SEAN MCDONNELL v Dass Legal Solutions (MK) Law Limited T/A DLS Law

A solicitor’s retainer is not readily implied merely because the solicitor has previously acted for the person concerned or communicates with them during a transaction. The question is whether, viewed objectively, the parties’ conduct was consistent only with a solicitor-client relationship for the relevant work. Necessity, rather than convenience, is required.

Where solicitors act for one party, an assumption of responsibility to another person with potentially divergent interests is ordinarily improbable. It requires circumstances making reliance reasonable and making it reasonably foreseeable that the other person would rely on the solicitors. The scope of any solicitor’s duty is also fact-sensitive and depends on what advice is reasonably incidental to the work undertaken, including the client’s experience.

The claimant sought damages of approximately £2.5 million from the defendant solicitors’ firm. He alleged that the firm had been instructed in January or February 2017 to prepare a trust deed or otherwise protect his alleged 70% beneficial interest in land acquired through Arc Holdings and Investments Ltd.

The firm acted for Arc, whose sole director and legal shareholder was the claimant’s associate. The claimant contended that the firm owed him contractual or tortious duties and that its failure to protect his interest enabled the land to be transferred to a third party after the relationship between him and the associate broke down.

The central issues were whether there was an express or implied retainer, whether the firm assumed a tortious responsibility to the claimant, and whether any breach caused recoverable loss.

1. Express retainer. The claimant failed to prove that he instructed the defendant firm to prepare a trust deed or protect his personal interest in Arc. The contemporaneous documents and the evidence of the solicitors showed that Arc was the client and that instructions were to come from its director. The letters of 14 February 2017 recorded the parties’ intended share proportions but were not instructions to the firm to undertake further work.
2. Implied retainer. The court applied the necessity test. An implied retainer requires conduct which, objectively considered, is consistent only with the solicitor-client relationship alleged. It is not implied for convenience. The claimant’s previous dealings with the firm, and one solicitor’s view that he was a client in the transaction, did not overcome the absence of a client-care letter or other objective indication that the firm had undertaken to protect his separate interests. The claimant was experienced in corporate and commercial matters and had previously chosen whether to instruct the firm personally or through a company.
3. Tortious duty. The firm did not assume responsibility to the claimant. Where solicitors act for a company, and the alleged advice would benefit an individual shareholder but not the company, an assumption of responsibility to that individual is ordinarily improbable. The claimant could not establish both reasonable reliance and reasonable foreseeability of such reliance in the circumstances.
4. Scope of duty. Even if a retainer had existed, the alleged advice was not reasonably incidental to the work undertaken. The risks identified by the claimant were ones of which this experienced businessman was already aware, and they were not risks which the solicitors should reasonably have thought eluded him.
5. Causation and damages. In any event, a trust deed would not have prevented the sale. The claimant already possessed signed share-transfer forms and could have sought an injunction using the available letters and evidence. It was also more likely that he would have pursued an onward sale than retained and developed the land. The claim therefore failed, and the alternative damages case was rejected.