No retainer between law firm and businessman in £2.5m dispute

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Foster: Unsatisfactory evidence

There was no express or implied retainer between a Buckinghamshire law firm and a businessman with a “colourful commercial career” suing it for £2.5m in damages, the High Court has ruled.

DLS Law, based in Milton Keynes, argued that “having lost out on a business deal”, Sean McDonnell “cast around to find a person from whom he may recover what he claims he has lost”.

Mrs Justice Foster said DLS had a history of assisting Mr McDonnell with both corporate and personal matters over the course of around three years, describing his career as “colourful”, with “liquidations, bankruptcies, criminal proceedings by the Revenue and threats of foreclosure”.

She said he was “plainly by temperament an entrepreneur and a taker of commercial risks” with “a wide variety of advisors available to him” and there was evidence that he had “at least one other firm of solicitors involved in his affairs” at the same time as DLS.

The court heard that Mr McDonnell was a businessman in his early 70s with “particular interests” in waste disposal and land.

He claimed damages from DLS for failing to protect him against the loss of opportunity to benefit from a contract to buy just over four acres of land near Aylesbury in Buckinghamshire.

He argued that not only did he lose out on the deal to purchase valuable land with which he had been involved for a number of years, but it was also later transferred at an undervalue with a cut going to the director of the corporate vehicle, Arc, which Mr McDonnell was using for the deal; though he had a 70% interest in Arc, he was not a director of it.

Mr McDonnell claimed he missed out on his share of the proceeds of that sale. He argued that he instructed DLS to draw up for him a deed of trust to protect his interest, but DLS did not do so, nor did it give him any other advice on how to protect his interest in Arc.

DLS argued that Mr McDonnell did not provide an “express instruction” to advise, there was no retainer and he was not their client at the relevant time.

Foster J said that in the light of the “stark conflict of evidence as to the central issue of instruction to DLS”, it was “very important” to form a view of Mr McDonnell as a businessman, and also, whether the court could regard him as “reliable and a witness of truth”.

He was “astute, intelligent and very experienced” but she concluded that his evidence was “most unsatisfactory on the important matters in issue, including whom he spoke to, and what he said to them”.

The judge said she had the impression that Mr McDonnell “tailored his answers entirely to what he thought were the possible difficulties” in convincing the court that he had instructed the law firm.

“I gained the impression Mr McDonnell would say whatever it took to get himself off the hook in respect of difficult questions which suggested he had not given the instruction he claimed.”

Foster J found that Arc was the law firm’s client; it was “not credible” that, had he believed an instruction had been ignored or forgotten, Mr McDonnell would not have raised it.

She said the series of signed client-care letters where Mr McDonnell “chose to be a client stand in contradistinction to the absence of such a document here”, where Arc signed as the client.

There was no express or implied retainer, nor did DLS owe him a tortious duty of care, she concluded, dismissing the claim.

“[Mr McDonnell] had a history of presenting the issues he wished to be dealt with squarely, of asking for such advice as he needed, to be resolved in a manner that he chose. He was not a client of the firm for the land transaction of Arc, and the duties asserted were not owed to him.”