The default position in English law is that a solicitor's duty of care in contract and tort runs to the client who retained the firm. A third party affected by a solicitor's work generally has no claim, because the relationship lacks the proximity that the law of negligence requires. The Caparo tripartite test — foreseeability of harm, proximity between the parties, and whether it is fair, just and reasonable to impose a duty — is the framework the courts apply when deciding whether to depart from that default. For background see Caparo v Dickman and the three-stage test explained.
The leading exceptions involve situations where the solicitor knew, or ought to have known, that a specific non-client would rely on the work, and where denying a remedy would leave a clear injustice. The cases below mark out where the line has been drawn.
A solicitor instructed to draft a will, who fails to do so competently, may be liable to the intended beneficiaries even though the beneficiaries were never the client. The House of Lords held that the testator's estate suffers no loss (the money simply passes elsewhere), so unless the beneficiary has a claim the negligence goes unremedied. Lord Goff extended the Hedley Byrne assumption of responsibility to fill that gap. The duty is narrow: it depends on the solicitor knowing the testator's testamentary intention and the identity, or at least the class, of those intended to benefit.
Worked example — illustrative only. A solicitor takes instructions to leave a £200,000 legacy to a named nephew. The drafting clerk transposes a clause and the legacy is recorded as passing to a different relative. The testator dies before the error is noticed. Applying Caparo: foreseeability is satisfied because the named nephew was identified in the file; proximity is satisfied because the solicitor knew the benefit was intended for him; and it is fair, just and reasonable to impose a duty because the testator's failure would otherwise leave no remedy for the loss. The nephew can sue in his own right under White v Jones.
Where a solicitor acts for a borrower but knows that an unrepresented lender is relying on the firm to perfect the security, a duty may be owed to that lender. In Dean v Allin & Watts the lender was an electrician advancing money on what he believed to be a secured basis; the borrower's solicitor failed to put effective security in place. The Court of Appeal found the lender's reliance foreseeable and that the solicitor had assumed responsibility for the task on which the lender depended. The case is often cited for the proposition that an unrepresented party can in narrow circumstances be owed a duty by the other side's solicitor.
The Supreme Court returned to third-party reliance in Steel v NRAM. A solicitor acting for a borrower sent the lender a deed of release that incorrectly extinguished security over properties that should have remained charged. The lender executed it without checking. The court held that no duty was owed: an assumption of responsibility requires reasonable reliance, and a commercial lender with its own legal resources could not reasonably rely on a representation made by the borrower's solicitor about the lender's own security. Steel reins in broader readings of Dean v Allin & Watts and confirms that the threshold for cross-party duties remains high.
Two recurring exposures arise in property work. The first is the lender duty under the UK Finance (formerly CML) Handbook, where the solicitor acts for both borrower and lender and the lender's instructions create direct obligations. The second is the sub-purchaser scenario, where the seller's solicitor knows a related transaction depends on completion: courts have occasionally found duties where reliance was both foreseeable and specifically known, though Steel narrows the field.
The scope of recoverable loss is then governed by the SAAMCO principle, refined in Hughes-Holland v BPE, which distinguishes information cases from advice cases. For the solicitor-specific application see SAAMCO for solicitors.
Third-party claims under White v Jones, Dean v Allin & Watts and the conveyancing exceptions are foreseeable exposures for solicitors' practices. The SRA Minimum Terms and Conditions require cover for civil liability arising from private legal practice, which captures these heads of claim. Firms handling wills, probate, conveyancing or lender work should expect their PI insurer to test the file for third-party reliance points at notification. Apex Insurance Brokers arranges solicitors' PI cover that meets the SRA MTC for firms in England and Wales, and the LSS Master Policy position for firms in Scotland.
Apex Insurance Brokers Limited is authorised and regulated by the Financial Conduct Authority. Firm reference number 724952. This entry is general information, not advice on any particular policy.