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Shepherd Construction has lost the first round of its 拢10m High Court case against its own lawyer Pinsent Masons.

In a highly unusual step, Shepherd last year launched a legal claim against Pinsent Masons alleging 鈥渘egligence鈥� in the drafting of its contracts and arguing that the law firm owed it a 鈥渄uty of care鈥� to advise it of the impact of new contract law.

The North Yorkshire-based contractor had been left with costs of more than 拢10m because of having to pay subcontractors working on the 拢210m Trinity Walk shopping centre in Wakefield after its client, Trinity Walk Wakefield, went into administration in 2009.

锘縏here is something worrying if professionals are to be held responsible for reviewing all previous advice

Mr Justice Akenhead

Pinsent Masons had drafted a 鈥減ay-when-paid鈥� clause in the late nineties to protect Shepherd from such an event, but had not updated it to take account of changes the 2002 Enterprise Act, meaning Shepherd was forced to pay out on its subcontracts.

However, in a judgement made last week on one of its key arguments, Mr Justice Akenhead ruled against Shepherd, arguing that there was no evidence of 鈥渟ome overarching general retainer鈥� by which Pinsent Masons was required to review all its previous advice, despite the longstanding relationship between the two firms.
鈥淭here is something commercially and professionally worrying if professional people are to be held responsible for reviewing all previous advice or indeed services provided,鈥� Akenhead said.

鈥淚n the field of architects and engineers, their retainers may require them to keep under review designs which they had produced during the course of those retainers. If during the defects liability period an architect either ascertains or should ascertain that the design [鈥�] is defective, possibly in the light of new practice, it may well be that his or her retainer requires him or her at least to raise this with the client.

鈥淗owever, the fact that the architect or engineer has a number of commissions with the particular client would not mean [鈥�] they must review the designs on completed commissions.鈥�

Shepherd had argued there was a 鈥渟ingle contract鈥� with Pinsent Masons because of an ongoing and close relationship between the two companies and the fact that it dealt with largely the same individuals as the law firm evolved over the years.

The judge said: 鈥淚t is going to be difficult in most cases to imply a single contract or general retainer simply because there is a long-standing professional relationship between solicitor and client.鈥�
The case continues.