Every solicitor knows the retainer defines the client relationship — the scope of engagement, the fees, the deliverables, the file. What the retainer does not do is fence off the solicitor's duty of care from anyone standing outside it. Hedley Byrne v Heller established that a duty in tort can attach to a negligent statement where the maker assumes responsibility to the recipient and the recipient reasonably relies on it. For solicitors, that principle reaches into the corners of practice that feel most casual — a quick answer at a family lunch, an off-the-record view offered to a client's spouse, an opinion letter shared with a lender at the client's request.
The retainer sets the solicitor's core contractual and tortious duty to the client. It defines who the client is, what the work covers, and where the file ends. Solicitors' PI insurers expect that floor to be documented — engagement letter, scope, exclusions, disengagement — with the SRA Code of Conduct sitting on top.
Hedley Byrne then operates as a separate route to liability. It does not require a contract. It requires an assumption of responsibility, in circumstances where the recipient's reliance is reasonable and foreseeable. The Supreme Court in Steel v NRAM [2018] UKSC 13 reaffirmed that assumption of responsibility remains the touchstone, and that the enquiry is objective — what would a reasonable person in the recipient's position have understood?
The case law shows the reach clearly. In Dean v Allin & Watts [2001] EWCA Civ 758, a solicitor acted for a borrower but knew that an unrepresented informal lender was relying on the solicitor to arrange effective security. The Court of Appeal held that the solicitor owed a Hedley Byrne duty to the lender. The lender was not the client, but the solicitor had assumed responsibility for a task the lender was plainly relying on.
The White v Jones [1995] 2 AC 207 line — disappointed beneficiaries under a negligently drafted will — operates on a related but distinct footing, extending the client's solicitor's duty to a third party the client intended to benefit. It is a reminder that third-party duties for solicitors are a routine feature of the risk landscape.
Informal advice is where solicitors get caught. A dinner-party question, a corridor conversation, a WhatsApp reply to a friend. The temptation is to help. The instinct is to caveat — "this isn't formal advice", "you'd need to instruct someone properly". Neither caveat is a defence in itself. What matters is whether, on the facts, the solicitor assumed responsibility and whether reliance was reasonable.
A solicitor acts for Mr A on the sale of a buy-to-let flat. Over lunch, Mrs A — not a client of the firm — asks about the CGT position on a separate property she owns in her sole name. The solicitor gives a quick answer: on the numbers she mentions, the gain looks within her annual exempt amount. Mrs A relies on that view and exchanges contracts on her own property the following week. It later emerges that a prior part-disposal reduced her available exemption and she faces an unexpected CGT liability.
The outcome would turn on the facts. The example shows how quickly a lunchtime remark can travel into the ambit of Hedley Byrne.
Insurers writing solicitors' PI expect file discipline that reflects the risk: clear engagement letters, scope statements identifying who the firm is and is not acting for, disengagement letters, and a culture of directing non-client enquiries to formal instruction. Where a client asks the firm to share an opinion letter with a third party, the addressee, reliance and scope are all questions the file should answer before the letter goes out.
Apex Insurance Brokers arranges PI for solicitors on that footing, and the same discipline runs through the risk conversation Apex has with accountants. The full context for solicitors' cover sits in the Apex solicitors' PI 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.