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A firm’s retainer cannot be transferred to another firm should the initial firm be taken over, the High Court has ruled in an ongoing professional negligence case currently being pursued against Pinsent Masons.
It is the latest ruling in an ongoing battle between the firm and claimant Shepherd Construction.
Shepherd alleged that Pinsent Masons and its predecessor firms failed to give adequate advice on the effectiveness of ’pay when paid’ clauses and the impact of The Enterprise Act 2002 on those clauses.
In this latest court outing Shepherd had sought to amend the particulars of the claim. It contended that its relationship with the firm and its legacy practices, including pre-LLP Pinsent Masons and Masons, constituted one relationship - or one retainer - for the firm.
Under this ’single contract’ they alleged that advice given in relation to various forms of construction contracts used by Shepherd should have been reviewed at a later date as part of the continuing duty to advise of changes in the law.
Pinsents responded by attempting to have the amendment struck out.
Ruling, Mr Justice Akenhead found in favour of the firm, leaving counsel for Shepherd to address the extent of its claim. The judge stated that it would be “commercially and professionally worrying if professional people are to be held responsible for reviewing all previous advice or indeed services provided”.
Keating Chambers’ Paul Darling QC and Simon Hughes QC were instructed by Nabarro partner Martin McKervey for the claimant.
Beale and Company senior partner Antony Smith instructed Roger Stewart QC of 4 New Square for the firm.
The company originally alleged that a contract drawn up by the firm relating to a joint venture agreement between Modus and CIREF that created Trinity Walk Wakefield left it liable for subcontractor fees.
It had attempted to avoid paying the fees, but in June 2009 the High Court found it liable.
The Court of Appeal later reaffirmed the first instance decision, holding that Shepherd Construction could not withhold payment on the basis it had a ’pay when paid clause’ in its contract with the subcontractor.
The company is now pursuing Pinsent Masons over that clause, which it says became invalid when the Enterprise Act came into being in 2002.