A solicitor acting for both a lender and a borrower was under a duty to disclose relevant information to the lender client. An incident of their duty to exercise reasonable care and skill, solicitors are obliged to advise their lender client in relation to facts discovered by them in the course of investigating title which a reasonably competent solicitor would realise might have a material bearing on the valuation of the lender’s security or some other ingredient of the lending decision.
Millett LJ said: ‘A solicitor who acts for both a purchaser and a mortgage lender faces a potential conflict of duty. A solicitor who acts for more than one party to a transaction owes a duty of confidentiality to each client, but the existence of this duty does not affect his duty to act in the best interests of the other client.’
Bingham LJ: ‘A client cannot expect a solicitor to undertake work he has not asked him to do, and will not wish to pay him for such work. But if in the course of doing the work he is instructed to do the solicitor comes into possession of information which is not confidential and which is clearly of potential significance to the client, I think that the client would reasonably expect the solicitor to pass it on and feel understandably aggrieved if he did not.’
Millett LJ, Bingham MR L
Times 01-Aug-1995,  2 All ER 836,  1 PNLR 62
England and Wales
Appeal from – Mortgage Express Ltd v Bowerman and Partners (A Firm) ChD 19-May-1994
A solicitor who had been put on enquiry as to a valuation of a property must report his doubts to his mortgagee client also. . .
Cited – Hilton v Barker Booth & Eastwood (a Firm) CA 22-May-2002
The firm of solicitors acted for both parties in a conveyancing transaction, in a situation when they were permitted to do so. The firm had previously acted for one party in a case where he had been convicted of a crime. The other party said the . .
Cited – Hilton v Barker Booth and Eastwood HL 3-Feb-2005
The claimant had instructed the defendant solicitors to act for him, where he was to contract with another client of the same solicitor in a land development. The solicitor failed to disclose that the other client had convictions for dishonesty, and . .
Cited – Nationwide Building Society v Balmore Radmore ChD 1999
Although the Bowerman duty is a species of obligation which the court will ordinarily imply where a solicitor acts for a lender, it will not imply such an obligation when to do so is inconsistent with the express terms of the retainer or with the . .
Cited – E.Surv Ltd v Goldsmith Williams Solicitors ChD 10-Apr-2014
The claimants had been found liable for mis-valuation of a property. They now sought a contribution from the solicitors acting uunder the mortgage saying that had they acted properly, they would have alerted the lender, and in turn the claimant of . .
Cited – Pepper (UK) Ltd (T/A Engage Credit) v Fox (P/A Barry Fox, Solicitors) ChNI 14-Jan-2016
Application by Pepper (UK) Ltd t/a Engage Credit against Emma Jane Fox practising as Barry Fox, Solicitors for the delivery up of all papers, documents and title deeds in the possession and custody of the Solicitors and belonging to the plaintiff . .
Lists of cited by and citing cases may be incomplete.
Legal Professions, Professional Negligence
Updated: 02 November 2021; Ref: scu.83873