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“Sharing is caring” – Although don’t expect a duty of care to always arise for shared professional advice – McClean and others v Thornhill QC [2022] EWHC 457 (Ch)

April 2022
Joe Eizenberg and Sarah Hinton

In the recent case of McClean and others v Thornhill QC, the High Court ruled that no duty of care was owed by the defendant tax QC to the claimant investors for professional tax advice shared with the Claimants by the promoters of film financing schemes. The case illustrates that it will only be in exceptional circumstances that professionals will be deemed to owe a duty of care to those other than their clients when advice is shared. This is an important case for professional indemnity claims more generally due to its detailed consideration of when a professional has assumed responsibly, and a duty of care is owed.

The Facts

The Claimants were investors in a group of film financing schemes promoted by a third-party company known as “Scotts”. Scotts promoted the schemes on the basis that investors would be entitled to generous tax relief in investing in the schemes. The defendant was a leading tax barrister, Andrew Thornhill QC (“the Defendant”), who provided advice to Scotts confirming the beneficial tax consequences of investment (“the Opinions”).

The schemes were promoted to potential investors via an information memorandum (“IM”) which included, with the Defendant’s consent, his Opinions being made available to investors if they requested them. HMRC subsequently refused the tax reliefs claimed by the investors in the schemes and all the Claimants agreed settlement with HMRC.

The Claimants then brought a claim for a combined amount of £40m against the Defendant for breach of duty of care. They claimed that they relied on the Opinions that the Defendant gave to Scotts (and were made available to them) and the Defendant owed them a duty of care in relation to that advice. They claimed that the Defendant breached his duty of care in negligently confirming the beneficial tax consequences of investment and failing to advise of the clear and significant risks of the schemes being challenged by HMRC.

There were a number of common issues which the High Court considered it could give judgment binding on all the Claimant investors. The issues were: (i) duty of care; (ii) breach of duty (iii) reliance and causation; (iv) loss; and (v) limitation.

The purpose of this article is to explore the High Court’s findings in relation to whether the Defendant owed a duty of care to the Claimants, which is of course relevant and of interest to professional indemnity claims more generally.


In arguing a duty of care was owed, the Claimants put great weight on the following facts:

  • The Defendant gave his advice in knowledge that it was to be available to potential investors and did not insist that any disclaimer of responsibly was inserted into his Opinions;
  • He knew his advice was of critical importance to any potential investor, namely the likelihood of them obtaining the tax benefits which the schemes promised.
  • He was aware that potential investors were likely to take comfort from the fact that he, as a leading expert in the field, was named as tax adviser to Scotts and had given positive advice on the prospects of the tax benefits being achieved.
  • There was no conflict of interest between the Claimants and Scotts as both had an interest in the tax benefits being achieved.

As such the Claimants argued that the Defendant had assumed responsibly for his advice and owed a duty of care in accordance with the established principles of Hedley Byrne & Co Ltd v Heller & Partners Ltd [1964] AC 465.

The High Court did not agree. It held that the Defendant did not owe a duty of care to the Claimants. In coming to its conclusions, the Court relied on more recent authorities in this area, in particular, the Supreme Court’s decision in NRAM Ltd v Steel [2018] UKSC 13. Observing that decision, the Court stated that it is clear that a representor is not to be held to have assumed responsibility towards the representee unless:

  • It was reasonable for the representee to have relied on what the representor said; and;
  • The representor should reasonably have foreseen that he would do so.

Assessing the above objectively the Court pointed out that Scotts and the Claimants were on opposite sides of the transaction (seller/buyer). The Defendant’s client was Scotts and this was clear to potential investors. In addition, Scotts’ IM advised potential investors to consult their own tax advisers and no investor could invest without warranting that they had relied only on their own independent advice. Whilst the Defendant’s Opinions did not contain a disclaimer, the Court stated that they could only be accessed via the IM and must be seen in the context of all the information provided to potential investors. Other factual observations by the Court included the marketing of the schemes, which was targeted at high-net-worth individuals for the very purpose of avoiding tax. It would be reasonable to assume that those investing would already have their own specialist advisers to consult on the merits of the schemes and indeed introduction to the schemes had to be via IFAs. The Court stated that it would be “a nonsense” to accept that because the Defendant was one of the leading tax silks, there would be no point in a potential investor getting their own advice. The Court stated that an adviser, asked by a potential investor for their advice (in accordance with the warranty), could not reasonably advise that the schemes would achieve the tax benefits because that was the Defendant’s opinion. It would be the adviser’s duty to either provide the advice on the tax aspects of the scheme or assist the investor in obtaining independent advice from a suitably qualified specialist and it was reasonable for the Defendant to expect this.

The Court held that on an objective assessment of the facts above, the Claimants could not reasonably rely on the Defendant’s advice without making their own independent inquiry, and that the Defendant could not reasonably foresee that they would do so.  As such the Defendant had not assumed responsibly and did not owe the Claimants a duty of care.


It appears entirely correct that professionals should not generally be deemed to owe a duty of care to those “on the other side” of a transaction simply because their advice is shared with them. Similarly, particularly where there is a clear disclaimer or warranty confirming that advice should not/has not been relied upon, it appears correct that a representor should not generally owe a duty of care in relation to their statement.  We say “generally” because there will of course be exceptions, where a duty of care may be owed, nonetheless. When these exceptions will arise will be fact specific and is therefore difficult to pinpoint. However, in this case, the known and clear presence of other third party advisers (the schemes could only be marketed via independent professional advisers), who could have given advice on the Opinions, was highly relevant to the Court’s objective analysis of the two key questions – whether it was reasonable for the Claimants to have relied on what was communicated to them by the Defendant and should the Defendant have reasonably anticipated that the Claimants would so rely?

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