Addleshaw Goddard

UK 200 2014 position: 22

Court of Appeal gets tough on solicitors acting for lenders — 28 February 2014

It is common in mortgage fraud for lenders to lose advances where their solicitors are innocently duped by fraudsters. It is often the solicitors’ mandatory professional indemnity insurance that provides the most likely source of recovery for lenders.

The solicitors may not have been negligent, but the Court of Appeal has said this week (Santander UK PLC v RA Legal Solicitors) that even where solicitors’ unreasonable conduct does not directly cause the loss, they may not be relieved from liability as trustees of the lender’s advance.

In two decisions in 2012, the Court of Appeal had held that where funds are released without the lender’s solicitors obtaining a completed legal charge, and solicitors hold money on trust pending completion of the purchase, they will necessarily commit a breach of trust if they part with the advance otherwise than on completion (Davisons Solicitors v Nationwide BS; Lloyds TSB Bank Plc v Markandan & Uddin). However, the court has a discretion, under section 61 of the Trustee Act 1961, to relieve solicitors of liability for automatic breach of trust in relation to mortgage advances handed over in the course of a fraudulent transaction…

Click on the link below to read the rest of the Addleshaw Goddard briefing.

Sign in or Register to continue reading this article

Sign in

Register

It's quick, easy and free!

It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.

Register now

Why register to The Lawyer

 

Industry insight

In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.

 

Market intelligence

Identify the major players and business opportunities within a particular region through our series of free, special reports.

 

Email newsletters

Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.

More relevant to you

To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.

Briefings from Addleshaw Goddard

View more briefings from Addleshaw Goddard

Analysis from The Lawyer

View more analysis from The Lawyer

Overview

Milton Gate
60 Chiswell Street
London
EC1Y 4AG
UK
http://www.addleshawgoddard.com

Turnover (£m): 171.35
No. of lawyers: 598

Jobs