Nicholas Paul Shane McHale v Andrew John Dunlop & Anor

Nicholas Paul Shane McHale v Andrew John Dunlop & Anor

Mr Dunlop did not owe a duty of care to Mr McHale as a financial adviser regarding the Dolphin Trust investment, as McHale had already decided to invest based on advice from Lockington and did not reasonably rely on Dunlop for independent advice. However, Dunlop owed a fiduciary duty to McHale regarding commission disclosure, breached that duty by deliberately misleading McHale about the true amount of commission, and must account for the commission received.

Parties
Claimant: Nicholas Paul Shane McHale; First Defendant: Andrew John Dunlop; Second Defendant: Chetwode Limited (in liquidation)
Jurisdiction
England and Wales
Judgment Date
22 November 2024
Procedural Posture
Civil / Final Judgment
Outcome
Claim for professional negligence dismissed; claim for breach of fiduciary duty regarding commission succeeds.
Legal Topics
Duty of Care, Assumption of Responsibility, Secret and Half Secret Commissions, Disclosure and Consent, Breach of Fiduciary Duty
Professional Negligence Fiduciary Law Financial Services Duty of Care Assumption of Responsibility Secret and Half Secret Commissions Disclosure and Consent Breach of Fiduciary Duty

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Parties

Nicholas Paul Shane McHale

Claimant

Andrew John Dunlop

First Defendant

Chetwode Limited (in liquidation)

Second Defendant

Procedural Posture

Civil / Final Judgment

Legal Issues

  1. 1 Did Mr Dunlop owe Mr McHale a duty of care at common law to prevent economic loss?
  2. 2 Did Mr Dunlop breach any such duty of care by recommending Dolphin Trust due to commission incentives?
  3. 3 Did Mr Dunlop owe Mr McHale a fiduciary duty regarding commission disclosure?

Ratio Decidendi

Mr Dunlop did not owe a duty of care to Mr McHale as a financial adviser regarding the Dolphin Trust investment, as McHale had already decided to invest based on advice from Lockington and did not reasonably rely on Dunlop for independent advice. However, Dunlop owed a fiduciary duty to McHale regarding commission disclosure, breached that duty by deliberately misleading McHale about the true amount of commission, and must account for the commission received.

Court Disposition

Claim for professional negligence dismissed; claim for breach of fiduciary duty regarding commission succeeds.

Orders

  • Claimant's claim for damages in respect of negligent financial advice dismissed.
  • Claimant awarded an account of commission paid to Mr Dunlop in respect of Dolphin Trust investments, with interest.