Carol Miller v Irwin Mitchell LLP

A legal helpline advertisement is ordinarily an invitation to seek assistance, not an offer creating an immediate retainer. A retainer is implied only where the parties’ conduct, objectively considered, is consistent only with the solicitor having agreed to act.

A prospective client does not acquire the equivalent tortious duty owed to a client merely because preliminary, generic advice is given, a file is opened, or the matter is referred internally. The fact that the prospective client later becomes a client does not retrospectively create that duty.

Once a contentious retainer exists, the scope of the duty depends on the circumstances, including the client’s experience. It may require consideration of whether the proposed defendant is worth pursuing and, when notifying the claim, a reminder to notify insurers.

Mrs Miller suffered serious injuries during a package holiday in Turkey. She contacted Irwin Mitchell’s legal helpline on 19 May 2014. The matter was referred to its international travel litigation team, which requested documents and pursued funding and merits information. A conditional fee agreement was signed on 25 January 2016.

Lowcost, the holiday provider, was not notified of the accident until a letter of claim was sent in February 2016. Its insurer declined indemnity because of late notification, and Lowcost subsequently entered administration. Mrs Miller claimed that Irwin Mitchell had owed her duties from 2014 to advise her to notify Lowcost or to notify it itself.

The preliminary issues concerned the existence and scope of any retainer or equivalent tortious duty, breach, the likely response of the insurance policy, and the effect of the annual aggregate excess.

1. Retainer. The advertisement was an invitation to treat. The telephone call on 19 May 2014 created no express retainer. The advice was limited, generic and preliminary, and the referral to the specialist team showed that acceptance of instructions remained under consideration. Internal file-opening, time recording and use of the term client did not alter that conclusion. The conditional fee agreement did not retrospectively impose duties which had not existed at the relevant time.
2. An implied retainer arises only where, on an objective consideration of all the circumstances, an intention to enter the contractual relationship ought fairly and properly to be imputed to the parties. The conduct must be consistent only with the solicitor having been retained. That threshold was not met before 25 January 2016. An implied retainer arose at the latest when Irwin Mitchell said it was ready to proceed and the parties completed the funding arrangements.
3. Tortious duty. The assumption-of-responsibility principle did not impose on Irwin Mitchell the equivalent of a solicitor’s duty to a client before the retainer. Mrs Miller was a prospective client who received limited preliminary advice. Her later becoming a client could not retrospectively create a duty. Crossan v Ward Bracewell & Co was distinguishable because it concerned positive advice on a defined task.
4. Scope and breach. Had a retainer or equivalent duty existed, the judge would have been inclined to hold that, particularly for an inexperienced client in a contentious claim, the solicitor should consider whether the proposed defendant was worth pursuing and should remind the client, when notifying the claim, to notify its insurer. That obligation arose no earlier than the point at which a letter of claim, or at the earliest a prior notification, could reasonably be sent. There was therefore no breach of duty.
5. Insurance. If Lowcost had been notified immediately after 19 May 2014, the policy would have responded, assessed at 100%. From 8 April 2015 onwards, the prospect of response was assessed at zero because of late notification and likely prejudice.
6. Excess. General Condition 4 required actual payment and exhaustion of the excess before HCC became liable. The clause was not rendered ineffective by section 1(3) of the Third Parties (Rights against Insurers) Act 1930. Section 9(5) and (6) of the Third Parties (Rights against Insurers) Act 2010 was not retrospective and did not affect the result. The parties were invited to agree consequential orders.

First-instance determination of preliminary issues in the High Court.