Limiting Solicitor's Duty of Care in Informal Advice: Spire v Withers [2022] EWCA Civ 970

Introduction

The case of Spire Property Development LLP & Anor v Withers LLP ([2022] EWCA Civ 970) centers on allegations of professional negligence against the law firm Withers LLP. Spire Property Development LLP ("Spire") and Hortensia Property Development LLP ("Hortensia") ("the Developers") claimed that Withers failed in their duty of care during the acquisition and subsequent development of two high-value Grade II listed properties in Fulham, London. The core issues revolved around the discovery and advisement concerning the presence of extra-high voltage electric cables ("HVCs") owned by UK Power Networks ("UKPN") beneath the Properties.

Summary of the Judgment

After a trial lasting nine days, HHJ Pelling QC ruled in favor of the Developers, awarding damages for both the 2012 claim (failure to identify HVCs during pre-purchase searches) and the 2014 claim (failure to advise on rights and remedies upon discovering the HVCs). Withers appealed the decision, specifically contesting the finding that they owed a tortious duty of care to advise the Developers on their rights against UKPN. The England and Wales Court of Appeal ultimately allowed the appeal, overturning the lower court's decision. The Court of Appeal concluded that Withers did not assume the broader duty of care as alleged, particularly concerning advice on the Developers' potential remedies against UKPN.

Analysis

Precedents Cited

The judgment extensively referenced key legal precedents related to professional negligence and duty of care, including:

• White v Jones [1995] 2 AC 207: Established that solicitors owe a duty of care to ensure that critical legal documents are correctly prepared and delivered.
• Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465: Introduced the principle that a duty of care can arise from a negligent misstatement causing financial loss.
• Bolam v Friern Hospital Management Committee [1957] 1 WLR 582: Defined the standard of care expected from professionals, emphasizing that it aligns with what is expected of a reasonably competent practitioner.
• Manchester Building Society v Grant Thornton UK LLP [2021] UKSC 20 and Khan v Meadows [2021] UKSC 21: These cases reinforced the scope of a professional's duty of care based on the purpose for which advice is sought.

These precedents collectively shaped the Court's understanding of the solicitor's responsibilities, especially regarding the assumption of duty in non-contractual contexts.

Legal Reasoning

The Court of Appeal focused on whether Withers LLP had objectively assumed a duty of care to advise the Developers on their rights against UKPN. Central to this was the examination of email communications between Withers and the Developers:

• Assumption of Responsibility: The court assessed whether Withers, through its responses, had implicitly taken on a broader advisory role beyond merely answering specific queries.
• Scope of Duty: It was determined that the solicitor's duty did not extend to comprehensive advice on potential remedies against UKPN unless explicitly requested.
• Contextual Understanding: Considering the sophisticated nature of the Developers and the ongoing professional relationships, the court found that Withers' responses were appropriately limited to the questions posed, without assuming additional responsibilities.

The Court emphasized an objective standard in determining the scope of assumed duty, focusing on the content and context of the interactions rather than subjective interpretations.

Impact

This judgment has significant implications for the legal profession, particularly concerning unsolicited or informal advice:

• Clarification of Duty: Solicitors must clearly define the scope of their advisory roles, especially in non-retainer or informal settings.
• Risk Management: Law firms may need to adopt more stringent measures in communications to avoid inadvertently assuming broader responsibilities.
• Client Expectations: Clients and third parties should be explicit in their requests for legal advice to ensure clarity in the scope of received counsel.

The decision underscores the importance of clear boundaries in solicitor-client interactions, particularly outside formal engagement agreements.

Complex Concepts Simplified

Duty of Care

In legal terms, a duty of care refers to a professional's obligation to adhere to a standard of reasonable care while performing any acts that could foreseeably harm others. For solicitors, this means providing competent and accurate advice within the scope of their engagement.

Assumption of Responsibility

This concept determines whether a professional has voluntarily taken on a duty to provide care or advice. It is assessed objectively, based on the nature of the interactions and the professional's intent as perceived by an objective observer.

Wayleaves

A wayleave is a permission granted by a landowner to a utility company to install and maintain infrastructure, such as electric cables, on their property. Understanding the nature and terms of wayleaves is crucial in property development and management.

Voluntary vs. Statutory Wayleaves

- Voluntary Wayleaves: These are agreements made directly between the landowner and the utility company. They are personal rights and generally do not transfer to subsequent owners of the land.
- Statutory Wayleaves: Granted by a governmental authority, these allow utility companies to install infrastructure without direct negotiation with the landowner. They typically have a fixed term and can bind subsequent landowners.

Conclusion

The Court of Appeal's decision in Spire Property Development LLP & Anor v Withers LLP serves as a pivotal clarification on the limitations of a solicitor's duty of care, especially in informal advisory contexts. By emphasizing an objective standard in assessing the assumption of responsibility, the judgment delineates clear boundaries for legal professionals, ensuring that unsolicited or casual advice does not inadvertently expand their legal liabilities. This case underscores the necessity for solicitors to maintain clear communication and defined roles in all professional interactions, safeguarding both their interests and those of their clients.