In brief, the facts were as follows. Wellesley retained Withers to draft a partnership agreement to admit new partners, including an investor, Addax Bank, to its existing executive search business. Wellesley instructed Withers that Addax should have an option to withdraw half its capital after 42 months. As executed, the agreement in fact granted Addax the option to withdraw half its capital at any time within the first 41 months. The global financial crisis which followed the Lehman Brothers collapse adversely affected Addax, which in May 2009 exercised the option and called for the repayment of half the capital. Wellesley protested to Withers that Addax was not, to its understanding, entitled to do this. Withers advised that the relevant clause must have been amended by Addax during the negotiation of the partnership agreement and Wellesley therefore repaid the investment. Withers subsequently learned that the error was their own but failed to reveal this to Wellesley.

It was common ground that Withers owed Wellesley concurrent duties in contract and in the tort of negligence. At first instance,3 Nugee J held that Withers had been negligent in their drafting, but not in their failure to reveal the origin of the error. He awarded Wellesley £1.6m by way of lost profits, the majority of which related to the profits Wellesley would have made had it used Addax’s investment to open a US office. Nugee J held that these damages were too remote to be recovered under the contractual test for remoteness but could be recovered under the more generous tortious test for remoteness. He expressed dissatisfaction, however, that the law should give two different answers to the question “for what losses is a solicitor liable if he fails to take due care in carrying out a client’s instructions?”4 but felt bound by authority5 to allow Wellesley to take advantage of the more generous rules of remoteness in tort.