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Changed circumstances

If a piece of advice is correct when given, but later becomes obsolete due to a change in circumstances, is there a continuing duty to advise the recipient? This was the question the court had to consider when Shepherd Construction Ltd brought a claim against their solicitors, Pinsent Masons LLP, following the outcome of an earlier case, William Hare Ltd v Shepherd Construction Ltd [2010] EWCA.

In that case, the court found that a “pay when paid” clause in Shepherd’s standard form of sub-contract did not relieve Shepherd of their obligation to pay their subcontractor, Hare, in a situation where the upstream payer (Trinity Walk Wakefield Limited) went into administration by passing a resolution of its board of directors. The wording of the sub-contract stated that Shepherd was not obliged to make payment where an administration order was made against Trinity under part II of the Insolvency Act 1986, but in this case there was no order: the directors had simply passed a resolution. More…