The decision of the Court of Appeal in the closely watched case of David McClean & Ors v. Andrew Thornhill KC1helpfully rearticulates the established principles governing when a duty of care may arise and the scope of such a duty. It is widely understood that any professional advice needs to be given with sufficient confidence as to allow the recipient to act upon it, but in addition, that the risks associated with that advice also need to be clearly outlined, so that the recipient is not blind to potentially adverse consequences. How this balance is navigated is difficult and only becomes more so when the recipient of the advice wants to share it with third parties to give them comfort on the issues at hand.

Factual background

In 2003, three limited liability partnerships were formed to acquire distribution rights to films. The schemes were promoted by Scotts Private Client Services Limited and Scotts Atlantic Management Limited.

The schemes were advertised to potential investors through information memoranda which, in addition to other promotional materials, explained that any investor in the schemes would be entitled to certain tax relief benefits. With more than £100 million being invested in the schemes, the potential tax benefits that could be sought amounted to almost £40 million.

Andrew Thornhill QC (as he was at the time) was engaged by Scotts to provide advice on the tax benefits, and Thornhill confirmed in a letter to Scotts that there was nothing inconsistent between the information memoranda and his advice on the tax benefits. Thornhill also consented to Scotts naming him as their tax adviser in the information memoranda and for his advice to be shared with any potential investor in the schemes.

The tax benefits were dependent upon the schemes meeting certain statutory tests. In 2004, Her Majesty's Commissioners of Inland Revenue opened an investigation into the schemes. The opening of enquiries into each of the schemes was treated by Her Majesty's Revenue & Customs (HMRC) as an enquiry into each member of the schemes. It was determined by HMRC that the schemes did not meet the statutory tests necessary to achieve the tax benefits, and, in 2017, the investors in the schemes entered into a settlement agreement with HMRC.

The investors in the schemes brought a claim against Thornhill in 2018 on the basis that he owed the investors a duty of care, which he had breached by negligently advising on the tax benefits of the schemes. It was claimed that if Thornhill had acted competently, then he would not have endorsed the tax benefits of the schemes, nor accepted being named in the information memoranda promoted by Scotts, and – as a result – the investors would not have invested in the schemes.

Ten of the claimants were selected to be taken forward, with the remaining claims (more than 100) being stayed pending the outcome of the sample cases.


There were several issues for the High Court to determine, but the most salient were:

  • Duty of care: Had Thornhill assumed a duty of care toward the investors in the schemes?
  • Breach of duty: If a duty of care existed, then had Thornhill breached it through the provision of negligent advice?
  • Causation: Did the investors rely on Thornhill's advice to invest in the schemes, and, absent that advice, would they have invested regardless?

High Court decision

Duty of care

The High Court considered that the test for liability resembled that found in Hedley Byrne2 (as amended by Steel v. NRAM3). Namely, that liability depends on whether it was reasonable for the investors to have relied on what Thornhill said, and whether Thornhill should reasonably have foreseen that they would do so without independent inquiry. When considering these questions, the High Court found it particularly persuasive that the information memoranda explicitly advised investors to seek their own tax advisers in respect of the tax benefits, and that no investor was able to subscribe to the schemes without warranting that they had relied only on the advice of their own advisers.

Accordingly, it was reasonable for Thornhill to assume that the investors would seek independent advice. The claims were therefore dismissed on the basis that Thornhill had not assumed responsibility for – and therefore did not owe the investors a duty of care in respect of – his advice on the tax benefits of the schemes.

Breach of duty

The High Court also explored whether a duty of care would have been breached in any event if one were to exist. In particular, it considered whether it was a breach of this theoretical duty of care for Thornhill to not have warned the investors of the potential risks associated with the tax benefits.

The High Court referenced several authorities, including a passage from Queen Elizabeth's School Blackburn Ltd & Ors v. Banks Wilson (A Firm)4 that: '[I]t behoves a solicitor to urge caution and to point out risks to a lay client even if they would perhaps have been obvious to a fellow lawyer. The extent to which he has such an obligation must clearly depend upon the facts in the particular case'. Therefore, the question of whether an adviser is in breach of their duty of care by failing to warn is highly fact-specific, depending upon matters such as the terms of the instructions, the adviser's knowledge of the client's circumstances and sophistication, and the client's existing understanding of the issues.

The High Court held that even if a duty of care existed, Thornhill could not have been expected in the circumstances to have advised the investors in the schemes of the risks of acting on his advice.


The High Court considered causation in relatively brief terms and held that it was unlikely that any of the investors in the schemes would have acted differently even if Thornhill's opinions had included a relevant risk warning.

The investors appealed the decision.

Court of Appeal decision

The Court of Appeal dismissed the appeal. It held that it was objectively unreasonable for the investors in the schemes to rely on Thornhill's advice without making independent enquiries, and that Thornhill could not have reasonably foreseen that they would not make such enquiries. The remaining issues in the case did not fall to be determined by the Court of Appeal given this finding on the first point of principle.

However, Lady Justice Carr commented that there were multiple factors in the case that pointed to the existence of a duty of care. While these were 'not enough to get the appellants home', they should serve as a clear warning to professional advisers. Lady Justice Carr explained that specialists who voluntarily provide unequivocally positive advice to their clients with the knowledge that the advice would be made available to third parties with no disclaimer of responsibility, and that the third parties in question would 'take comfort' from that advice, 'expose themselves to the risk of a claim' on the basis that they assumed responsibility toward that third party.


None of the principles in this case will be a surprise to professional advisers, but the case underlines the importance of properly caveating advice that is given to clients – and more so, when that advice is given to third parties. It is perfectly plausible to imagine a different set of facts where a duty of care was held to exist, and professional advisers should ensure that appropriate disclaimers of responsibility are included in any advice that is to be shared broadly.

Conversely, for those seeking to rely on professional advice, it is important to establish whether you have recourse in the event that the advice provided is wrong!


1. [2023] EWCA Civ 466.

2. [1964] AC 465.

3. [2018] UKSC 13.

4. [2001] EWCA Civ 1360.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.