Thrown To The Lyons: Are Solicitors Under A General Duty To Warn?

Are solicitors under a duty to warn their clients about risks relating to matters which fall outside the scope of their retainer, or are their duties limited to advising only on matters which form part of their instructions? These questions often arise in professional negligence claims against solicitors. In this article we consider the current state of the law in light of the Court of Appeal's decision in Lyons v Fox Williams LLP [2018] EWCA Civ 2347.

The claimant, Mr Lyons, was the CFO and Managing Partner of Operations for EY in Moscow. He was seriously injured in a motorbike accident which resulted in part of his right foot being amputated and lasting damage to his right shoulder and arm.

Mr Lyons made claims under two insurance policies taken out by EY for the benefit of its employees. The first covered Accidental Death and Dismemberment (ADD), while the second covered Long Term Disability (LTD).

He instructed Fox Williams, the defendant solicitors, to advise him on his claim under the ADD policy, which was disputed by EY's insurers. The firm's engagement letter did not expressly refer to the claim under the LTD policy, which was dealt with by EY.

Subsequently, Mr Lyons decided to leave EY and Fox Williams' retainer was extended to advising him on a settlement agreement. As part of the settlement, Mr Lyons wanted EY to compensate him for his injuries if the ADD insurers did not. He eventually reached a settlement with EY which included the ADD claim. His claims under both the ADD policy and the LTD policy later became time-barred.

Mr Lyons instructed alternative solicitors who managed to obtain payment under the ADD policy. He then sued Fox Williams for damages in respect of the LTD claim, alleging negligence and a failure to warn him that he needed to get advice about that claim.

At first instance, Mr Justice Turner found that Mr Lyons had not instructed Fox Williams to advise on the LTD claim and that advising on the scope and validity of the LTD policy had not formed part of the retainer. He also found that Fox Williams had not been under a duty to warn Mr Lyons about the risk that his claim under the LTD policy might become time-barred.

Mr Lyons appealed. He argued that Fox Williams had been under a duty to warn him in substantive terms about his rights under the LTD policy and what needed to be done to prevent the LTD claim from becoming time-barred, or to warn him that the claim might have time limits and that he needed advice.

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