Wragge Lawrence Graham & Co

UK 200 2013 position: 25

The importance of setting out the scope of a retainer and an adviser’s duty of care

The case of Richard Gabriel v Peter Little, High Tech Design & Build Ltd, Whiteshore Associates Ltd, BPE Solicitors, BPE Solicitors LLP ([2013] EWCA Civ 1513) has highlighted the importance of engagement letters in clarifying the scope of a professional retainer.

Mr Gabriel lent the sum of £200,000 to Whiteshore, secured on a property known as Building 428. The facility letter provided for repayment of the principal sum, together with an additional ‘return’ of £70,000, in March 2009. Mr Little owned a 50 per cent share of Whiteshore and he was a director of the company. BPE acted for Mr Gabriel in relation to the loan transaction.

The facility letter that had been drawn up by BPE stated that the purpose of the loan was ‘to assist with the costs of the development of the property’. However, the money was actually used by Whiteshore to purchase the property from High Tech (Mr Little’s principal company)…

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