The
ICLR has provided a summary for the recent
Court of Appeal decision
Newcastle International Airport Ltd v Eversheds LLP [2013] EWCA Civ 1514: see
here. The headnote reads: "Where solicitors were retained by a company to draft new contracts between the company and its executive directors the solicitors breached their duty of care to the company by simply carrying out instructions given by the directors on behalf of the company".
In the circumstances of the case, the court held that the solicitors' duty of care required them to give express, separate advice to the chair of the company's remuneration committee regarding the nature and effect of the changes made in the contracts. In his judgment,
Lord Justice Rimer stated (paras. [80] and [81]):
I readily accept that in a conventional case in which a company authorises one of its executives to instruct a solicitor in relation to a company matter, being one in which the executive has no personal interest conflicting with that of the company but can simply be regarded as a human organ of the company, there will ordinarily be no need for the solicitors to give advice as to the matter the subject of their instruction to anyone other than the executive. Advice to him will stand as advice to the company. That, however, was manifestly not this case".
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