Law Society fails to block Find a Solicitor negligence action

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23 December 2014


housing

Mitting J: important question for conveyancing security

The Law Society has failed in a bid to block a High Court action against it for negligent misrepresentation, after a bogus solicitor got himself listed on the society’s Find a Solicitor website and stole money from a house purchaser.

According to a ruling reported on Lawtel yesterday, Mr Justice Mitting rejected a Law Society application for summary judgment and/or to strike out the claim, saying the case raised a question of importance regarding the security of conveyancing.

It was, the report said, “eminently suitable” for trial.

Ruling in Schubert Murphy v The Law Society, the judge said the Solicitors Compensation Fund would only cover losses where undertakings were made by solicitors.

Mitting J said the Law Society encouraged the public to rely on its information as to who was a solicitor, and if members of the public relied on an “imposter”, trusting him with money and losing it, they would be shocked to find they had no remedy.

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Schubert Murphy closed in 2012 and the current proceedings were brought by its indemnity insurers, XL Services UK.

According to the Lawtel report, the bogus solicitor had procured his place on Find a Solicitor fraudulently.

Schubert Murphy acted for the purchaser of a property, and the bogus solicitor and his alleged firm purported to act for the seller. The Law Society admitted that Schubert Murphy had searched Find a Solicitor and relied upon the fact that the bogus solicitor was on the roll.

A Law Society practice note of 15 April 2009 warned against fraudsters and advised that, where a solicitor was unknown, solicitors should check the recognised directory and gave the Find a Solicitor hyperlink.

The bogus firm gave an undertaking to discharge the mortgage on the house, but simply stole the purchase money.

The buyers brought proceedings for negligence and breach of trust against Schubert Murphy, which the firm settled. The Law Society argued that it had not acted negligently and owed no duty of case to the law firm or the buyer.

Mitting J held that the circumstances of the case raised a question of wide importance and called into question, in theory, undertakings by solicitors to discharge mortgages.

In a separate development, the Solicitors Regulation Authority has confirmed that it is going ahead with plans to make its database of solicitors available to comparison and other websites.

To access the information, they must have signed up to the Legal Services Consumer Panel’s self-assessment standard for websites and made a formal data-sharing agreement with the SRA.

A spokesman for the SRA said the data would include the solicitor’s SRA number, office name and type, address, phone number, email and website. It would also include the firm’s current licence (such as ‘recognised body’), business type (such as ‘law practice’) and constitution type (such as ‘LLP’), but no other information.

Paul Philip, chief executive of the SRA, added: “The public rightly expect to be able to find the information they need easily and many people routinely use comparison websites.

“Providing core data for use by others is a starting point and we are now looking at what more we can do to make information about the firms we regulate as accessible as possible.”

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