BPE Solicitors and another v Hughes-Holland (in substitution for Gabriel) [2017] UKSC 21

Citation

• Full case name: BPE Solicitors and another (Respondents) v Hughes-Holland (in substitution for Gabriel) (Appellant)
• Neutral citation: [2017] UKSC 21
• Court: Supreme Court of the United Kingdom (on appeal from [2013] EWCA Civ 1513)
• Judgment date: 22 March 2017
• Panel: Lord Neuberger, Lord Mance, Lord Clarke, Lord Sumption, Lord Hodge
• Leading judgment: Lord Sumption

Facts

In November 2007 Mr Gabriel, a semi-retired businessman whom the trial judge described as astute and knowledgeable about property, met a builder and developer, Mr Little, in a pub. Mr Little said he wanted to borrow £200,000 in connection with a disused heating tower on Kemble Airfield in Gloucestershire, for which planning permission had been granted for development as offices.

Mr Gabriel assumed the £200,000 would be used to finance the development. It would not have been. The building belonged to Mr Little’s operating company subject to a bank charge securing a loan of £150,000. The plan was to transfer it to a special purpose vehicle which would pay £150,000 for it, that sum being used to discharge the bank loan, with the balance going to the operating company’s VAT liability. Nothing would have been left to fund the development. The judge found Mr Gabriel knew nothing of this and would not have accepted it.

BPE, Mr Gabriel’s solicitors, prepared the facility documentation. They carelessly produced a document which reinforced his mistaken assumption about what the money was for. The development was never carried out, the loan was never repaid, and the property was eventually sold for a fraction of the sum lent. Mr Gabriel was later made bankrupt and the claim was pursued by his trustee.

Issue

What damages are recoverable where, but for a professional adviser’s negligence, the client would not have entered into a transaction at all, but part or all of the loss arose from risks that it was no part of the adviser’s duty to protect the client against?

Decision and ratio

The Supreme Court dismissed the appeal. Lord Sumption reviewed the authorities since SAAMCo and confirmed the distinction between a professional who provides information for the purpose of enabling someone else to decide on a course of action, and one who advises on whether to take that course of action.

He warned against treating either category as the normal case. A valuer or a conveyancer will rarely supply more than a specific part of the material on which the client’s decision is based, and is generally no more than a provider of information. At the other end of the spectrum an investment adviser recommending a particular stock is giving advice. Between those extremes, every case depends on the range of matters for which the defendant assumed responsibility, and no more exact rule can be stated.

Applying that to the facts, BPE was not legally responsible for Mr Gabriel’s decision to lend. It was responsible only for confirming his assumption about one of a number of factors in his assessment of the project. Even if that assumption had been correct he would still have lost his money, because spending £200,000 would not have enhanced the value of the property enough. As Lord Sumption put it, none of the loss was within the scope of BPE’s duty; it arose from commercial misjudgements which were no concern of theirs.

Why it matters for insurance

This is the case that professional indemnity insurers and defence solicitors reach for when a claim is pleaded at the full value of a failed transaction. It does not deny the breach; it asks a different question, which is what the professional was actually there to do.

For insured firms the message is about the retainer and the file. The range of matters for which responsibility was assumed is established by the engagement letter, the instructions, and the documents that were produced. A firm that defines scope clearly, records what it was and was not asked to consider, and resists drift beyond the retainer, is a materially better risk.

For brokers, this is a case worth knowing when a client is alarmed by the headline value of a notified circumstance. The number pleaded and the number recoverable are frequently very different, and the difference affects how the notification should be presented and how the excess is likely to bite.

See also

• SAAMCo — the House of Lords decision this case applies
• Manchester Building Society v Grant Thornton — the later restatement of scope of duty
• AIB Group v Mark Redler & Co — equitable compensation and solicitors’ breaches of trust
• Midland Bank v Hett, Stubbs & Kemp — the scope of a solicitor’s retainer

References

• BPE Solicitors v Hughes-Holland (in substitution for Gabriel) [2017] UKSC 21 (Supreme Court, 22 March 2017)
• South Australia Asset Management Corporation v York Montague Ltd [1997] AC 191
• Manchester Building Society v Grant Thornton UK LLP [2021] UKSC 20

Frequently asked questions

What is the information and advice distinction?

It separates a professional who supplies part of the material on which a client makes a decision from one who advises on whether to make that decision at all. The first is answerable for the consequences of the material being wrong; the second may be answerable for the consequences of the decision. Lord Sumption stressed that the categorisation is fact-sensitive.

Did the solicitors escape liability because they were not negligent?

No. The negligence was not the issue. The Supreme Court held that none of the loss fell within the scope of the duty BPE had undertaken, because the firm was not responsible for the decision to lend and the loss would have occurred even if the assumption it confirmed had been correct.

What should a professional firm take from this case?

That scope is decided by the retainer. A clear engagement letter, a recorded scope of instructions and discipline about not drifting beyond it are what allow this defence to be run, and they are also what a PI underwriter looks for when assessing a firm.

This page is insurance information for UK businesses, not legal advice. It summarises a reported judgment and explains why insurance buyers and brokers refer to it; it is not a substitute for reading the judgment or taking advice on your own facts. Case summaries are necessarily short and omit detail. Position stated as at August 2026.

Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority (FRN 724952). This page is general information, not advice on a specific policy.