Hughes-Holland v BPE Solicitors

The appeal is brought by the trustee in bankruptcy of Mr Richard Gabriel against BPE Solicitors, a firm of solicitors, and Mr Peter Little. Mr Gabriel had advanced £200,000 to Mr Little for the development of a disused heating tower, Building 428. The loan was secured by a charge over the property. The appeal concerns the liability of BPE, who drew up the loan documentation, for damages for breach of duty in negligence. The central issue was whether BPE owed a duty to protect Mr Gabriel against the risks of the development, which went disastrously wrong, or whether the scope of their duty was limited to the accuracy of the information that they supplied to him. The trial judge held that BPE was liable for the entire loss of the loan. The Court of Appeal, however, held that the loss was not within the scope of BPE’s duty and that the damages should be reduced to nil. The appeal to the Supreme Court was allowed. The Supreme Court held that BPE had no duty to protect Mr Gabriel against the risks of the development. Their duty was limited to the accuracy of the information they supplied to him. As the loss was not within the scope of their duty, it followed that BPE was not liable for any damages. The appeal was dismissed.