Lawyers

Solicitor - negligence - duty of care - liability to ensure effective security to protect third party's loans to solicitors' clientDean v Allin & Watts (a firm): CA (Lords Justice Robert Walker and Sedley and Mr Justice Lightman): 23 May 2001The claimant agreed to lend money to borrowers, taking as security a charge over a property.

The borrowers instructed the defendants, their solicitors, to take steps to effect the security.The defendants in so doing knew the claimant had no independent adviser and relied on them to carry out the transaction.

The defendants obtained the necessary title deeds but failed to comply with the requirement for a memorandum in writing by the property owner.The borrowers defaulted and the property owner obtained return of his deeds without making any payments to the claimant.

The judge dismissed the claimant's action in negligence holding that the defendants owed him no duty of care.

The claimant appealed.Bernard Weatherill QC (instructed by Coles Miller, Poole) for the claimant; Alastair Norris QC (instructed by Bond Pearce, Exeter) for the defendants.Held, allowing the appeal, that the ambit of a solicitor's duty of care to third parties was considered by the House of Lords in White v Jones [1995] 2 AC 207 where a solicitor was held to owe a duty to a disappointed beneficiary for negligence in drawing up his client's will; that a similar approach should be adopted in analogous cases if it was fair, just and reasonable for the law to impose such a duty; and that as the defendants' failure to effect the security resulted in foreseeable damage to the claimant, the defendants knowing that the borrowers had wished to confer on him the benefit of the security, they owed him a duty of care and were thus liable for the loss to him resulting from their negligence.