The defendant firm of solicitors was retained by a subcontractor of Mowlem in connection with an arbitration commenced by the subcontractor against Mowlem. The subcontractor sought to recover £150,000, which they claimed was owing to them. Mowlem brought a counterclaim for a much larger sum, and the arbitrator ultimately awarded Mowlem damages and costs of over £1m.

The subcontractor's professional indemnity insurance had expired after they became aware of the potential counterclaim against them, and when they applied to renew it, they had stated that they were not aware of circumstances which might give rise to a claim. As a result, the insurers were able to avoid liability on the grounds that the policy had been obtained as a result of non-disclosure/misrepresentation.

The subcontractor then went into liquidation and Mowlem were unable to obtain payment of the arbitrator's award. Mowlem took over the subcontractor's claim in professional negligence against the defendant for failing to advise it to notify its insurers of Mowlem's counterclaim at the right moment. In the proceedings that followed, the judge in the Technology and Construction Court found in favour of the defendant. Mowlem appealed to the Court of Appeal.

Mowlem argued that the defendant owed the subcontractor a duty to advise it to notify the counterclaim to its insurers, and that had they done so, the subcontractor would have notified the counterclaim to them and would have had insurance in place to meet it.