McClean and others v Thornhill KC [2023] EWCA Civ 466 concerned whether ten investors (drawn from a total of 100) were owed a duty of care by Andrew Thornhill KC, head of Pump Court Tax Chambers at the time. Thornhill advised the promoters, Scotts, on the setting up of the finance schemes as three limited liability partnerships, and on the tax consequences of the schemes. He did this in a series of opinions and consented to being identified by Scotts as their tax adviser, with a copy of his opinions being provided to investors on request. However, he was not engaged by and did not advise the investors.
The investors claimed Thornhill owed them a duty of care which he breached by negligently advising on the tax implications and benefits for investors, approving statements about those in the information memorandum (IM), and by expressly agreeing to be named in the IM as having provided advice. They argued he should have declined to endorse the schemes and warned of the significant risk the schemes would be challenged. Had he done so, the investors would not have invested.
Dismissing the appeal, Lady Justice Simler highlighted the importance of the terms of the IM, which advised potential investors to consult their own tax advisers.
Simler LJ said: ‘As the judge correctly held, it was not reasonable for investors, in light of the terms of the IM, subscription agreement and checklist and given the factual circumstances and context, to rely on Mr Thornhill's advice and opinions without independent inquiry, and it was not reasonably foreseeable by Mr Thornhill that they would do so. Accordingly, Mr Thornhill owed no duty of care.’
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