League: solicitors not under a duty to 'review commercial considerations that underlie a deal'

The Football League failed in its £140 million negligence claim against Hammonds' predecessor firm Edge Ellison last week - in a decision that will provide comfort to solicitors acting on commercial transactions.


Mr Justice Rimer confirmed that solicitors are not under a duty to 'review the whole range of commercial considerations that underlie a particular deal'.


The Football League had claimed that Edge Ellison - which was represented by City firm Barlow Lyde & Gilbert - was in breach of duty for failing to protect its commercial interests during negotiations with Ondigital, which became ITV Digital, for the licensing of its broadcasting rights in 2000.


It claimed that the law firm should have advised the league's commercial committee to consider seeking parent company guarantees from ITV's ultimate owners, Carlton and Granada. The Football League was left with a substantial loss when ITV Digital collapsed in 2002.


The judge said the commercial committee, which was made up of experienced businessmen, had been well aware of the potential risks of corporate insolvency, and had taken an implicit decision not to seek guarantees from the parent companies. He said Edge Ellison had no obligation to advise the Football League to consider parent company guarantees in these circumstances.


Judge Rimer said: 'Is the solicitor supposed to review the whole range of commercial considerations that underlie a particular deal, work out which ones he is concerned the client may [the judge's emphasis] not have given sufficient thought to and remind him about them? In my opinion the answer is no'.


Sarah Clover, head of Barlow Lyde & Gilbert's solicitors' liability practice, said: 'This decision confirms that solicitors cannot be expected to underwrite the success of their clients' commercial transactions, or to advise them of things they know already.'


The Football League, which was advised by Mayer Brown Rowe & Maw, won nominal damages of £4 for breaches of contract in which no substantial damages were suffered. It was ordered to pay 90% of Edge Ellison's costs.


Football League chairman Lord Mawhinney said: 'We are obviously disappointed by this verdict. Subject to considering possible grounds for appeal the Football League will draw a line under this matter and move on'.