Solicitor, Emma Semwayo, comments on a recent case where a property fraud saw a London firm of solicitors being found guilty of a breach of trust costing them hundreds of thousands of pounds.
Solicitors Liable for Fraud Perpetrated by a Client
A case earlier this year (2016) at the High Court has found that a firm of conveyancing solicitors is liable to a third party for a large property fraud perpetuated by a client. In fact, the conveyancers on both sides of the transaction were found liable when a purchaser of a property paid over money to a fraudster who had no right to sell the property.
A Mr Dawson claimed to be the owner of the property in Wimbledon. He produced proof of identity to the solicitors but did not provide proof of actual ownership. His solicitors made no checks regarding this and the purchaser’s solicitors did not properly chase up an enquiry regarding this issue. Subsequently the claimant lost all his life savings of up to a half of a million pounds.
A breach of trust claim against the seller’s solicitors, A’Court & Co, and breach of trust and negligence against his own licensed conveyancer, House Owners Conveyancers Limited was successfully made by the claimant. The solicitors claimed to be ‘innocent bystanders’ to the fraud but were found to be jointly liable for the claimant’s losses.
The failures in this case were fundamental on both sides: The seller’s solicitor failed to verify the identity of their client and whether they had the right to sell the property, basic checks that should be made in any transaction of this kind. Although the purchaser’s solicitor asked the question regarding the vendor’s right to sell, they failed to ensure that the response given was adequate. The results for the claimant in this action were catastrophic, the purchaser handed over hundreds of thousands of pounds to a fraudster.
This landmark case sends an important message to the profession that their duties can extend beyond the narrow client solicitor relationship and that these duties cannot be escaped on technicalities. In my experience the public still holds substantial trust in the Solicitors profession and this need to be protected. We are frequently consulted by clients who are shocked to find that their interests have not been protected by their legal representatives in whom they have placed their trust and have suffered significant losses as a result.
At Applebys we have years of experience in addressing property and conveyancing negligence and are best placed to advise and represent. We can usually act on a no win no fee. For a free consultation please call Emma Semwayo on 0800 169 1325 or e-mail claims@applebys-law.co.uk.