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Excessive Courtroom finds no obligation owed to traders by barrister advising scheme promoter

Judgment was handed down by Zacaroli J at present in McClean & Others v Thornhill [2022] EWHC 457 (Ch).

The choice can be of curiosity to skilled legal responsibility insurers, authorized practitioners, and litigation funders, notably these concerned in tax-related skilled negligence claims.

The traders in a collection of movie finance tax schemes sued the tax QC who had ready Opinions for the promoter of the schemes, which have been then shared with all potential traders. The Claimants asserted that the tax QC assumed a third-party obligation to them. The Courtroom disagreed, discovering the QC owed no such obligation, and that even when he had, the views he expressed within the Opinions weren’t unreasonable.

The Courtroom accepted that the Claimants had a reputable start line for an assumption of accountability, as a result of Mr Thornhill QC consented, unequivocally and in writing, to his opinions being shared with potential traders. Nevertheless, on correct evaluation there was no assumption of accountability: the potential traders had been beneficial to take (and all warranted that they’d taken) their very own recommendation; and as well as, they might solely have gained entry to the schemes via an IFA, and it was cheap to anticipate that the IFAs would both have given or procured the required recommendation.

The judgment is hanging for the Choose’s tax evaluation undertaken for the needs of figuring out the breach points. In Zacaroli J, the events have been lucky to have a Choose who additionally sits within the Higher Tribunal (Tax and Chancery Chamber). He eschewed the Claimants’ invitation to deduce that Mr Thornhill QC’s recommendation should have been improper from the truth that the Claimants felt obliged to settle with HMRC in 2017; and as a substitute, re-immersed himself within the contemporaneous 2002 – 2004 widespread legislation jurisprudence (and HMRC’s method to movie finance tax schemes); that being the context through which these schemes have been conceived by Scotts and Mr Thornhill QC suggested. It’s trite that that should be the Courtroom’s function in assessing the reasonableness of recommendation given practically 20 years earlier, however it’s reassuring for defendant professionals to see that job faithfully carried out in apply.

Herbert Smith Freehills Accomplice Will Glassey (while a companion at his earlier agency Mayer Brown) acted for the profitable Defendant Andrew Thornhill QC. His full case be aware will be accessed right here.

Counsel instructed on behalf of Mr Thornhill QC have been from Brick Courtroom Chambers, led by Tom Adam QC.  Mr Adam QC’s junior at trial was Max Schaefer.  The Brick Courtroom group additionally included Daniel Piccinin and Chintan Chandrachud, and additional specialist tax enter was additionally supplied by Conrad McDonnell of Grey’s Inn Tax Chambers.

For any inquiries about points regarding legal professionals’ skilled negligence within the UK, please contact Will Glassey, Paul Lewis, David Reston or Antonia Pegden, or your normal Herbert Smith Freehills contact.


Will Glassey

Antonia Pegden

Paul Lewis

David Reston



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