Court of Appeal holds law firm accountable for lender’s loss
The Court of Appeal has handed down its decision in Santander UK plc v RA Legal Solicitors. The decision will be much welcomed by lenders, following a string of breach-of-trust claims by lenders in which the courts have granted the completing conveyancer’s relief under section 61 of the Trustee Act 1925.
Section 61 of the Trustee Act 1925 absolves a trustee from personal liability for breach of trust if he has acted ‘honestly and reasonably’ and ‘ought fairly to be excused’ for breach of trust.
RA Legal was instructed to act for both the borrower and Santander (UK) in relation to the purchase of a London property. The vendor’s solicitor, Sovereign Chambers, did not pay any money to the vendor or discharge the mortgage registered against the property. Santander therefore received no charge over the property and the borrower was not registered as proprietor. Santander brought a claim for breach of trust against RA. Although RA had acted honestly throughout, the court at first instance held that RA had acted in breach of trust in releasing the funds without having obtained a legal charge over the property. However, the judge used his discretion under section 61 to relieve RA from liability for the breach of trust because he did not consider that RA’s conduct was sufficiently connected with Santander’s loss. While RA had departed from best practice, nothing it could have done would have prevented the fraud…
Click on the link below to read the rest of the Walker Morris briefing.
Sign in or Register to continue reading this article
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
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
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.
News from Walker Morris
News from The Lawyer
Briefings from Walker Morris
Pyranha Mouldings Ltd has become the 10th company to be convicted in the UK under the Corporate Manslaughter and Corporate Homicide Act 2007.
Employers are currently focused on having the correct policies and forms in place for shared parental leave but they should not overlook the fact that there are a number of additional changes to adoption and parental leave due to come into force from 5 April 2015.
Analysis from The Lawyer
Which firms are cutting it in this era of slimline rosters, and who are the GC new brooms making clean sweeps? The Lawyer can reveal all
The law school war shows no signs of ending. But we have, perhaps, reached the end of the beginning.