McFarland-Cruickshanks v England Kerr Hands Solicitors Ltd

On an application to strike out or obtain summary judgment, the court may decide a short point of law or construction where it has the necessary evidence and the parties have had a fair opportunity to address it. It should hesitate where the issue is fact-sensitive or the law is genuinely developing.

Where a barrister is instructed by a solicitor to provide services for the benefit of a lay client, standard terms stating that the barrister will exercise reasonable skill and care do not, without more, impose a concurrent duty to protect the solicitor’s own financial interests. Liability-limitation clauses may recognise potential liability, but do not create the underlying duty. Nor will the court ordinarily impose an equivalent common-law duty where the parties have made a commercial contract which could have provided for it.

The claimant, a barrister, claimed unpaid fees from the defendant solicitors’ firm for work undertaken in patent proceedings. The defendant relied on an alleged fee cap and brought a counterclaim alleging that negligent advice had caused it to lose fees which might otherwise have been recovered from its lay client.

The claimant applied to strike out the defence and counterclaim or obtain summary judgment. The issues were whether the fee cap defeated the claim, whether breach of the cap discharged the defendant from paying fees already earned, and whether the claimant owed the defendant a contractual or common-law duty to avoid causing it financial loss.

1. Disposition. The claimant obtained summary judgment for the capped sum of £30,245, together with any interest due. The counterclaim for breach of contract and negligence was struck out. The indemnity claim concerning a possible future claim by the lay client was also struck out.
2. Procedure. The court applied CPR r 3.4(2)(a) and the summary-judgment principles in EasyAir Limited v Opal Telecom Limited [2009] EWHC 339 (Ch). A mini-trial must be avoided, but the court should decide a short legal or construction point where the evidence is sufficient and no further factual investigation could realistically affect the result. The caution in Barrett v London Borough of Enfield [2001] 2 AC 550 did not prevent determination of these issues.
3. Fee cap. The email referring to counsel’s cumulative fees for the matter was sufficiently plausibly capable of covering the whole case to defeat summary judgment on the construction issue. The claimant was therefore limited to the principal sum within the cap. However, alleging fees above the cap was not a total failure of consideration or a substantial failure entitling the defendant to refuse payment for work already received or recover sums already paid.
4. Contractual duty. Construed in context, clause 4.1 of the model terms provided that the services were supplied to the solicitor acting for the benefit of the lay client. The services were not supplied for the solicitor’s own benefit. Clause 3.2 therefore did not impose a duty to exercise reasonable skill and care so as to prevent the solicitor’s financial loss. Clauses 12 and 20.3 recognised potential liabilities but did not create the alleged duty. A different allocation could have been agreed in writing.
5. Common-law duty. The alleged duty was novel. The contractual allocation of benefit and the parties’ freedom to bargain meant that there was no reason to impose an equivalent duty in tort. The proposed duty was also inconsistent with the contractual relationship and risked conflicts between the solicitor’s financial interests and the lay client’s interests. The authorities relied upon concerning professional duties to other persons were materially different.