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The editor of this section of the site is Nigel Clayton of Kings Chambers, Leeds and Manchester. Nigel also maintains the specialist website dealing with mortgages at www.legalmortgage.co.uk

There are two cases this month.
  • In the first, solicitors acting for a fictitious borrower were held liable.
  • In the second, when a bank made a mistake in discharging a security, it was reregistered.

Execution of mortgage

Solicitor’s undertaking

LSC Finance Limited v Abensons Solicitors
[2015] EWHC 1163 (Ch)


Solicitors acting for a fictitious borrower were held liable on their undertaking to a lender to obtain a validly executed legal charge.


LSC (acting by their own solicitors) advanced £169,000 by way of short-term bridging loan to the borrower (Mrs B – who turned out to be an imposter). Mrs B was a purported client of A (a firm of solicitors). The money was intended as security of a legal mortgage over a buy-to-let property. A released the advance money but the security was not effected as a result of a mortgage fraud, as the Court said, “perpetrated, most probably, by Mr B”. LSC sued A for damages for breach of undertaking, breach of warranty of authority, and breach of duty of care in tort.


The Court found for LSC. Following a thorough review of the evidence and the case law the court concluded that everything turned on the precise terms and effect of the undertaking given by A to LSC through their solicitors. In consideration of LSC completing the loan, A had given an undertaking, which provided, inter alia, that they confirmed execution of the charge and within 7 working days of completion would complete the registration of the charge in favour of LSC over the property.

When read in conjunction with an earlier document headed “Property Security Requirements” which required A to hold a validly executed security prior to completion, this required A to confirm execution of an original, validly executed security in the form of a first legal charge by Mrs B in favour of LSC over the property. It was ... THIS IS AN EXTRACT OF THE FULL TEXT. TO GET THE FULL TEXT, SEE BELOW

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