SAAMCO Realigned: Scope of Duty and Recovery of Damages for Economic Loss

The extent of the responsibility assumed by a professional adviser, and the extent of their liability if they fail to act with reasonable care, have been the subject of many a dispute between professional advisors and their clients.

The judgment of the UK Supreme Court in Manchester Building Society v Grant Thornton UK LLP [2021] UKSC 20 has provided important guidance regarding the proper approach for determining the scope of duty and the extent of liability of professional advisers in the tort of negligence. Together with the judgment of the same expanded constitution of the court in the clinical negligence case of Khan v Meadows [2021] UKSC 21, this is the most significant decision on liability for professional negligence since the House of Lords' decision in South Australia Asset Management Corporation v York Montague Ltd [1997] AC 19 ("SAAMCO").

The divergence of opinion about SAAMCO and the scope of duty principle served to emphasise to the court the importance of seeking to arrive at an authoritative view.

You can read Vivek Kapoor's full post on our Commercial, Construction & International Arbitration Blog here.