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Extent of duty to advise

08 March 2011
Issue: 4295 / Categories: Tax cases
Mason and others v Mills & Reeve (a firm), Chancery Division

The claimants were the executors and daughters of the deceased who died in 2007 during a heart procedure. A short time earlier the entire issued share capital of the deceased’s family business had been sold in a management buyout for approximately £3.5 million.

The deceased had a substantial liability to capital gains tax as a result of this disposal and inheritance tax was also due.

The defendant was a firm of solicitors appointed by the deceased and his daughters to act in relation to the management buyout.

The claimants brought an action against the defendant on the basis that in light of the deceased’s poor health it should have advised postponing the transaction until after the operation.

The High Court said a solicitor’s duty to his client was primarily contractual. The key implied term of...

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