High Court clears solicitors of responsibility in commercial decisions

Professional indemnity (PI) rates for solicitors will remain soft after last week's High Court judgment in the Hammonds £140m professional negligence case.

Frank Maher, head of PI at Legal Risk, said: "While the judgment will be a huge relief for those who would have had to pay out, it means another year of cheap PI insurance for law firms."

The Football League had alleged that the law firm Edge Ellison, which subsequently became part of Hammonds, was in breach of duty for failing to protect its commercial interests with failed broadcaster, ITV Digital.

The media provider's collapse in March 2002 left £180m still owing to the Football League.

Judge Rimer found that while Edge Ellison had committed two minor breaches of duty, "neither breach was the cause of the loss". He therefore awarded nominal damages of £2 for each breach.

Sarah Clover, head of solicitors' liability at Barlow Lyde & Gilbert, who acted for Edge Ellison, said the judgment "keeps the distinction between commercial and legal advice".

In his judgment, Rimer said: "Is the solicitor supposed to review the whole range of commercial considerations that underlie a particular deal, work out which ones he is concerned the client may not have given sufficient thought to and remind him about them? In my opinion the answer is no."

The Football League was ordered to pay 90% of Hammonds' costs.

Maher said: "It's unlikely the Football League has legal expenses cover, as the cost of cover for PI claims is very high."

The Football League was unavailable for comment.