International law firm Denton Hall (Dentons) is facing a claim for negligent pension advice despite denying that it was retained to do the work.  The court decided that a retainer was inferred by the firm’s conduct and that it must face trial.

The trustees of the Sea Containers 1990 Pension Scheme had appointed Sedgwick Financial Services to advise on equalising the pension ages of women and men in the scheme.  The exercise failed and the trustees accused Sedgwick of negligence.

Sedgwick denied providing legal advice to the trustees and started a claim against Dentons, saying they were responsible for ineffective legal advice.

Dentons in turn argued that it had only provided employment advice to the scheme and that it did not have a retainer to provide legal advice to the trustees about age equalisation. It applied to the court for Sedgwick’s claim to be struck out.

Dentons had however, an undisputed earlier retainer with the trustees and the judge, Master Schuman, concluded that as they had continued work with the later version of the scheme that a retainer could be implied. “Where the parties act as if the relationship of solicitor and client existed, even though there is no express written agreement to that effect, an implied retainer may be inferred from their conduct,” she said. “That might arise where a solicitor is retained to act in a past transaction but reviews documents in respect of a subsequent transaction. All the circumstances, for example, meetings, attendance notes, correspondence, have to be examined to see if a retainer can be inferred.

The Master refused to strike out the claim and ruled that the claim should be decided at trial.  “I consider that the claim has a realistic as opposed to a fanciful prospect of success. I do not need to determine that the claim is bound to succeed, simply that it is a realistic claim, that there is some degree of conviction,” she said.

James Burgoyne, Director – Claims & Technical, Brunel Professions says the case underscores the importance of law firms having a written retainer with their clients. “It is easy for there to be ‘mission creep’, with firms taking on more responsibility than they bargained for.  Firms must have a written retainer which sets out the scope of the work they have been asked to do for clients and keep this under regular review,” he said. “Most importantly, having got in place a written retainer, they should stick to it.” 

News reports about the case have been published by DWF, Legal Futures, Law Society Gazette and Civil Litigation Brief.

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