The Law Society Gazette has reported that solicitors representing fraudulent property vendors should share responsibility along with those representing the duped buyers for any resulting losses, the Court of Appeal has ruled in a widely awaited decision.
Lord Justice Patten partially upheld an appeal in Dreamvar v Mishcon de Reya from solicitors of buyers who had transferred thousands of pounds to fraudsters posing as property owners. The court ordered both firms involved, Mishcons and national firm Mary Monson Solicitors, to make financial contributions.
In the same appeal, following P&P Property Limited v Owen White & Carlin LLP , vendors’ solicitors were also held liable for their fraudulent client and ordered to repay the money buyers had paid.
The cases, first brought to light by the Law Society Gazette last year, set an important precedent on liability for recompensing parties duped into buying properties that are not owned by the people claiming to be sellers.
The Law Society will be considering the Court of Appeal ruling in detail. The ruling provides valuable guidance on the Law Society’s Code for Completion by Post, which was a central feature of the case. That will be reflected in the work to update the Code for Completion and associated documents, which is currently underway.