Solicitors’ sigh of relief (from negligence)

A recent High Court decision has confirmed that relief is potentially available for professional mistakes that amount to a minor departure from the ordinary and proper standards expected of the profession. The decision reinforces the fact that the onus is on the claimant to show a connection between the professional’s breach and the loss suffered by the claimant.

In Santander UK Plc v R A Legal Solicitors (a firm), the lender commenced proceedings for breach of trust against the firm of solicitors (S1) instructed to act on its behalf (and on behalf of the borrower/purchaser) in respect of a mortgage. S1 had been the victim of a fraud instigated by a second firm of solicitors (S2) that was purportedly acting on behalf of the seller. In fact, the owner of the property in question had not instructed S2 on the sale and had in fact never agreed to a sale of the property.

Oblivious to the live fraud, S1 transferred over to S2, prior to exchange of contracts, the mortgage advance with the intention to effect completion of the sale. Completion, however, was never realised and sums paid over to S2 were dissipated. The lender attempted to recover its losses from S1…

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