Hughes-Holland (in substitution for Gabriel) v BPE Solicitors [2017] UKSC 21 is the leading post-SAAMCO authority on the scope of a professional's duty of care. The Supreme Court, with Lord Sumption giving the leading judgment, used the appeal to restate the principle first set out in South Australia Asset Management Corporation v York Montague and to address the slippage that had crept in over the two decades since.
The facts were modest. Mr Gabriel lent £200,000 to a developer on the strength of a belief that the loan would fund building works on a disused heating tower. BPE Solicitors acted for both parties. The loan documents did not in fact direct the money to construction; the funds were used to discharge earlier obligations of the borrower, and the project never proceeded. The borrower defaulted. Mr Gabriel sought to recover the full sum from the solicitors on the basis that, but for their failure to point out what the documents really did, he would not have lent at all.
At first instance the judge awarded the lender his full loss. The Court of Appeal reversed that result, holding that the loss flowed from the commercial failure of the project rather than from anything the solicitors had got wrong about the documentation. The Supreme Court dismissed the further appeal and took the opportunity to revisit SAAMCO directly.
Lord Sumption accepted that the labels Lord Hoffmann had used in SAAMCO — the contrast between "information" and "advice" — had been a source of confusion. They were, he said, descriptive shorthand for two ends of a spectrum, not a binary classification into which every retainer must be forced. The real question is the scope of the duty assumed by the professional: what risks did the engagement make the professional responsible for guarding against, and is the loss within that category?
On Lord Sumption's analysis, "advice" cases — where the professional is taken to have assumed responsibility for the entire decision to enter the transaction — are considerably rarer than the post-SAAMCO case law had suggested. The default position is that a professional engaged to supply information or work-product on a particular aspect of a transaction is responsible only for that aspect. If the information was correct, the professional is not liable for losses that would have occurred anyway. If it was incorrect, the professional is liable only for the loss attributable to its being wrong — not for the wider commercial consequences of the client's decision to proceed.
BPE had not been retained to advise on whether the loan was a sensible commercial proposition. Their duty was confined to drawing documents that did what was instructed. The loss came from the project's failure and the borrower's insolvency, not from anything the solicitors had misstated about the legal effect of the paperwork. The duty did not extend to the commercial outcome, so the loss was not recoverable.
The decision narrowed the field of "advice" cases substantially and remains the working framework that PI insurers and panel solicitors apply when sizing up a notification. The practical consequences are several:
The reasoning applies across the regulated professions. Solicitors handling conveyancing and finance work feel it most acutely — the relevant solicitors' PI cover often turns on whether a notification is characterised as advice or information. Surveyors valuing security for a lender sit in the SAAMCO line directly, and the position is reflected in standard surveyors' PI cover wordings. Accountants giving transaction-specific work on tax or due diligence face the same analysis when reading the aggregation language in accountants' PI cover.
Hughes-Holland stood as the leading post-SAAMCO authority until the Supreme Court returned to the area in Manchester Building Society v Grant Thornton in 2021. That later decision recast the analysis again, pushing the question of scope of duty to the front of the enquiry and treating the information/advice distinction as one factor rather than the framing device. Hughes-Holland remains essential reading because Lord Sumption's restatement is the cleanest articulation of the underlying principle.
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.