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 discharge of the property without repayment of the loan. The appellant denied having a duty of care to the bank, and appealed against a finding that she did.
Held: The appeal succeeded. The concept in negligence of assumption of responsibility remains the foundation of liability for a careless misrepresentation, though the concept may sometimes require cautious incremental development if it is to fit cases to which it does not readily apply. The appellant expected properly, that the bank would make its own checks of what she said before releasing the forms of discharge.
A solicitor will not normally assume responsibility towards the opposite party unless it was reasonable for the latter to have relied on what the solicitor said, and unless the solicitor should reasonably have foreseen that the opposite party would actually rely on the statement. The two ingredients of reasonable reliance and foreseeability have particular relevance in a claim against a solicitor by the opposing party, because it is generally inappropriate for a solicitor to assume such a responsibility towards the other side.
Orse: NRAM Ltd (formerly NRAM plc) v Steel
Lady Hale, President, Lord Wilson,Lord Reed, Lord Hodge, Lady Black
[2018] UKSC 13, [2018] 3 All ER 81, [2018] 1 WLR 1190, 2019 SCLR 379, [2018] WLR(D) 124, 2018 GWD 24-311, [2018] PNLR 21, 2018 SLT 835, UKSC 2016/0111
Bailii, Bailii Summary, SC, SC Summary, SC Summary Video, SC 2017 Nov 07 am Video, SC 2017 Nov 07 pm Video
CitedHedley Byrne and Co Ltd v Heller and Partners Ltd HL 28-May-1963
Banker’s Liability for Negligent Reference
The appellants were advertising agents. They were liable themselves for advertising space taken for a client, and had sought a financial reference from the defendant bankers to the client. The reference was negligent, but the bankers denied any . .
CitedSmith v Eric S Bush, a firm etc HL 20-Apr-1989
In Smith, the lender instructed a valuer who knew that the buyer and mortgagee were likely to rely on his valuation alone. The valuer said his terms excluded responsibility. The mortgagor had paid an inspection fee to the building society and . .
CitedCaparo Industries Plc v Dickman and others HL 8-Feb-1990
Limitation of Loss from Negligent Mis-statement
The plaintiffs sought damages from accountants for negligence. They had acquired shares in a target company and, relying upon the published and audited accounts which overstated the company’s earnings, they purchased further shares.
Held: The . .
CitedRobinson v Chief Constable of West Yorkshire Police SC 8-Feb-2018
Limits to Police Exemption from Liability
The claimant, an elderly lady was bowled over and injured when police were chasing a suspect through the streets. As they arrested him they fell over on top of her. She appealed against refusal of her claim in negligence.
Held: Her appeal . .
At Inner HouseNRAM Plc v Jane Steel and Bell and Another SCS 19-Feb-2016
(Extra Division, Inner House) The bank had relied upon mistaken statements by the solicitor acting for a client as to the intention to repay its debts. Without checking, the bank issued the documents to release their security. It now appealed from . .
CitedMichael and Others v The Chief Constable of South Wales Police and Another SC 28-Jan-2015
The claimants asserted negligence in the defendant in failing to provide an adequate response to an emergency call, leading, they said to the death of their daughter at the hands of her violent partner. They claimed also under the 1998 Act. The . .
CitedHM 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. . .
CitedJames McNaughton Paper Group Ltd v Hicks Anderson and Co CA 31-Jul-1990
When considering the liability of an auditor in negligence, the fact and nature of any communications direct between the auditor and the potential investor must be allowed for. The court set out a non-exhaustive list of factors to be taken into . .
CitedRoss v Caunters (a firm) ChD 1979
The court upheld a finding of negligence against a firm of solicitors for failing to ensure the correct attestation of a will, and also the award of damages in favour of a disappointed beneficiary.
A solicitor owes a duty of care to the party . .
CitedSpring v Guardian Assurance Plc and Others HL 7-Jul-1994
The plaintiff, who worked in financial services, complained of the terms of the reference given by his former employer. Having spoken of his behaviour towards members of the team, it went on: ‘his former superior has further stated he is a man of . .
CitedAllied Finance and Investments Ltd v Haddow and Co 1983
(New Zealand Court of Appeal) The claimant had agreed to make a loan to X and to take security for it on a yacht. The defendants, who were X’s solicitors, certified to the claimant that the instrument of security executed by X in relation to the . .
CitedMidland Bank Plc v Cameron, Thom, Peterkin and Duncans SCS 1988
(Outer House) The pursuer had made a loan to X in assumed reliance on a statement by the defenders, who were X’s solicitors, about the extent of his assets. The statement was materially inaccurate. But the pursuer’s claim against the defenders . .
CitedAl-Kandari v J R Brown and Co CA 1988
A solicitor had undertaken to look after certain passports, but failed to do so. The husband had twice previously kidnapped his children whose custody was an issue before the court. Once the husband regained the passports, he again fled with the . .
CitedTrent Strategic Health Authority v Jain and Another HL 21-Jan-2009
The claimants’ nursing home business had been effectively destroyed by the actions of the Authority which had applied to revoke their licence without them being given notice and opportunity to reply. They succeeded on appeal, but the business was by . .
CitedDean v Allin and Watts (a Firm) CA 23-May-2001
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 . .
CitedHenderson v Merrett Syndicates Ltd HL 25-Jul-1994
Lloyds Agents Owe Care Duty to Member; no Contract
Managing agents conducted the financial affairs of the Lloyds Names belonging to the syndicates under their charge. It was alleged that they managed these affairs with a lack of due careleading to enormous losses.
Held: The assumption of . .
CitedConnell v Odlum 1993
(New Zealand Court of Appeal) Prior to his marriage to W, the claimant wished to enter with her into an agreement of which the statutory effect would be to contract them out of the law’s general provisions for the making of financial adjustments . .
CitedGran Gelato Ltd v Richcliff (Group) Ltd ChD 1992
The claimant wished to purchase an underlease from the first defendant. The claimant’s solicitors inquired of the second defendants, a firm of solicitors acting for the first defendant, whether any provisions in the headlease might affect the length . .

Cited by:
CitedJames-Bowen and Others v Commissioner of Police of The Metropolis SC 25-Jul-2018
The Court was asked whether the Commissioner of Police of the Metropolis (‘the Commissioner’) owes a duty to her officers, in the conduct of proceedings against her based on their alleged misconduct, to take reasonable care to protect them from . .
CitedBanca Nazionale Del Lavoro Spa v Playboy Club London Ltd and Others SC 26-Jul-2018
The Playboy casino required a reference for a customer, but asked for this through a third party. The bank was not aware of the agency but gave a good reference for a customer who had never deposited any money with them and nor to whom it had issued . .

Lists of cited by and citing cases may be incomplete.
Updated: 11 August 2021; Ref: scu.605621