work might benefit the client. An expanded retainer for related negotiations does not automatically include substantive advice on separate insurance claims or their limitation periods. The duty is not triggered where those claims remain handled by others and no relevant risk becomes apparent in the retained work. The claimant must also prove that any warning would have been accepted and acted upon.

The claimant suffered serious injuries in a motorcycle accident and held accidental death and dismemberment and long-term disability insurance. He retained the defendant solicitors in relation to the former cover. The retainer later expanded to include negotiations concerning the termination of his employment, during which the long-term disability claims were discussed as part of his negotiating strategy.

Turner J dismissed the negligence claim in [2016] EWHC 2427 (QB). He found that the defendant had not been retained to advise on the long-term disability claims and had not acquired a duty to warn about them. Permission to appeal was granted only on the duty-to-warn issue. The central question was whether the retainer for related work nevertheless required advice or a warning concerning the separate insurance claims and their limitation periods.

Lord Justice Patten gave the judgment, with which Lord Justice David Richards and Lady Justice Asplin agreed. The appeal was dismissed.

1. The scope of a solicitor’s duty is determined by the agreed retainer and the tasks undertaken. A solicitor must provide advice reasonably incidental to that work, having regard to all the circumstances, including the client’s character and experience. The solicitor must also identify risks which become apparent while carrying out the retained tasks. The principles stated in Credit Lyonnais SA v Russell Jones & Walker [2002] EWHC 1310 and Minkin v Landsberg [2015] EWCA Civ 1152 did not impose a general obligation to investigate matters outside the retainer.
2. Advice on the claimant’s rights under the long-term disability policies and the relevant time limits would have required a thorough examination of the policies and legal research. The judge had found that the defendant was never retained to perform that work, and permission to challenge that finding had been refused. The alleged duty to give the advice was therefore co-extensive with the alleged substantive retainer and failed with it.
3. The later retainer concerning the severance negotiations did not alter the position. The long-term disability claims remained separate claims against insurers, were being handled by Ernst and Young, and were not postponed to an indefinite future date. Advising that the claims should not be included in the particular letter dealing with the accidental death and dismemberment claim did not trigger a duty to warn that separate legal advice was required.
4. The alternative case also failed on causation. The judge found that the claimant would not have accepted or paid for advice from the defendant about the long-term disability claims. He also did not renew claims which remained in time after the severance agreement. No liability was established. The court made no order on the defendant’s application for permission to cross-appeal on quantum.

1. Court of Appeal (Civil Division): In [2018] EWCA Civ 2347, the appeal was dismissed. No order was made on the application for permission to cross-appeal on quantum.
2. High Court of Justice, Queen’s Bench Division: Turner J dismissed the negligence claim in [2016] EWHC 2427 (QB), finding that the defendant had not been retained to advise on the long-term disability claims and owed no relevant duty to warn.