Part 5. What was the extent of the solicitor’s duty to advise?
32. The extent of a solicitor’s duty to his/her client is determined by his/her retainer. The starting point in every case is to ascertain what the client engaged the solicitor to do or to advise upon.
33. The classic formulation of this principle is to be found in Midland Bank Trust Co Limited v Hett, Stubbs and Kemp (a firm)  1 Ch 384, a case concerning solicitors’ liability for failure to register an option. At 402 to 403 Oliver J said:
“The extent of his duties depends upon the terms and limits of that retainer and any duty of care to be implied must be related to what he is instructed to do.
Now no doubt the duties owed by a solicitor to his client are high, in the sense that he holds himself out as practising a highly skilled and exacting profession, but I think that the court must beware of imposing upon solicitors – or upon professional men in other spheres – duties which go beyond the scope of what they are requested and undertake to do. It may be that a particularly meticulous and conscientious practitioner would, in his client’s general interests, take it upon himself to pursue a line of inquiry beyond the strict limits comprehended by his instructions. But that is not the test. The test is what the reasonably competent practitioner would do having regard to the standards normally adopted in his profession, and cases such as Duchess of Argyll v. Beuselinck  2 Lloyd’s Rep 172; Griffiths v. Evans  1 W.L.R 1424 and Hall v Meyrick  2 Q.B. 455 demonstrate that the duty is directly related to the confines of the retainer.”
34. In Carradine Properties Limited v DJ Freeman & Co [1955-1995] PNLR 12, the plaintiffs engaged contractors to demolish a building in Clacton. The contractors damaged an adjoining property, thereby exposing the plaintiffs to liability. The plaintiffs instructed the defendant solicitors to make a claim against the contractors and, subsequently, to consider making a claim against the estate agents who had selected those contractors. The plaintiffs did not inform the defendants that they themselves had an insurance policy covering the incident and they did not ask the defendants to consider the plaintiffs’ insurance position. Thompson J held that the defendants were not negligent in failing to think of the point themselves and to proffer advice upon it. The Court of Appeal upheld this decision. Lord Denning MR attached importance to the fact that the plaintiffs’ managing director was very experienced in insurance matters. At 12-13, Donaldson LJ said that the precise scope of the duty to advise would depend inter alia upon the extent to which the client appeared to need advice. He continued:
“An inexperienced client will need and will be entitled to expect the solicitor to take a much broader view of the scope of his retainer and of his duties than will be the case with an experienced client.”
35. In Hurlingham Estates Limited v Wilde & Partners  1 Lloyd’s Law Reports 525, the defendant solicitors acted for the plaintiff in the purchase of (a) shares in a company called ALM and (b) the lease of the shop where ALM carried on business. The transaction was structured in such a way that the plaintiff incurred a tax charge of £69,455. Lightman J held that the defendants were liable for failing to advise the plaintiff how to structure the transaction so as to avoid the tax charge. He rejected the defence that the defendants had limited the scope of their duties by agreement. At 526 Lightman J said:
“The second remarkable feature is that there is no written record of the alleged (but disputed) agreement to limit the solicitors’ duties. Any such agreement must plainly, if it is to have any legal effect, be clear and unambiguous: the client must be fully informed as to the limited reliance he may place on his solicitor and the reason for it (i.e. the solicitor’s lack of any basic knowledge or competence), that this limitation is not a normal term of a solicitor’s engagement, and that the client may be better advised to go to another solicitor who is not so handicapped and can be retained with no such limitation on his duties. Common sense requires that all these matters should also be recorded in an attendance note of the meeting where they are discussed and agreed, and should subsequently be recorded in a letter to the client.”
36. In National Home Loans Corporation PLC v Giffen Couch & Archer  1 WLR 207, the plaintiff, a mortgage lender, instructed the borrower’s solicitors to investigate title, to report on the plaintiff’s printed form and to carry out a bankruptcy search. The defendants complied with those instructions. They did not, however, notify the plaintiff about the borrower’s existing arrears or the threat of legal proceedings. The trial judge held that the defendants were liable for breach of duty and awarded damages of £78,192. The Court of Appeal reversed that decision, holding that the defendants complied with their instructions and correctly answered all the questions on the plaintiff’s printed form. Peter Gibson LJ (with whom Hobhouse and Leggatt LJJ agreed) applied the principles stated in Midland Bank and Carradine Properties. He took into account that the plaintiff was an experienced commercial lender, which had specified the particular matters about which it required to be advised.
37. In Credit Lyonnais SA v Russell Jones & Walker (a firm)  EWHC 1310 (Ch);  All ER (D) 19, the claimant instructed solicitors in relation to the exercise of a break option contained in a lease. The solicitors gave correct advice about the service of the notice, but failed to advise about the requirement to pay £11,500. As a result of the claimant’s non-payment, the landlord declined to accept premature termination and the claimant had to buy its way out of the lease. Laddie J held that the solicitors were liable for breach of duty. He reviewed the authorities in this field including some well known cases which I have not traversed in this judgment. Laddie J summarised the principles at  in a passage with which I respectfully agree:
“A solicitor is not a general insurer against his client’s legal problems, His duties are defined by the terms of the agreed retainer. This is the normal case although White v Jones  2 A.C. 207 suggests that obligations may occasionally arise outside the terms of the retainer or where there is no retainer at all. Ignoring such exceptions, the solicitor only has to expend time and effort in what he has been engaged to do and for which the client has agreed to pay. He is under no general obligation to expend time and effort on issues outside the retainer. However if, in the course of doing that for which he is retained, he becomes aware of a risk or a potential risk to the client, it is his duty to inform the client. In doing that he is neither going beyond the scope of his instructions nor is he doing “extra” work for which he is not to be paid. He is simply reporting back to the client on issues of concern which he learns of as a result of, and in the course of, carrying out his express instructions.”
38. Let me now stand back from the authorities and summarise the relevant principles:
i) A solicitor’s contractual duty is to carry out the tasks which the client has instructed and the solicitor has agreed to undertake.
ii) It is implicit in the solicitor’s retainer that he/she will proffer advice which is reasonably incidental to the work that he/she is carrying out.
iii) In determining what advice is reasonably incidental, it is necessary to have regard to all the circumstances of the case, including the character and experience of the client.
iv) In relation to (iii), it is not possible to give definitive guidance, but one can give fairly bland illustrations. An experienced businessman will not wish to pay for being told that which he/she already knows. An impoverished client will not wish to pay for advice which he/she cannot afford. An inexperienced client will expect to be warned of risks which are (or should be) apparent to the solicitor but not to the client.
v) The solicitor and client may, by agreement, limit the duties which would otherwise form part of the solicitor’s retainer. As a matter of good practice the solicitor should confirm such agreement in writing. If the solicitor does not do so, the court may not accept that any such restriction was agreed.
39. In respect of proposition (v), I am somewhat more cautious in my formulation of the principle than was Lightman J in Hurlingham. The passage which I have quoted from Hurlingham certainly reflects good practice in appropriate cases, but I doubt that it embodies any universally applicable rule of law. There are many situations in which the client cannot afford to pay for all the relevant research and advice that the solicitor would be competent to provide. In those situations the choice may be between a limited retainer or no retainer at all.