On the hook for another’s fraud — Santander (UK) plc v RA Legal Solicitors

By Hugh Evans and Sharon Duncan

In Santander (UK) plc v RA Legal Solicitors [2014] EWCA Civ 183, a firm of solicitors found themselves on the hook for a fraud in which they were not involved, but in which their substandard conduct had played a part. The law has always imposed a high standard on trustees but section 61 of the Trustee Act 1925 has provided for breaches to be excused where the trustee acted honestly and ought fairly and reasonably to be excused. In this recent mortgage fraud case, the Court of Appeal decided that the ‘shoddy performance’ by the firm meant that it could not claim the benefit of the section.

In May 2009, RA Legal was instructed by the purchaser and Santander in connection with the purchase of a residential property. The purchase price was £200,000 for which Santander was lending £150,000. Sovereign Chambers was apparently instructed by the vendor. Although a firm of solicitors in apparently good standing with the Law Society, Sovereign were in fact fraudsters. The funds disappeared from Sovereign’s client account and were not used to purchase the property. The funds were never recovered.

The standard terms upon which Santander instructed RA Legal required the firm to hold Santander’s £150,000 on trust until completion. As RA Legal released Santander’s advance to Sovereign without ‘completion’ (as defined by the Court of Appeal in Lloyds TSB PLC v Markandan & Uddin [2012] EWCA Civ 65) ever taking place, Santander sued RA Legal for breach of that trust…

Click on the link below to read the rest of the DLA Piper 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 DLA Piper

View more briefings from DLA Piper

Analysis from The Lawyer

View more analysis from The Lawyer

Overview

3 Noble Street
London
EC2V 7EE
UK
http://www.dlapiper.com

Turnover (£m): 1,566.29
No. of lawyers: 3,961 (UK 200)
Jurisdiction: global
No. of offices: more than 75
No. of qualified lawyers: 625 (International 50)

Jobs