In professional negligence litigation the existence and extent of a duty to warn has been a thorny issue over the years. Is a professional obliged to inform their client of matters which they had not been instructed to consider? If so, what warnings do they need to give and what liability might they be assuming for advice beyond the scope of their retainer?

These are difficult questions which cause headaches to all manner of professionals. The writer recalls sitting through a two day trial while the judge squinted at grainy Google Earth printouts presented to him by counsel trying to establish that a tree surgeon who had done some work on a tree several years earlier had a duty to warn the owner that a completely different part of the tree was in danger of breaking. In that case no duty to warn had arisen on the part of the tree surgeon, principally because he had not been instructed to look at the relevant part of the tree.

The High Court in England has again considered the extent of a professional's duty to warn, this time in the context of a solicitor giving specialist tax mitigation advice: Barker v Baxendale-Walker Solicitors & Paul Baxendale-Walker [2016] EWHC 664. Mr Baxendale-Walker was a solicitor and an acknowledged expert in tax law. Among other things, he advised various clients on the establishment of Employee Benefit Trusts ("EBTs") which have made headlines on a number of occasions.

He advised Mr Barker, a successful entrepreneur, on setting up an EBT in order to avoid liabilities for capital gains tax and, ultimately, inheritance tax. The validity of this EBT, and therefore Mr Barker's ability to avoid a hefty tax bill on selling his company, hinged on the interpretation of section 28 of the Inheritance Tax Act 1984 (the "Act"). HMRC interpreted this provision differently to Mr Baxendale-Walker and challenged the validity of the EBT. A lengthy legal battle ensued which resulted in Mr Barker paying HMRC £11m.

Mr Barker then sued Mr Baxendale-Walker, alleging that his advice on establishing the EBT had been negligent. The correct interpretation of the Act was far from agreed and Roth J, whilst not ruling on its meaning, clearly favoured the interpretation of Mr Baxendale-Walker. This was supported by contemporaneous opinion from leading counsel and one of HMRC's own tax specialists. It was therefore found that Mr Baxendale-Walker had not been negligent in offering the advice he did, as it could not be said that no reasonably competent solicitor would have given that advice.

Mr Barker had also argued that, in circumstances where two interpretations of the key provision were possible, Mr Baxendale-Walker had a duty to warn his client there was a risk his advice was wrong and the provision could be interpreted differently.

The court considered that a lawyer is only expected to warn a client that their advice might be wrong if there are very strong factors suggesting an alternative construction of the law. In such cases the lawyer might be expected to give a balanced view of the possible interpretations to their client. The facts of this case did not meet that criteria, since Mr Baxendale-Walker's interpretation had never previously been challenged.

However, the court did not stop there and it nevertheless found that Mr Baxendale-Walker had a duty to warn his client, albeit the warning required was of a far more general nature. Roth J ruled that Mr Baxendale-Walker should have advised Mr Barker that, as this was a tax avoidance scheme, it was likely that HMRC may seek to challenge its validity in the future. The fact that HMRC might take issue with people not paying tax might be considered by some to be a matter of common sense, but according to the court any competent solicitor would have made this warning explicit. As it transpired, the consequences of Mr Baxendale-Walker's failure to give the warning were negated by the fact that it was held that Mr Barker would have proceeded with the EBT scheme in any event, so the claim for damages failed on causation.

It should be noted that this decision is currently being appealed.


The law on when a professional has a duty to warn their client of some risk or hazard they have (or should have) identified during the course of performing their duties has often not been consistently applied.

The starting point should always be the scope of the professional's agreed services and the duty to warn is best understood as a product of the general duty to act with reasonable care and skill when performing those services: would a solicitor/surveyor/tree surgeon etc, acting in accordance with the standards to be expected of their profession, have noticed the problem and what, if any, warning would they have given to their client?

These are all very fact specific questions and careful drafting of the professional appointment can go a long way towards minimising the risk of a professional unwittingly undertaking duties of care which are beyond the scope of their services and for which, arguably most importantly, they are probably not getting paid.


Alan Calvert


James Jerman

Senior Associate