Solicitors were sued for failing to advise their client fully as to the wisdom of the transaction he was entering into. The client was an experienced businessman.
Held: The claim failed.
Hobhouse LJ said: ‘Once Mr Reeves was told what the legal position was, he required no further advice from Mr Sheppard in order to evaluate its implications and commercial significance. Mr Reeves was an experienced businessman and under no disability.’
Simon Brown LJ said: ‘I cannot accept that Mr Sheppard was under any further duty to his client, any duty to advise him upon the commercial implications or importance of the access provision or to warn him against the risks that it might pose for the future development, operation or sale of the hotel. These matters are well within the client’s competence to appreciate and evaluate for himself, business considerations rather than legal ones.’
Sir Thomas Bingham MR, dissenting, said: ‘It will always be relevant to consider what the solicitor is asked to do, the nature of the transaction and the standing and experience of the client. Thus on the facts here Mr Sheppard was not retained to advise on the wisdom of offering the price Mr Reeves had informally agreed to pay . . But it was in my view Mr Sheppard’s duty to draw Mr Reeves’ attention to any pitfall, particularly any hidden pitfall, the contract might contain.’
Judges:
Sir Thomas Bingham MR, Simon Brown LJ, Hobhouse LJ
Citations:
[1996] PNLR 265
Jurisdiction:
England and Wales
Cited by:
Cited – Pickersgill and Another v Riley PC 25-Feb-2004
PC (Jersey) The solicitor appealed a finding of negligence. He had failed to advise his client when he acted as a guarantor for a proposed assignee of a lease that the company may be a shell company. It had been . .
Cited – The Football League Ltd v Edge Ellison (A Firm) ChD 23-Jun-2006
The claimants operated football leagues, and asked the defendant solicitors to act in negotiating the sale of television rights to ONdigital. The broadcasts went ahead, but no guarantees were taken for the contract. The claimants alleged . .
Lists of cited by and citing cases may be incomplete.
Legal Professions, Professional Negligence
Updated: 03 July 2022; Ref: scu.194090
