McFarland-Cruickshanks v England Kerr Hands Solicitors Ltd

By an application dated 15 September 2020, the Claimant seeks orders striking out the Defence and Counterclaim, alternatively for summary judgment. The applications were opposed, and I heard oral argument for a day on 28 January 2021.

The Claimant is a barrister specialising in intellectual property law. The Defendant is a firm of solicitors, described in the Defence as a “high street solicitor’s practice in Birmingham”. The claim is for the balance of fees the Claimant says are due for work she did in relation to a patent action in the IPEC (“the patent action”).

The Claimant and the Defendant in this claim acted for the Claimants in the patent action, who were Andrew England-Kerr (“Mr Kerr”) and Waterside Manufacturing Limited (“Waterside”). At the time Waterside was controlled by Mr Kerr, and together they held patents relating to body armour which incorporated an inflatable life jacket. The patent action arose out of a dispute they had with BCB International (“BCB”), the holder of a licence to sell the body armour in Ecuador. BCB was accused of also selling a product which infringed one or more of the patents. Mr Kerr is also a solicitor, and England Kerr Hands and Co is effectively his firm.

The Claim Form in this claim was issued on 13 May 2020 and claims unpaid fees said to be due and owing to the Claimant. The Claimant’s billed fees totalled £53,765, of which £19,755 had been paid, leaving a balance of £34,100. A schedule of the fees billed and paid is appended to the Reply [35]. A Defence and Counterclaim verified by Mr Kerr was filed on 22 June 2020. There are two lines of defence. Firstly, that the parties had agreed that the Claimant’s fees would be capped at £50,000 plus VAT. That was said to be a fundamental term of the parties’ contractual arrangement, and that by claiming in excess of the cap the Claimant had breached the capping agreement. The Defendant’s case was that the consequence of that breach was not only that the Claimant was not entitled to more than a total £50,000 plus VAT in fees (which would be a further £30,245 plus VAT) but that no further fees were payable at all, and the £19,755 already paid was to be repaid. The Claimant’s application sought summary judgment and/or strike out on the fee capping issue. The question of whether or not there is a maximum fee of £50,000 is a question to be determined by considering the effect of the agreement made in some emails between the Claimant’s clerk and Mr Kerr. Whether the Claimant lost the right to charge any fees at all by claiming in excess of the cap is essentially a matter of law.

The second line of defence is a set off of the sums due on the Counterclaim. The principal counterclaim is for the losses the Defendant alleges it has suffered as a result of the Claimant’s breach of contract and/or negligence. The issue on this part of the application is whether the Defendant can bring a claim against the Claimant for the financial loss it suffered as a result of the Claimant’s alleged breach of contract and/or negligence, or whether it should be struck out. The central issue is whether the Claimant owes the Defendant a relevant duty.

The third element of the application relates to the Defendant’s counterclaim for an indemnity in relation to a claim from its lay client Waterside. The only evidence that Waterside make such a claim is an email from Mrs Kerr (its present Director) on 16

The application was supported by the witness statement of Mr Bennett, the Claimant’s solicitor, of 15 September 2020. The Defendant filed witness statements from Gordon Walker of 19 January 2021, Peter Boynton of 12 January 2021 and David Croston of 19 January 2021. Mr Walker is the Defendant’s solicitor, and his witness statement sets out its case by reference to the documents and his instructions. Mr Boynton was the solicitor at the Defendant firm dealing with the patent action. His evidence is given on the basis of his personal involvement in much of what occurred, although a lot of his evidence about the fee cap is drawn from the documents and his instructions. Mr Croston is a Patent Attorney. He gives evidence in relation to the conduct of patent infringement proceedings in the IPEC. His witness statement reads like expert evidence. The Claimant objected to it but accepted that I should read it. In the event little if any reliance was placed upon it. Finally, the Claimant filed a short witness statement in reply dealing with some discrete factual issues.

Whilst the application bundles were extensive, there are in fact very few documents which I need to consider. I refer to them by reference to their page number.

The approach to an application of this sort is well established. The power of the Court to strike out a statement of claim is set out in CPR r 3.4(2). The relevant sub rule is (a):

In relation to the question of whether the Claimant owed the Defendant a relevant

Mr Virgo referred me to the need to exercise particular caution when the issues under consideration concern a developing area of law. He referred to the judgment of Lord Browne-Wilkinson in Barrett v London Borough of Enfield [2001] 2 AC 550 @ 557E-G:

CPR Part 24 sets out the test for summary judgment:

The general principles on such an application are set out in the judgment of Lewison J (as he then was) in EasyAir Limited v. Opal Telecom Limited [2009] EWHC 339 (Ch) at [15] (emphasis added):

The relevant background is not in issue. Mr Kerr and Waterside instructed the Defendant to represent them in the claim against BCB, and both entered Conditional Fee Agreements (“CFA’s) with the Defendant on 9 June 2015. The Claimant was first instructed to advise in writing on 11 June 2015, and she provided a written advice on 17 June 2015. She was subsequently instructed on a number of occasions to carry out specific tasks. In particular, she was instructed to draft the Reply and Defence to Counterclaim which was served on 19 July 2016.

On 14 July 2015 at 15.22 Mr Boynton emailed the Claimant’s clerk asking Counsel to deal with 3 identified pieces of work and asked him to contact Mr Kerr to agree fees. At 19.07 the Claimant’s clerk emailed Mr Boynton and Mr Kerr [113] with estimates for the 3 pieces of work.

On 16 July 2015 Mr Kerr spoke with the same clerk about fees. Mr Kerr gave no direct evidence of that conversation, but the Defence relies on the content of the subsequent emails between Mr Kerr and the clerk, and the evidence from the Defendant comes from Mr Boynton’s reading of those emails; see paragraph 21 of his witness statement and following [54]. The first is at 12.24 from the Claimant’s clerk [115] to Mr Kerr:

Pausing there, the estimate is for between £58,500 and £78,000. It relates to specific items of work, and as the Claimant notes, there is no reference to a Counterclaim. Mr Chelmick also drew attention to the fact that neither of the CFAs the lay clients had entered into with the Defendant referred to a Counterclaim either. The Defendant’s case is that the parties were aware that BCB may “counter-attack” and question the validity of the patents. In the event that is what happened, and BCB’s Counterclaim went to the validity of the patents. In support of that point, the Defendant referred to paragraph 4 of a Note prepared by the Claimant on 17 June 2015, and in particular to sub-paragraph (f), which expressly refers to such a possibility [81].

Nor is there any reference in this estimate to work such as dealing with Part 18 requests or withdrawing an admission – matters which actually arose in the course of the Claimant’s involvement in the patent action. There is, however, a reference to “any intermediary work up to trial” (although that may be qualified by the words which follow) and to contingency costs.

Following the email at 12.24, Mr Kerr and the Claimant’s clerk had another conversation regarding fees. Again there is no direct evidence of that conversation, but the Defendant refers to an email from the Claimant’s clerk to Mr Kerr at 15:36 [115]:

The Claimant’s case is that this email must be read in the context of the previous estimates and is to be construed as an agreement to cap the fees for the work contemplated by the estimate given on 16 July 2015. The fact that the £56,000 figure is close to the bottom of the bracket for estimated future work to trial may support that. Her case is that this cap was not intended to cover the work done to date (some £6,200), and nor was it intended to cover the work involved in dealing with a

However, the Defendant’s case goes further than a limit on fees. Claiming a sum above the cap is said to be a breach of a “fundamental term of the contractual arrangement”; see paragraph 7 of the Defence [14]. When the issue was explored in argument the case appeared to be that this was the breach of a term which excused the Defendant from further performance, and the further performance in question was payment for work already done.

Mr Boynton hints at total failure of consideration in his witness statement, but the point is not pleaded, nor did Mr Virgo submit that this was such case. That was obviously the correct course to take, for it is not arguable that this is a case of total failure of consideration. Work of value was done. Nor do I see how it can be argued that the breach of the fee cap agreement is somehow so essential to the parties’ agreement that its breach can fairly be seen by the Defendant as a substantial failure to perform the contract. The term may be a condition, and its breach may amount to a repudiation which, if accepted, excuses the Defendant from further performance. But that is not how the matter is put, and even if it were, it would not entitle the Defendant to refuse to pay for what it had already received and claim back the fees it had already paid. There is no realistic prospect of success on this second aspect of the fee cap defence.

Before turning to the central question of whether a relevant duty arises, it is helpful to identify how the Defendant says it has suffered a loss. It alleges that the Claimant was negligent in a number of respects, but there are two which are said to be relevant to the causation of loss to the Defendant. Firstly, that the Claimant was negligent in incorporating into the Reply and Defence to Counterclaim in the patent action, a document which amounted to an admission that the patent owned by Mr Kerr and Waterside was not valid (the issue is more technical than that, but that is the nub of it). The Claimant’s case is that she was not negligent, but the parties agree that is a

The causative effect of those two matters is as follows. Firstly, including the admission in the pleadings led to a situation where it presented a potential problem for the patent owners, and needed to be withdrawn. Secondly, the Claimant failed to advise that the admission “was not of any meaningful effect on the majority of the arguments on the validity of the patent and that this combined with the clear infringement of BCB would still lead [to] a victory in the litigation”. That is a quotation from paragraph 34 of the witness statement of Mr Walker, where the Defendant sets out its case on this application [10]. Hence the Defendant’s case is that the advice that the case was “hopeless” (Mr Boynton’s evidence) or “no longer viable … and should be compromised” (the pleaded allegation) was negligent, and that consequently the case was settled on “unsatisfactory terms”. The Claimant denies that she advised that the case was no longer viable as a result of the failure to withdraw the admission; see paragraph 59 of the Reply [27], and she was not asked to advise on settlement, nor was she involved in any of the discussions. But these are issues of fact which cannot be resolved on an application such as this.

From the lay client’s point of view, a loss caused by under-settling the case on the

Having identified the causative allegations of breach, I turn to the question of whether the Claimant owed the Defendant a relevant duty under the contract or at common law. The nature and scope of that duty was not defined in the Defence or in the course of the Defendant’s submissions, but it would be to exercise reasonable skill and care when supplying the Services so as not to cause the Defendant financial loss (or to that effect).

I begin with the claim for breach of contract. The contract is the “written contract” referred to in the Claim Form. The parties agree that this was made on the basis of the written standard terms and conditions of the Claimant’s chambers (“the terms”). These are based almost verbatim on the model terms produced by COMBAR and the City of London Law Society, Basis A.

Clause 1 provides for definitions and interpretation. The definitions include the following:

Clause 3 is headed “Providing the Services”. Clause 3.2 provides that:

Clause 4 is headed “Benefit of the Services”. I set out the entire clause, but it is 4.1 which is of particular importance in this case:

Basis A of the model agreement provides for the “traditional” arrangement as to fees, and consequently Clause 9.5 provides that the solicitor will pay the barrister any sums properly due.

Clause 11 is headed “Conflicts of interest”. By clause 11.1 the barrister confirms that they have no conflict of interest or other professional impediment which prevents them from acting for the solicitor or the lay client, and by clause 11.2 agrees that if that situation changes he or she will inform the solicitor immediately. Clause 11.3 provides for the circumstances in which the solicitor or the lay client might have a claim in damages against the barrister for breach of clause 11, and clause 11.4 recognises that they might have claims other than damages for such a breach; an injunction being the obvious example.

The Defendant relies in particular upon clause 12, which is headed “Liability”. I set it out in full.

Clause 20.3 also deals with the limitation of liability:

The Claimant’s case is that whilst the agreement is between the solicitor and the barrister, the services are provided for the benefit of the lay client. In other words, they are not provided for the benefit of the solicitor; see paragraphs 82-83 of the Reply [31]. Mr Chelmick submits that Clause 4.1 of the terms makes that clear; see paragraphs 48-49 of his skeleton argument. The parties to the agreement can agree otherwise, but in this case they did not. In particular he submits that: (i) the contract does not contain any duties to the solicitor in respect of their (the solicitor’s) fees; and (ii) that the COMBAR terms were not intended to change the fundamental relationship between barristers and solicitors, but to provide a mechanism by which fees could be recovered contractually, and deal with the changes in the law brought about by section 61(1) of the Courts and Legal Services Act 1990.

Mr Virgo did not deal directly with the meaning and effect of clause 4.1. He referred to the scheme of this contract, submitting that it included an explicit assumption of a duty to exercise reasonable skill and care (clause 3.2) and an obligation in relation to conflicts of interest (clause 11). He submitted that the existence of a duty owed by the barrister in contract to the solicitor was clear, and that the fact that clauses 12 and 20.3 referred to the barrister’s liability to the solicitor meant that there was no room for any doubt about that.

The question of whether or not the Claimant owed a duty to the Defendant to exercise reasonable skill and care when providing the Services is to be determined by construing the contract. The principles of construction are well established. They were recently considered by the Supreme Court in Wood v Capita Insurance Services Ltd [2017] UKSC 24; see Lord Hodge at [8]-[15], and Lord Justice Leggatt (as he then was) summarised them in his judgment in Minera Las Bambas SA v Glencore Queensland Ltd [2019] EWCA Civ 972 @ [20]:

These are not only detailed and professionally drafted terms, they follow the model terms drafted by the professional bodies representing commercial solicitors and barristers for use in these sorts of circumstances. Considerable weight is to be given to the text.

The Defendant’s case is to the effect that these terms give rise to a relevant duty. It has had a more than adequate opportunity to marshal any points it wishes to take. There was nothing in the factual background which Mr Virgo raised as relevant to the question of the construction and effect of clause 4.1, and I did not understand him to disagree with Mr Chelmick’s submission that the model terms were not intended to change the fundamental relationship between solicitors and barristers; a relationship with which the Court is particularly familiar. Some play was made of an apparent interest in the case from the Law Society. But it was unclear what that interest was, or how that affects the question of construction, and in the event the Law Society made no appearance. Having considered the submissions made to me, I am satisfied that I have the evidence necessary for the proper determination of the question. This is a short point of construction, and the Court should grasp the nettle and decide it.

I agree with Mr Chelmick that these terms are to be understood in the context of the arrangements for instructing members of the Bar, and the changes which took place after section 61 came into effect. In simple terms, the solicitor acting on behalf of the lay client, instructs the barrister. The barrister does the work for the solicitor, acting on behalf of the lay client, and is then paid by the solicitor for that work, either from funds provided by the lay client, or on the basis that the solicitor recovers the cost

The assertion that the contract provides for a relevant duty and that the provisions dealing with liability make that clear requires some examination. The duty in question must relate to services, and thus must arise from clause 3.2. That clause must be read in the context of is the agreement as a whole, and (here) in particular in the context of clause 4.1.

The provisions of clause 12 and 20.3 do not establish relevant duties. The Defendant’s case is that they are drafted in a way which recognise that the barrister has a potential liability to the solicitor. That is correct; see in particular clause 12.1, 12.3(a) and 12.4(a). Mr Chelmick submits that one such example is a claim under clause 11, and there may be others. Whilst Mr Virgo is right to point to the terms of these clauses, I am satisfied that Mr Chelmick’s approach is the right one. The fact that there may be a liability to limit does not mean that there is a liability for the breach of the duty the Defendant contends for.

For the Defendant’s counterclaim to succeed in contract, clause 3.2 is to be construed as providing for a duty owed by the barrister to the solicitor to exercise reasonable skill and care in supplying the services so as not to cause the solicitor financial loss. Neither party was able to refer me to any decided authority where such a claim had succeeded, and it was accepted that the claim was a novel one. I return to the question of novelty when considering the question of a duty at common law, but the point is relevant here because it suggests that clause 4.1 is doing no more than stating the generally understood position.

Clause 4 is headed “Benefit of the Services”. Clause 4.1 distinguishes between the solicitor and the lay client. The services are not simply provided to the solicitor, but to the solicitor acting for the benefit of the lay client. They are not provided to the solicitor acting for his own benefit, or to the solicitor on his own account and for the benefit of the lay client. My reading of the first sentence of clause 4.1 is that the services are provided for the benefit of the lay client, and the lay client alone. That construction finds support in the definition of the "Lay Client” as the person … for whose benefit or on behalf of whom the Barrister is instructed by the Solicitor to supply the Services. Those definitions reflect the traditional arrangements by which solicitors instruct barristers to provide advice and other legal services for their clients.

To read that clause as meaning that the services were provided for the benefit of the solicitor, or for the benefit of the lay client and the solicitor, or that concurrent duties of the same nature and scope were owed to both in relation to the provision of services, would not reflect the natural and ordinary meaning of the language. Nor would it be consistent with the traditional arrangements between the professions. If it were the intention to provide for the barrister to owe a contractual duty to the solicitor in relation to the solicitor’s financial interests in the litigation, then something more

It is of importance to remember that it is open to the parties to the contract to make some other agreement as to the benefit of the services. The opening words of clause 4.1 expressly provides for that. That provision underscores the limitation to who is intended to benefit from the provision of these services.

The second part of Clause 4.1 refers to the barrister and the solicitor owing a “primary duty” to the lay client, subject to their duties to the court. Again, that reflects the established position. I do not read that part of the clause as a recognition that the barrister owes the solicitor a “secondary” duty in relation to the supply of the services beyond that owed qua solicitor for the benefit of the lay client. To find a relevant duty to the solicitor in these words would be inconsistent with the first part of the clause, but it would also raise issues as to what the nature of that secondary duty was.

What are the commercial consequences? Which interpretation is more consistent with business common sense? If the Defendant is correct, the consequence is that the barrister would be liable for the losses suffered by the lay client as a result of his breach of contract in failing to exercise reasonable skill and care in supplying the services, and for the losses suffered by his professional client as a result of the same breach. It may be open to a barrister to agree to provide his services for the benefit of a solicitor, or to undertake a duty to them to exercise reasonable skill and care. But that does not accord with the underlying purpose of this instruction, which was to provide advice and other services in relation to the lay client’s case. It was not (for example) to advise so that the solicitor could decide whether or not to enter into a CFA.

In the course of argument, Mr Virgo referred to there being a number of construction cases in which concurrent claims had been made (i.e. where like duties were owed to two people at the same time). I do not know precisely which cases were being referred to, but Chitty on Contracts (33^rd ed) deals with Contracts for the Benefit of Third Parties at 18-051 to 18-069. The cases discussed there involve a number of different sets of facts, including some building cases, but none appear to be analogous to the position which would arise if the Defendant’s construction were correct. The discussion centres on the ability of those for whose benefit the contract was made to recover, even though they were not a party, or the circumstances in which a party can recover for the losses of the beneficiary. That is a different issue to the one under consideration in this case. The editors of Jackson and Powell on Professional Liability (8^th ed) consider the liability of construction professionals under the Hedley Byrne and reliance principles at 9-074 to 9-092. The authorities discussed there may have a greater relevance.

Mr Chelmick submitted that finding concurrent duties such as the Defendant contended for raised difficult issues for the barrister where the interests of the lay client and the solicitor conflicted. The barrister could not serve two masters. I agree that the Defendant’s construction has the potential to create a situation where conflict might arise. That might be answered by the provision in clause 4.1 that the primary duty is owed to the lay client, but I agree that finding concurrent duties has the potential to significantly complicate the situation. Business common sense would tend to favour the clarity which the Claimant’s construction brings.

Finally on this aspect, and to come full circle, it would be surprising if these model terms led to the imposition of a duty on a barrister which had never been found in any previous authority and changed the fundamental relationship between the professions and the lay client.

The words used in clause 4.1 read in the context of this agreement lead me to the clear conclusion that the services are not provided for the benefit of the solicitor. The Claimant’s construction is more consistent with business common sense. If the services are not provided for the benefit of the solicitor, I do not see that the solicitor can say that the barrister is liable to him in contract for any loss he (the solicitor) suffers if the barrister breaches that term of the contract. That is not what is contemplated by these terms. It goes beyond the nature and the scope of the duty in relation to the supply of services which the words provide for. I conclude that there is no relevant contractual duty owed to the Defendant by the Claimant.

The second source of a relevant duty for the Defendant’s Counterclaim is a duty at common law to a similar effect to that contended for under the terms of the contract; in other words to take reasonable care not to cause financial loss to the Defendant when supplying the services.

Despite the fact that the law of professional negligence is well developed, there is no reported case dealing with the existence of a duty such as that contended for by the Defendant. Nor is there any discussion of such a duty in any of the leading textbooks in the area. Jackson and Powell at 12-005 notes that there is limited authority on the duty of barristers to third parties – third parties in that context being those other than the lay client. Both the cases referred to by the editors in that paragraph involved consideration of a duty owed to people associated with the lay client, and who might be seen as the beneficiaries of the work. Clerk and Lindsell on Torts does not deal with the issue at all.

The only case Mr Chelmick had been able to find was the Australian case of

The case is not direct authority on the point before me, and it relates to the position of co-counsel in a case rather than the relationship between a solicitor and a barrister representing the same lay client. However, the discussion as to why such a duty should not be imposed is of some assistance, and I set out below two passages from the judgement of the Court (Winneke P, Phillips and Batt JJA) which are relevant to issues which arise in this case. The first passage relates to the court’s reluctance to create potentially conflicting duties of care.

The second passage refers to relevant policy interests:

Apart from this one Australian case, Mr Chelmick was unable to find any case, reported or unreported, in which it has been argued that a barrister owed such a duty to a solicitor, despite the existence of a duty to lay clients for work done outside court and the abolition of the immunity of advocates in Hall v Simons [2002] 1 AC 615. Mr Virgo submits that this lack of authority is to be seen in the light of the immunity barristers enjoyed until the decision in Hall v Simons. I come to the merits below, but the absence of decided authority or of other cases in which the point is being raised leads me to conclude that this is not a “developing area of law”; see paragraph 11 above.

I begin by considering the way the Defendant puts its case. In his skeleton argument at paragraph 24-25 Mr Virgo refers to three “tests” for finding a duty at common law: (i) the three-part test of foreseeability of damage, proximity and the requirement that it is fair, just and reasonable to impose a duty; (ii) the assumption of responsibility test; and (iii) the incremental approach. He submitted that whichever was applied led to the imposition of a duty. As to (i) the retainer provided a relationship of proximity; it was clearly foreseeable that if counsel negligently advised premature settlement on inadequate terms that the economic interest of the solicitor in the pursuit of the litigation would also be prejudiced, and that there was no reason in justice for shielding counsel from the consequences of their negligence by limiting the right to sue to the lay client. The solicitor would be left without a remedy. As to (ii) I note that Mr Boynton says this at paragraph 26 of his witness statement [55]:

Lord Reed considered the approach to the imposition of a duty of care, and the effect of Caparo v Dickman in his judgment in Robinson v Chief Constable of West Yorkshire Police [2018] UKSC 4 @ [21]-[30]. I refer in particular to [27] and [29]:

Mr Virgo referred to Smith v Bush [1990] 1 AC 851 and White v Jones [1995] AC 207 as examples of cases where the court has been prepared to find duties at common law to provide remedies for those who had suffered losses as a result of some professional negligence. He does so to show that it is possible for there to be a situation where a duty is owed to two different persons with different interests, rather than to argue for the incremental extension of a duty of care.

I was not taken to either case in the course of argument, but the facts of both are well known, and obviously different to the facts of this case. In Smith v Bush a valuer instructed by a building society to value a modest house for mortgage purposes was held to owe a duty to protect the prospective mortgagee against economic loss flowing from unreported defects. Lord Templeman considered that the basis for that duty of care was that the relationship between the valuer and the mortgagee was akin to contract; see at 851. Lord Griffiths considered issues of proximity, foreseeability and whether it was just and reasonable to impose such a duty; see at 865. Lord Jauncey considered that by reason of the proximate relationship between them the valuer assumed a responsibility to the mortgagee; see at 871. The important fact in that case was that it was widely recognised by valuers that purchasers relied on these reports when deciding to purchase, and that the valuer knew that this was the case. In White v Jones the Court was prepared to recognise that duties were owed to both the testator and the beneficiaries of the will. That was for reasons of justice; the only person who had a valid claim had suffered no loss, and the only person who had suffered a loss had no valid claim; see Lord Goff at 275D-275F.

Mr Chelmick submitted that this was not a case where the Court should impose a duty at common law. To do so would render counsel potentially liable for lost fees and for other consequential losses in just about every retainer. He submitted that this would be so whether or not there was a liability to the lay client for breaches of duty. He also referred to a number of other factors which pointed away from the imposition of such a duty:

Mr Virgo made a number of points in response:

It is unnecessary to engage in a wide-ranging review of the authorities to decide whether or not there is some arguable basis for a duty which would allow the Defendant to defeat the application to strike out its case. Mr Virgo accepted in argument that the nature and scope of any duty at common law would be the same as the duty in contract. I assume that by that concession he did not intend to accept that in the absence of a contractual duty, the claim in negligence would fail. But it is the fact that his client was a party to the contract with the Claimant which is the key. The Defendant may have suffered a loss as a result of the negligence of the Claimant, but unlike the Claimants in White v Jones or Smith v Bush, the Defendant in this case was a party to a contract with the person it says caused the loss. There is no reason for the court to impose a duty at common law in this situation because these parties have made a contract which provides for the relevant duty.

Nor is this a case where the law leaves a claimant (here the Defendant) without a remedy. The contract the parties made gave the Defendant the opportunity to agree with the Claimant that the Claimant would owe it a duty of care in relation to the supply of the services. The reasons of justice which might lead to a Court to recognise a duty of care at common law to provide a remedy for those who have suffered a loss

The point can also be analysed by reference to the tests Mr Virgo referred me to.

I conclude that on the particular facts of this case, the Claimant did not owe the Defendant a duty in contract or at common law in relation to the provision of the services, and that there are no reasonable grounds for bringing the counterclaim. In those circumstances it is to be struck out.

In the course of argument, the Claimant confirmed that if she succeeded in obtaining summary judgment on the claim up to the level of the cap, and the Counterclaim was struck out, that she would not pursue the balance of the claim. In those circumstances, I will give judgment on the claim for the capped sum and any interest due and proceed to deal with the costs of the action.

Following the circulation of the draft of this Judgment, Counsel were able to agree the terms of the order on the application and the consequential orders for costs. I make an order in the terms of the minute they agreed.