Neutral Citation Number: [2012] EWHC 43 (TCC)

Case No: HT-11-188

IN THE HIGH COURT OF JUSTICE

QUEEN'S BENCH DIVISION TECHNOLOGY AND CONSTRUCTION COURT

Royal Courts of Justice

Strand, London, WC2A 2LL

Date: 19 ^th January 2012

Before :

MR JUSTICE AKENHEAD

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Between:

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Paul Darling QC and Simon Hughes QC (instructed by Nabarro LLP ) for the Claimant

Roger Stewart QC (instructed by Beale & Company Solicitors LLP ) for the Defendant

Hearing date: 13 January 2012

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JUDGMENT

Mr Justice Akenhead:

1. In these and later related proceedings, Shepherd Construction Ltd (“Shepherd”) seeks substantial damages from its solicitors Pinsent Masons LLP (“PMLLP”) and previous predecessor firms, Masons and Pinsent Masons, for alleged professional negligence relating to advice given or not given concerning various standard forms of contract which Shepherd was proposing to use. PMLLP seeks to strike out or challenge allegations made in a proposed draft Amended Particulars of Claim that there was a "Single Contract" between Shepherd and the various solicitor partnerships with which it had dealings since 1994 and pursuant to which it is said that the various solicitors should from time to time have reviewed and revised advice and draft sub-contract terms provided by them in 1998.

The Background

2. Masons was from the early 1970s a well known firm of solicitors who specialised in construction law. By the early 1990s, the firm had substantially expanded and had offices around the country and indeed abroad. Pinsent & Co was originally a substantial Birmingham law firm which expanded rapidly in the 1990s by way of amalgamation with other firms. In 2004, Masons and Pinsent amalgamated and a new firm, Pinsent Masons, was formed. As from March 2008, this partnership became a limited liability partnership, PMLLP.

3. The facts which follow are based on the proposed draft Amended Particulars of Claim and the evidence which has been submitted by the parties for purposes of this application. They are not intended to be binding on the final trial judge.

4. Shepherd is and was a national building contractor based in North Yorkshire. Masons opened their Manchester office in about 1989 and Shepherd was invited to various promotional seminars at the Manchester office. Masons was instructed by Shepherd on a substantial project at Exchange Quay, Manchester, initially to advise later on a substantial dispute arising out of it, between about 1989 and 1992. In about 1994, Masons was retained by Shepherd to advise on issues arising on a substantial construction project at Farnborough in Hampshire, with partners from the Manchester office attending monthly meetings to provide such advice. From about this time. Shepherd first began to be advised by non-contentious lawyers from the Manchester office, in particular by Mr Job and Mr Baker; this advice included advice about and drafting of contractual terms.

5. In mid-1998, Shepherd instructed Masons to advise on the draft contract specific and bespoke amendments to use with the DOM/1 and DOM/2 standard forms of subcontract recommended for use with the Joint Contract Tribunal’s 1998 suite of standard main contracts. At this time, the provisions of the Housing Grants, Construction and Regeneration Act 1996 (“the 1996 Act”) were coming into force which effectively outlawed "pay when paid” clauses in construction contracts. Section 113 (1) provided that a “ provision making payment under a construction contract conditional on the payer receiving payment from a third person is ineffective, unless that third person, or any other person payment by whom is under the contract (directly or indirectly) a condition of payment by that third person, is insolvent”. Section 113 (2) so far as is material provided that “a company becomes insolvent (a) on the making of an administration order against it under Part II of the Insolvency Act 1986”.

6. Masons included in the draft a verbatim repetition of Section 113 (2) of the 1996 and also advised on the desirability of a "pay when paid" clause along the lines of the draft which had been incorporated in but later admitted from an earlier version of DOM/1. Masons also made certain amendments to the payment provisions, purportedly to bring them in line with Sections 110 and 111 of the 1996 Act. Clause 21.3.4 was prefaced with the words "Notwithstanding anything to the contrary contained in the Sub-Contract” and went on to say that the Contractor was not entitled to withhold payment after the final date of payment unless within a specific time it had given a "withholding notice".

7. The Enterprise Act 2002 made some alterations to the Insolvency Act 1986, adding at least one additional route whereby a company could go into administration, namely by it or its directors passing a resolution to that effect. It can be seen that the company resolution route for administration was not one which was expressly or in so many words covered by the insolvency provisions of the draft DOM/1 and DOM/2 and prepared by Masons four years earlier.

8. It is said by Shepherd that, between 1998 and 2008, Masons, Pinsent Masons and PMLLP drafted 13 separate sub-contracts or sets of subcontract amendments for it. Six "bespoke" sub-contracts or amendments are specifically identified as being the subject matter of advice and drafting between mid September 2003 and August 2008. The first was by Masons relating to the "Birmingham B5" project, carried out between August and October 2003 for which £16,450 was invoiced. The second, by Pinsent Masons, related to amendments provided for a JCT sub-contract for use with the JCT Major Project Form; £3,238.30 was invoiced with the work said to be done up to the end of July 2005. The third related to further drafting by Pinsent Masons of amendments to the GC Works standard form sub-contract with work done up to early December 2006 for which £4,700 was invoiced. The fourth, again by Pinsent Masons, involved amendments for the JCT 2005 standard form sub-contract, the work being done for work up to 17 November 2006 between 30 May and 7 June 2007 and some £8,000 was invoiced for this. The fifth involved amendments for use with the NEC3 standard sub-contract form with work done in August 2007 for which just over £7,000 was invoiced. The sixth involved drafting by PMLLP of a revised schedule of amendments for use with the NEC3 form; the work was carried out in August 2008 and some £7,000 was invoiced.

9. It is now not contentious that the separate practices of Masons and Pinsent were merged in December 2004 into a new partnership under the name Pinsent Masons with the Masons’ partnership being dissolved at that time also. Although PMLLP was incorporated as an LLP in December 2007, it started to trade on 1 March 2008 with Pinsent Masons in effect ceasing to practice and transferring its business and assets to PMLLP on that day.

10. Appendix 2 to the Particulars of Claim identifies that there was a wide range of contentious and non-contentious business undertaken by the various firms for Shepherd between 1998 and 2009, with further work indeed being done thereafter. Over 70 items of work are referred to in Appendix 2.The contentious business appears to have comprised adjudications and dealing with and advising upon disputes as they arose on a number of contracts. There is said to have been some "in-house training" together with various briefings provided by the firms.

11. In late 2007, Trinity Walk Wakefield Ltd ("Trinity") engaged Shepherd as main contractor to carry out a shopping centre development in Wakefield in West Yorkshire. Shepherd engaged at least three sub-contractors on this development. CR Reynolds (Construction) Ltd was engaged to carry out by way of an NEC3 sub-contract highway improvement works and by way of a DOM/2 sub-contract groundworks, drainage works and temporary works. Composite Ltd ("Composite") was engaged on the basis of DOM/2 sub-contract conditions to construct a precast concrete car park. William Hare Ltd (“Hare”) was engaged to provide structural steel work and other facilities on a subcontract incorporating the DOM/2 sub-contract conditions. These are the subcontracts were said to have been entered into before Trinity went into administration on 19 March 2009 following a resolution passed by the Board of Directors to appoint joint administrators on 11 March 2009.

12. In the case of Reynolds and Composite, they each secured adjudication decisions against Shepherd. In the case of Hare, Hare issued Part 8 proceedings in June 2009 addressing the issue raised by Shepherd, namely that Clause 32 of the sub-contract, materially said to have been the same as that drafted back in 1998 by Masons, permitted it not to pay in circumstances in which Trinity had gone into administration by whichever route. Mr Justice Coulson disagreed, effectively saying that Clause 32 allowed a pay when paid arrangement only where administration of the type specifically identified in Clause 32 occurred ([2009] EWHC 1603 TCC). Therefore, as administration following a directors’ resolution was not specified, Shepherd was required to pay Hare what was due even though it had not itself be paid by Trinity. This was upheld in the Court of Appeal ([2010] EWCA Civ 283).

13. Substantial losses are said to have arisen as a result of ineffective pay when paid clauses in sub-contracts on the Trinity development and another development known as the Grand Arcade in Wigan. The total losses are said to exceed £10.6 million.

These Proceedings

14. Shepherd issued and served its Claim together with Particulars of Claim by the end of May 2011. The Claim was initially directed only at PMLLP on the basis that it was "the successor practice" to Masons and Pinsent Masons. It would perhaps not be wholly unfair to say that elements of this pleading are not as "crystal" clear as they might be. There was reliance on what was called the "Single Contract" and reference back to the "relationship" which had built up from and after 1989, initially with Masons and then with Pinsent Masons is. This relationship is said to have given rise to the Single Contract but little if any explanation was provided as to how PMLLP assumed responsibility for the Single Contract.

15. Although in the extensive Pre-Action Protocol process which had been started in October 2009 it had not taken any such point, PMLLP issued an application on 12 July 2011 seeking to strike out the Claim on the basis that PMLLP could not be liable for breaches of contract on the part of or acts done or advice given by Masons or Pinsent Masons. The application was supported by the first witness statement of Mr Smith of PMLLP’s solicitors. The response in Mr O’ Carroll’s statement from Shepherd’s then solicitors (Wragge & Co) referred to the fact that this point was not taken in the Pre-Action Protocol process adding that Shepherd "always intended to sue in respect of the liabilities the Defendant initially acquired by the unincorporated partnerships of Masons…and Pinsents…in contract and/or negligence” (Paragraph 24). He added that an application to amend the proceedings by adding Masons and Pinsent Masons as additional defendants and to amend the Particulars of Claim otherwise would be made. This application was duly issued on 27 July 2011 supported by a second witness statement of Mr O'Carroll. He indicated that there was a continuing obligation on all three manifestations of the legal firms to advise Shepherd in connection with any necessary amendments to maintain the effectiveness of the amendments made in 1998 to its sub-contract conditions following changes in legislation (Paragraph 31); he asserted that in negligence limitation runs from the time that Shepherd suffered the damage which was the result of the negligence in question and that this occurred in 2009 when various judges ordered Shepherd to pay up to sub-contractors. This was responded to in Mr Smith’s second statement which referred to the lack of clarity about what Shepherd meant by there being some assumption by or transfer of liabilities to PMLLP. He referred to a letter said to have been sent to directors of Shepherd on 28 January 2008 saying that Pinsent Masons would remain responsible for advice and services provided up to the end of February 2008 but that PMLLP would be responsible for advice or other services given on or after 1 March 2008. There is an unresolved dispute as to whether the relevant directors received this letter. Mr Smith went on to challenge the adequacy of amendments which were sought, in particular in relation to the Single Contract point and limitation.

16. The matter came before the Court on 2 August 2011. Extensive skeleton arguments were submitted, with Shepherd’s Counsel making it clear that a possibly substantial further series of amendments would be required. I gave an ex tempore judgment. Having formed the view that significant further amendment was likely to be required and having expressed some sympathy for Shepherd’s position in that the gravamen of the points made by PMLLP had not been raised in the Pre-Action Protocol process, I adjourned the application to give to Shepherd a final opportunity to plead its case comprehensively both as to why there could be a single contract which survived is the incorporation of the LLP and as to how it could be said that the LLP assumed responsibility to giving advice in relation to contracts which had been drafted in previous years by different partnerships (see Paragraph 45 of the transcript of the Judgement given on 2 August 2011 obtained by Shepherd). I expressed the view (at Paragraph 47) that I was "not against the idea of Masons, the firm, and Pinsent Masons, the merged firm, being joined”. It was suggested by Mr Darling QC for Shepherd (without any obvious enthusiasm) that I had decided that they should be joined. However, in the light of the fact that I was adjourning the application, I was clearly not deciding any such thing; at most, I was indicating that I was not predisposed against the idea of joinder of the two firms.

17. The applications were adjourned until 27 September 2011 with directions that the final draft amendment needed to be served by early September 2011. Although the matter had been raised in July 2011, Beale & Co pointed out on 16 September 2011 that there was a conflict of interest in Messrs Wragge continuing to act because a Mr O’Shea who had formerly worked for Masons from 1996 to 2004 latterly as a partner and thereafter until March 2006 as a partner of Pinsent Masons had thereafter become a partner at Wragge & Co. It was said that he might become a material witness and that as a partner of Masons and Pinsent Masons he might be liable as a defendant. Clearly reluctantly, Shepherd and Wragge decided to part company at least on this litigation and the hearing of 27 September 2011 was adjourned. Shepherd then instructed Nabarro LLP who came on the record in mid-October 2011.

18. Meanwhile, on 11 August 2011 Shepherd had issued as a precautionary measure a second set of proceedings against Masons and Pinsent Masons. They were precautionary in the sense that there was a perceived risk that Shepherd might not get permission to add Masons and Pinsent Masons to the first set of proceedings.

19. For reasons which are now probably immaterial, the adjourned strike-out application was not re-fixed until 13 January 2012. Many of the issues have dropped away. Shepherd no longer seeks to add Masons and Pinsent Masons as defendants to the first proceedings. There is no application as such to strike out the second set of proceedings. PMLLP no longer seeks to set up an insuperable limitation defence as grounds for striking out at this stage. PMLLP does not challenge (for strike-out purposes) the arguability of specific assertions relating to specific retainers that it should have at least raised the possible need or desirability of revisiting the pay when paid provisions.

20. The primary argument which PMLLP pursues is that the assertions and pleading in the final version of the draft Amended Particulars of Claim relating to the Single Contract are unsustainable.

The Amended Particulars of Claim

21. I will not reiterate those parts of the Amended Particulars of Claim which have been summarised elsewhere in this judgement in particular within “the Background” above. Shepherd through its Counsel now accept in effect that there were three Single Contracts between Shepherd and Masons, Pinsent Masons and PMLLP and that PMLLP did not in some way assume the responsibilities and liabilities of Masons or Pinsent Masons.

22. Shepherd relies upon the fact that it “dealt with the same or substantially the same individuals - certainly at is partnership level - whether the legal entity was” Masons, Pinsent Masons or PMLLP (see Paragraph 3 of the draft pleading). It also relies upon the continuity proffered at the two changeover stages in December 2004 and March 2008. In argument, Mr Darling QC confirmed that it was Mr Job who provided the greatest continuity as from 1995 onwards, albeit that other people were also involved. Relevant key paragraphs of the pleading are as follows (with amendments not highlighted):

“8. The relationship between the Claimant and each of the Defendant practices whereby [Masons, Pinsent Masons or PMLLP] as the case may be regularly provided legal services to the Claimant across a range of issues and across a range of construction projects, was conducted on an informal basis. The nature of commissions and/or instructions of the Claimant was addressed on the telephone or in meetings, such that each action upon the Defendant was not recorded in writing by the Claimant. In seeking to cultivate a growing relationship with the Claimant, the Defendants from time-to-time indicated that they were content to proceed on this basis…

The Single Contract

10. As set out more fully below, regularly over a period of a number of many years, each of the Defendants provided advice, drafting and other legal services to the Claimant upon non-contentious massive, the considerations which was either monetary and/or the prospect of further instructions and/or work.

11. The relationship between the Claimant and each of the Defendants in succession was in the nature of a single contract or retainer comprising a range of specific instructions and commissions ("that Single Contract"). The Single Contract was based upon the on-going and close relationship between the Claimant and the Defendant; and upon the conduct of the parties over a number of years.

12. A term was necessarily implied into the Single Contract, and there was an equivalent duty of care at common law based upon the assumption of advice and/or drafting by the Defendants that the Defendants would exercise all reasonable skill and care in or about the provision of those legal services. This included an on-going duty upon successive Defendants to review the suitability of drafting amendments and/or drafting advice previously provided to the Claimant, in light inter alia of legislative and other legal developments. For the avoidance of doubt, this on-going duty to review was a duty upon [Masons] up to and including is 5 December 2004; [Pinsent Masons] between 6 December 2004 and 29 February 2008; and [PMLLP] is at all times after 1 March 2008, for the reasons set out in paragraph 15 relating to the transfer of the Single Contract.

13. The manner in which each of the three Defendants became, in succession and due to changes of corporate organisation, a party to a Single Contract with [Shepherd] is set out below:

(i) The Single Contract was [a] contract between [Shepherd] and [Masons] for the provision of legal services by a group of non-contentious lawyers within that firm, based on the relationship between those lawyers within [Masons] and [Shepherd’s] senior commercial personnel. The Single Contract reflected consistency in terms of the personnel of [Masons]; the broad type of work undertaken; and broad consistency and continuity in terms of fees charged.

(ii) Subsequently:

(a) Upon dissolution of the [Masons] partnership, the Single Contract was discharged but then, as evidenced by the conduct the parties, concluded on the same basis between [Shepherd] and [Pinsent Masons] on or shortly after 6 December 2004. This is evidence inter alia by the e-mail dated 24 November 2004 [which talked about merger and building upon relations already forged]; and [Shepherd] also relies on the clear conduct of [Shepherd], [Masons] and [Pinsent Masons] in treating the Single Contract as having passed from [Masons] to [Pinsent Masons] without any alteration or re-negotiation.

(b) The Single Contract between [Shepherd] and [Pinsent Masons] was discharged on or about 29 February 2008 and upon the commencement of trading of [PMLLP] as an LLP from 1 March 2008, and as evidenced by the conduct of the parties, the Single Contract was concluded on the same basis as previously between [Shepherd] and [PMLLP].”

23. In Paragraph 13(iii), Shepherd goes on to rely on specific communications from PMLLP to it to demonstrate that "the Single Contract was concluded on the same basis as previously between" Shepherd and PMLLP. Reliance is placed upon the following:

(a) The round robin letter sent to Shepherd in late 2007 by PMLLP that "the UK business and assets of [Pinsent Masons] will be transferred to [PMLLP] on 1 March 2008".

(b) An email dated 8 May 2008 from Mr Job to a Mr Smylie of Shepherd responding to the latter’s request for an electronic copy of certain GC Works Contract amendments; Mr Job said that Shepherd’s standard sub-contract “will almost certainly need updating”.

(c) An e-mail dated 22 July 2008 to Mr Smylie in which another partner at PMLLP drew his attention to a draft bill amending the Housing Grants, Construction and Regeneration Act 1996.

(d) An e-mail dated 11 August 2008 in which PMLLP provided comments on an attached set of draft amendments to the NEC3 sub-contract used by Shepherd.

(e) An e-mail dated 9 April 2009 in which Mr Job contacted Mr Smylie drawing his attention to a new £4 billion framework agreement relating to Academy schools.

(f) An e-mail dated 27 July 2009 in which Mr Job contacted Mr Smylie commenting on the Court of Appeal judgement in the Hare case to the effect that he recommended that amendments be made to “ pay when paid" provisions in the standard sub-contracts.

(g) By an e-mail dated 7 October 2009, a PMLLP partner contacted Mr Smylie setting out an opinion on a recent unrelated adjudication case in the House of Lords.

The paragraph concludes:

“[Shepherd] and [PMLLP] have both proceeded on the clear understanding that, from 1 March 2008, the legal services - including advisory work and drafting - previously provided by personnel within [Pinsent Masons] would be provided by [PMLLP]. Given the clear conduct of the parties, upon which [Shepherd] relied and was intended to rely by [PMLLP], [PMLLP] can not now in conscience deny the existence or nature of the relationship. Furthermore, given the high degree of consistency and continuity in terms of the personnel involved in such work; the broader type of work undertaken; the nature of the working relationship; and in terms of fees charged, there was plainly a Single Contract between [Shepherd] and [PMLLP].”

24. In the alternative, Shepherd relies upon "multiple individual contracts" in relation to each of the commissions or tasks undertaken for Shepherd by the different firms involved. At Paragraph 69, Shepherd asserts that in August 2008 PMLLP was advising it in relation to changes to the NEC3 form of subcontract and that PMLLP should have picked up upon the alleged inadequacies in that form, in particular in relation to the different types of administration which might legitimately trigger the "pay when paid" arrangement; if PMLLP had done so, Shepherd asserts that it would have undertaken or instructed the undertaking of a wholesale review of all the sub- contract amendments including those for the Trinity development. This assertion is put in two ways, either pursuant to the Single Contract or to a specific commission in relation to the NEC3 amendments.

25. Paragraphs 70 to 74 address the breaches relied upon which in relation to the Single Contract are to the effect that Masons, Pinsent Masons and PMLLP, should each have advised on or warned of the need for amendments to enable Shepherd to withhold payment from sub-contractors following an administration initiated by a resolution of the company or its directors and that existing subcontracts used by Shepherd were inadequate in this context.

The Arguments

26. Essentially, Mr Stewart QC (on behalf of PMLLP and the 193 current partners of PMLLP who were formerly partners in Masons and/or Pinsent Masons, and who have been served with the second Claim) argues that the claim raised on the Single Contract simply has no prospect of success and is otherwise "hopeless"; he argues that none of the points put forward as giving rise to some implication that there was a Single Contract support such an implication. For the purposes of the striking out application, he no longer pursues any argument based on limitation although, necessarily, he reserves his clients’ position both in relation to breaches of contract which occurred more than six years before the issue of the various proceedings and in relation to any claim in negligence as to when any "damage" can be said to have occurred. He accepts that the claim as based on multiple contracts is to that extent not "demurrable”.

27. Mr Darling QC made it clear that his client was in a difficult position in the sense that, if the multiple contracts encompassed no obligation on the part of the solicitors in question to review earlier advice or drafts (that not being accepted by PMLLP), he had to argue that there was some overarching contract or requirement whereby such reviews were required and that this was provided by the argument on the Single Contract. He emphasised that it was the relationship over many years between much the same solicitors, albeit the partnerships may have changed, and Shepherd and the type of relationship that gave rise to the implication that effectively by conduct there was or must be considered to have been a Single Contract which are required the firms to review advice given earlier.

Discussion

28. Without finally deciding the point, I can see some force in the argument that a specific commission undertaken by a solicitor to review a draft sub-contract may carry with it a responsibility to revisit earlier related advice given by the same firm of solicitors. On a similar basis, I can also see some force in the argument that, particularly where there is a long-standing relationship between solicitors and particular clients, the review for those clients by those solicitors of one standard form which leads to a view that fundamental revisions of other standard forms may be required should lead to the need at least for those solicitors to advise their clients that such other revisions may be required. An example might be that a solicitor has advised on standard form X some time before but he is asked, say, three years later to advise on standard form Y; in reviewing Y, the solicitor’s duty of care will be directed towards getting Y right; if he or she actually advises that Y needs a specific term and knows or should have known that X did not contain such a term, then it is at least arguable that the contractual or even tortious duty on the Y commission extends to advising the client that X, if known to be in current use, may be deficient. It may well all be a matter of fact and degree and if the advice on X was given 20 years before and the solicitor has had no involvement on standard form X since then, it may be that he or she cannot be criticised by the time of the Y commission for not mentioning that X is deficient.

29. Essentially, however, Shepherd’s contentions are very wide. They imply that because of the extensive and long-lasting relationship between Shepherd and much the same personnel, albeit in different partnership manifestations from time to time, there must have been an overarching retainer between Shepherd and, respectively, Masons, Pinsent Masons and PMLLP which required whichever firm it was during each of their respective general retainers to review the suitability of draft amendments or advice previously given to Shepherd in the light of legislative or other developments. Thus, it is argued that, even if the advice given in 1998 was not actually or causatively negligent at the time it was given, subsequent legislation which renders that advice obsolete will trigger the responsibility pursuant to the Single Contract to advise the client of that risk or difficulty.

30. In my judgement, I consider that the allegations that there was a Single Contract and that there were breaches of it are unsustainable on the basis put forward latterly by Shepherd. My reasons are as follows:

(a) A solicitor’s functions and responsibilities must primarily be determined by his or her retainer.

(b) There is no suggestion or assertion that there was any express agreement, oral or otherwise, by which the Single Contract between Shepherd and each of the three firms was concluded.

(c) It seems to be accepted and indeed the draft amended pleading asserts that Shepherd was billed for the provision of individual pieces of work by the respective firms. There is no suggestion that Shepherd ever made or was asked to make any payments in relation to the Single Contract(s).

(d) I do not see how the placing of specific commissions on a more or less informal basis, even if there are a large number of them, can give rise to a necessary implication that there was or must be some overarching general retainer by which the solicitor is required to keep under relatively constant review all advice and drafting previously done. The very fact that there were specific commissions suggests that that is all that they were.

(e) The facts that the respective firms of solicitors sent out unsolicited briefings or invited the client to breakfast meetings or seminars or even sought to solicit (doubtless within the requisite professional rules) more work from the client does not give rise to any such implication.

(f) The facts that the same people within the respective solicitor firms had contact with and generally gave advice to Shepherd again does not give rise to there being some general retainer.

(g) It is not alleged, save in one respect, that anyone from the respective solicitor firms actually knew that advice previously given (in this case in 1998) had become in the light of the Enterprise Act 2002 not only obsolete but commercially imprudent. Whilst it might (arguably) be possible to imply into the obligation within the 1998 retainer to exercise reasonable care and skill that, if Masons had actually become aware at a later stage that the advice given earlier had become redundant and gave rise to potential commercial problems, it should so have advised the client, that is not the allegation here. The only exception to this is the advice, if such it was, volunteered by Mr Job in July 2009 that, in the light of the Court of Appeal’s judgment in the Hare case, Shepherd should look to amend their standard terms. However, this can not be causative as the e-mail came some months after the requisite Trinity sub contracts had been entered into and, in any event, Mr Job, knowing of the Court of Appeal decision, complied with any obligation to pass on to his former client reservations about earlier advice of which he had actually become aware.

(h) I do not consider that the draft amended pleading extends to asserting that the successor firms owed an obligation pursuant to the Single Contract(s) to review advice and drafts provided by the earlier partnerships. I say this because it is expressly accepted in the draft amended pleading that there were separate Single Contracts between Shepherd on the one hand and during the periods of time over which each was in existence Masons, Pinsent Masons and later PMLLP. It is even more unlikely to be implied that the Single Contract between a later partnership and Shepherd required that later partnership to review advice and drafts given or provided by earlier partnerships.

(i) The facts that Masons and Pinsent announced in late 2004 that they were merging and that later in late 2007 PMLLP told clients that the business and assets of Pinsent Masons was being transferred to it does not obviously give rise to some implied Single Contract whereby the later firms undertook to review earlier advice and drafts provided by them or the earlier firms. The PMLLP advice was qualified in any event that PMLLP is was not responsible for advice or services provided prior to 1 March 2008; either, as Shepherd asserts, it did not receive that advice in which case it cannot rely on it, or it did get the advice and it was subject to the qualification.

31. There is something commercially and professionally worrying if professional people are to be held responsible for reviewing all previous advice or indeed services provided. There is a difference to be drawn between a specific retainer or commission which imposes a continuing duty on a professional to keep earlier advice or services under review and some sort of obligation which requires the professional to review and revise previous advice given or services provided on commissions or retainers which are complete. Thus, in the field of architects or engineers, their retainers may require them to keep under review designs which they had produced during the course of those retainers; if during the defects liability period an architect either ascertains or should ascertain that the design put into effect is defective, possibly in the light of new practice, it may well be that his or her retainer requires him or her at least to raise this with the client. However, the fact that the architect or engineer has a number of commissions with the particular client would not mean that as such they must review the designs on completed commissions. Again, by one route or another, different considerations may apply if the professional actually knows or becomes aware that his or her earlier work is or has become in some way deficient; even that may be subject to time constraints and may not be an indefinite responsibility. Another consideration of course is the financial one: if such a reviewing function continues indefinitely or at least for a long time into the future, is the professional entitled to be paid for what may be extensive time reviewing and advising on the need for revision of earlier advice or drafting done by him or her?

32. This latter point also leads me to doubt the somewhat bland assertion made in Paragraph 10 of the draft Amended Particulars of Claim that consideration for the Single Contract was "either monetary payment and/or the prospect of further instructions and/or work". This is of course, if anything, implicit consideration on an implied Single Contract. It is not readily obvious why the prospect of further instructions or work to be given under specific commissions could be consideration for the Single Contract. If it was implicit that Shepherd was to be responsible for reasonable fees for the constant reviewing of earlier advice, that could impose a very heavy financial responsibility on Shepherd: if lawyers are entitled to charge for keeping all earlier advice and drafting under review, that could well involve, say, once or twice a year reviewing the earlier advice and, as appropriate, writing to the client about the results of the review. The costs of reviewing could run into many thousands of pounds, particularly if one includes for reasonable research into legislative changes and current legal decisions. I consider that it is very difficult to say that the implied consideration would be monetary payment for the reviewing function.

33. Different considerations may apply where the relationship between a client and solicitor is that of being the family solicitor. Thus, a solicitor may draft a will for a long-standing private client and later handle his divorce; knowing that an impending re-marriage would invalidate the earlier will, it may be incumbent upon the solicitor at least to advise his client of this consequence. However, that may be because there is on analysis a general retainer by which the solicitor is required from time to time to give advice to his client for reward.

34. Essentially, the Single Contract relied upon by Shepherd is in effect a general and continuing retainer by which the relevant firm was required to review all advice and drafting which it had previously done. One has only to summarise this position to realise that it is hopelessly wide. There is no need to imply such a retainer simply because there was a large number of specific commissions and because much the same personnel on the solicitors’ side were involved. The fact that there were specific commissions militates against the implication of such a general retainer. The involvement of the same personnel even over many years is unsurprising in a commercial legal context and does not give rise to any such implication either. Again, the fact that there has been a long-standing relationship between individual partners or employees and a client is simply a fact of life rather than something which gives rise to an implication of some general retainer.

35. If the existence of a long-standing relationship and the award of numerous specific commissions to a solicitor gave rise by implication to an implied general retainer pursuant to which the solicitor had to keep under review all previous advice and drafting, this would have very wide ramifications for the the solicitors’ profession and indeed to their clients who might be expected to have to pay. Mr Stewart QC suggested in argument that, if these factors gave rise to the implication of such a retainer, this would amount in one sense to an insurance policy in favour of a client in the sense the client could expect the solicitor to keep him or her informed of any changes in the law or indeed anything which might significantly impact on the earlier advice or drafts. The point raises more questions than it answers. For instance, how long does this obligation go on? Is it one year, five years, 25 years or even longer? What happens if the partners who were originally involved retire or move on? Does the general retainer continue? What happens if the solicitor received no more commissions from the client? Does the general retainer continue? Mr Darling QC sought to address some of these conundrums by seeking to qualify the general retainer or Single Contract by saying that it would not be initiated or activated if there were no new commissions. But again, that does not seem to be a complete answer because what happens if the next commission comes two, five or 10 years later or if the commission is of a very different type to previous ones? Is it then the fact that the specific later commission has in some way activated the Single Contract? These difficult questions suggest that it is going to be difficult in most cases to imply a Single Contract or general retainer simply because there is a long-standing professional relationship between solicitor and client, the same personnel are involved and there are a large number of specific commissions.

Decision

It follows from the above that in relation to those parts of the draft Amended Particulars of Claim which rely upon the Single Contract they should either be struck out in so far as they were in the original Particulars of Claim or permission to amend is not granted as the case may be. This is on the basis that they do not have any realistic prospect of success.