An unsophisticated lender running the business of a car mechanic wanted to lend money to borrowers on the security of real property owned by an associate of the borrowers. The borrowers instructed the defendant solicitors to give effect to this transaction. He was aware that the lender was not represented. The deeds were later purported to be charged by way of deposit only, which was ineffective at law.
Held: Though a solicitor is not normally liable to third parties who were not his clients, he could acquire such duties. Here, it was fair just and reasonable to impose such a duty. He should have known that the third party was relying upon him to set an effective security in place, and was liable in negligence when he failed to do so.
Lord Justice Robert Walker, Lord Justice Sedley, Mr Justice Lightman
Times 28-Jun-2001,  2 Lloyds Rep 249,  EWCA Civ 758,  2 Lloyd’s Report 249,  PNLR 39,  All ER (D) 288
England and Wales
Cited – Clarke v Bruce Lance and Co CA 1988
The defendant solicitors drafted a will, which the testator executed in 1973. The testator later granted a lease of a service station which had been disposed of in the will, and then granted an option for its purchase at a fixed price, which the . .
Cited – Commissioners of Customs and Excise v Barclays Bank Plc ComC 3-Feb-2004
The claimant had obtained orders against two companies who banked with the respondent. Asset freezing orders were served on the bank, but within a short time the customer used the bank’s Faxpay national service to transfer substantial sums outside . .
Cited – Customs and Excise v Barclays Bank Plc CA 22-Nov-2004
The claimant had obtained judgment against customers of the defendant, and then freezing orders for the accounts. The defendants inadvertently or negligently allowed sums to be transferred from the accounts. The claimants sought repayment by the . .
Cited – HM Customs and Excise v Barclays Bank Plc HL 21-Jun-2006
The claimant had served an asset freezing order on the bank in respect of one of its customers. The bank paid out on a cheque inadvertently as to the order. The Commissioners claimed against the bank in negligence. The bank denied any duty of care. . .
Cited – Steel and Another v NRAM Ltd (Formerly NRAM Plc) SC 28-Feb-2018
The appellant solicitor acted in a land transaction. The land was mortgaged to the respondent bank. She wrote to the bank stating her client’s intention to repay the whole loan. The letter was negligently mistaken and the bankers allowed the . .
Lists of cited by and citing cases may be incomplete.
Legal Professions, Professional Negligence
Updated: 12 January 2022; Ref: scu.160049