Solicitors' PI: Scope Of A Fixed Fee Retainer

In a recent case the Court has considered the scope of duty owed by a solicitor retained on a fixed fee retainer. For an agreed fee of £500, a firm of solicitors was instructed to "look over" intellectual property agreements and to discuss "certain key issues". The Court found the solicitors were not required to make enquiries about the ownership of the IP rights: this was not within the scope of the retainer. However, the solicitors were negligent in failing to ensure that the relevant clause dealing with the sale of IP rights extended to licensing in addition to sale. The Court said that this was not a matter on which the solicitors required instructions; the antennae of any commercial lawyer, especially one claiming expertise in IP law, should have been alert to the issue, almost without thought. The Court also said that where solicitors undertook work for a specific fee, they are generally speaking obliged to complete the work to the ordinary standard of care, even if it becomes unremunerative to do so. The case illustrates the risks associated with fixed fee retainers. It shows that if a fixed fee retainer is agreed then a solicitor should be careful to:

Send the client a clear retainer letter, setting out the scope of the retainer and excluding liability for advice beyond the scope of the retainer. Calculate fees only when full information has been provided (the solicitors agreed the fee of £500 before seeing the agreements in question). Ensure that the advice given for the fixed fee is the same advice that would have been given had the work been undertaken on an hourly basis. Ensure that advice that is of importance and readily apparent to a lawyer in that specialism is given, potentially even if it falls outside the scope of the retainer. To view the article in full, please see below:

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In a recent case the Court has considered the scope of duty owed by a solicitor retained on a fixed fee retainer. Mr S wanted to market a new tool through his company, Inventors Friend Limited. The tool distributed cement and adhesive. A distribution agreement and a sub-agreement were drawn up between Mr S and the inventors. Mr S then contacted the Defendant law firm, Leathes Prior, and asked if they could comment on the terms of the agreements for £150. The solicitors said that £150 was not feasible but they agreed to "briefly review and comment on the terms of the agreements but not to draft or make detailed background enquiries" for a...