When we receive services from a professional, it is reasonable to expect they fulfil their duty of care and provide what has been promised.
Unfortunately, even the most experienced or educated professionals make mistakes and this can sometimes be at the client’s expense.
When this occurs, it is referred to as professional negligence and there are laws in place to protect the community against such behaviour. To further demonstrate professional negligence, we delve into a recent case example where a Solicitor falls below their expected duty of care.
Specters acted on behalf of a Lender. The Borrower Solicitor breached a written undertaking that meant the Lender’s Legal Charge was never registered against the Borrower’s Property and worst still the Solicitor failed to remove an existing Charge. What that meant was there was no equity left for the Lender to recover the loan.
Our Client loaned a substantial sum to a company and part of that loan was to discharge existing charges secured against a Property that belonged to the Borrower.
Our Client instructed a Solicitor to act during the loan transaction. The Borrower’s Solicitor made a number of written undertakings to our Client.
It was agreed that the Borrower’s Solicitor would send the relevant documentation and Notice of Charge created by the Agreement to the First Charge Holders and to supply our Client’s Solicitor with a copy of the Notice of Completion and to register the Charge and restriction in favour of our Client.
In a separate correspondence the Borrower Solicitor also agreed that they would undertake that upon completion of the loan they would redeem the Charges and restriction.
Based on the agreed undertakings our Client proceeded with the loan. The Borrower then defaulted on the loan repayments and our Client began possession proceedings.
Our client was awarded Judgment against the Borrower however unknown to our Client our Client they subsequently discovered that previous Legal Charge had already been registered against the Property.
Our Client therefore suffered a loss being what they would have recovered had they been the First Charge holder. This is limited to the sale price of the Property less receiver and the usual sale price costs.
Specters successfully recovered compensation which in fact covered the initial loan plus interest.
Are you considering a professional negligence claim? Visit our professional negligence page for more information on how we can assist, or submit an enquiry form here to allow one of our expert team members to get in touch.