No duty to warn

A solicitor does not have a duty to warn a client about risks unconnected with issues with the retainer, the Court of Appeal has unanimously held.

Lyons v Fox Williams [2018] EWCA Civ 2347 concerned a negligence claim brought by Cathal Lyons, a former Ernst & Young (EY) employee earning US$700,000 per year, who suffered serious injuries while riding his motorcycle through the streets of Moscow.

Lyons was covered both by EY’s accidental death & dismemberment (AD&D) and its long-term disability (LTD) group insurance, and sought legal advice from Fox Williams in 2007 in respect of his AD&D claims. The retainer was expanded in 2009 to include advice on the terms of a severance agreement with Lyons’ employers, EY.

The LTD claims became time-barred in 2010. Lyons sued Fox Williams for alleged negligence in failing to advise on these claims, which were worth more than US$6m.

However, the judge found that Fox Williams had not been instructed to advise on the LTD claims therefore there was no duty on its part to warn him about the time limits. Lyons’ evidence that emails and conversations included the LTD claims was rejected.

On appeal, Lyons argued that the LTD policies were so closely linked with the subject of the retainer that Fox Williams should have volunteered advice about the time limits.

Dismissing Lyons’ appeal, Lord Justice Patten said: ‘The solicitor’s obligation to bring to the client’s attention risks which become apparent to the solicitor when performing his retainer does not involve the solicitor in doing extra work or in operating outside the scope of his retainer.’ While ‘cases like Minkin [Minkin v Landsberg [2015] EWCA Civ 1152] are often cited as authority in support of a legal duty to warn, they are in fact decisions about the scope of a solicitor's duty based on a particular retainer,’ he said.

DAC Beachcroft partner Phil Murrin, who acted for Fox Williams, said: ‘It is not uncommon for claimants to argue liability based upon undischarged duties to warn, and solicitors and their professional indemnity insurers should welcome an appellate case where such attempts have failed.’