Solicitors owe their clients duties from two distinct legal sources at once. The retainer creates a contractual duty; the solicitor-client relationship also gives rise to a duty of care in tort. The two run in parallel, and the consequences for professional indemnity cover are significant, particularly around limitation and run-off cover long after a file has closed.
The retainer is the contractual anchor. It defines the scope of instructions, the standard of service, any agreed limitations on liability, and the point at which the relationship begins and ends. Breach of the retainer is actionable in contract, with limitation running from the date of breach under section 5 of the Limitation Act 1980. The retainer is also the document the SRA Code of Conduct for Solicitors 2019 expects to reflect the client's needs and objectives.
Contract is often thought of as the primary route to a solicitor's liability. In practice, tort has become at least as important, because of what happens to limitation once the retainer has ended.
The House of Lords in Henderson v Merrett Syndicates Ltd [1994] UKHL 5 confirmed that a professional who assumes responsibility for another's economic interests can owe a concurrent duty of care in tort, even where the relationship is governed by contract. A claimant may frame the claim in whichever route gives the more favourable outcome, subject to the terms of the contract itself.
For solicitors, the principle was recognised earlier. In Midland Bank Trust Co Ltd v Hett, Stubbs & Kemp [1979] Ch 384, Oliver J held that a solicitor who negligently failed to register an option owed the client a duty in tort as well as contract, and that the two duties existed side by side. Bell v Peter Browne & Co [1990] 2 QB 495 later applied the same reasoning to a solicitor who failed to protect a client's beneficial interest following a matrimonial transfer, treating the failure as a continuing breach with tortious as well as contractual dimensions. Together, these authorities put beyond doubt that a solicitor's duty in tort is not swept aside by the retainer.
Limitation is where the concurrent-duty principle bites hardest. In contract, time runs from the breach. In tort, it runs from the date the cause of action accrues, which in a negligence claim is typically the date damage is suffered, not the date of the negligent act. Section 14A of the Limitation Act 1980 adds a further three years from the claimant's date of knowledge, subject to the fifteen-year longstop under section 14B.
The result is that a solicitor's exposure can run well beyond the closure of the retainer. A contract claim may be time-barred while a tort claim, framed by reference to when the client reasonably knew the material facts, is still live.
Worked example. A solicitor drafts a shareholder agreement for a client in 2014. The retainer closes on completion. In 2022, the client discovers that an ambiguity in the drafting exposes them to a dispute that costs £180,000 to litigate. The six-year contract limitation period expired in 2020, so a claim in contract is out of time. But under section 14A, the tort limitation clock only started running when the client acquired the relevant knowledge in 2022, and the section 14B longstop does not fall until 2029. The tort claim is viable. The solicitor's current PI policy, or their run-off cover if the firm has closed, must respond.
Long-tail claims of this kind are one of the reasons the SRA Minimum Terms and Conditions require six years of run-off cover after a firm closes, and why the size of that liability tail should inform every closure decision.
Firms sometimes ask whether the tortious duty can be contracted out of by careful retainer drafting. In principle, parties can define the scope of the duty of care by contract, and a clearly drafted limitation of scope will bind the tort duty too. But blanket exclusions are treated with suspicion, and the SRA MTC prohibit exclusions that would reduce cover below the minimum. For consumer clients, the Consumer Rights Act 2015 imposes further constraints on unfair terms, and the Unfair Contract Terms Act 1977 continues to apply to business clients. A solicitor cannot use a retainer to shrink liability below the level a fair reading of the professional relationship implies.
Three points follow for any firm managing PI risk. First, closed files are not closed exposures — a former client's contact about historic work should be treated as a potential circumstance under the current policy. Second, run-off cover matters, because the six-year MTC run-off is the vehicle through which most late-notification tort claims are handled once a firm has closed. Third, the retainer should be as clear as possible about scope; the tort duty follows the scope the parties reasonably assumed, and ambiguity widens the exposure.
Further reading on the limitation framework is set out in the note on section 14A of the Limitation Act 1980, and the underlying authority is discussed in the entry on Henderson v Merrett and concurrent duties. The broader PI position for law firms is set out in the solicitors' PI insurance guide.
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.