Millions of pounds have saved from the Solicitor's Indemnity Fund's reserves following a House of Lords ruling.
Since National Home Loans (NHL) was refused leave to appeal its case against solicitors Giffen Couch & Archer in December, hundreds of similar claims have been settled in favour of the solicitors.
NHL had argued that Giffens had a duty to advise it about existing mortgage arrears of borrowers who went on to default, despite the fact that this was not mentioned in NHL's standard instructions.
Although the arrears were small sometimes no more than a few hundred pounds NHL claimed for its entire loss. NHL won its case in the High Court but the decision was overturned by the Court of Appeal.
Nick Johnson of Wansbroughs Willey Hargrave, a firm on SIF's panel, said: “The effect of the ruling is that claims by other lenders who latched onto the same arguments are being discontinued. I wouldn't be surprised if the saving was millions of pounds.”
A SIF spokesman said it was too early to put a figure on the savings.