Solicitors could be at greater risk from professional negligence claims for failing to warn clients of the commercial dangers of transactions following a House of Lords decision last month, a leading insurance lawyer warned last week.

Graham Reid, partner at City firm Reynolds Porter Chamberlain, said solicitors and other professionals could be found negligent for failing to warn of the underlying risks involved in a transaction even if a warning would not have stopped the client from going ahead with a similar deal at a later date anyway.


Mr Reid said that the recent judgment in Chester v Afshar [2004] UKHL 41, a clinical negligence case, could have worrying implications for professional advisers. The case concerned a surgeon who failed to warn the patient of the small risk involved in a back operation, which later resulted in nerve damage. The House of Lords found in favour of the patient even though she had not claimed that the warning would have prevented her from having the operation altogether - only that she would not have had it on that particular day.


Mr Reid said: 'It is certain that someone will try to extend the arguments in Chester to non-medical situations... There is an argument that doctors and informed consent amounts to a special situation. But other professions warn about financial risk - how can a distinction be made between them and doctors?


'This judgment could be applied to a client who says that they would not have taken out a lease on one particular warehouse if they had received general advice on the danger of taking commercial leases - even though if they had not chosen that warehouse, it would have been another.'