A solicitor who drafted thr agreement for a loan which was never repaid did not have personal responsibility for the lost funds, the High Court has ruled.

Stuart Ritchie KC, sitting as a deputy High Court judge in Gomes v AMG Financial Management Limited, struck out the claim against Marco Mandelli because he did not owe the lenders a personal duty of care.

Mandelli was engaged as a part-time consultant with AMG Financial Management and prepared a draft loan agreement for a total of £1.1m to a property developer. The developer defaulted. After steps to enforce a judgment weere unsuccessful, claimants Jacqueline Frances and Vasco De Oliveira Gomes turned instead to their financial adviser, AMG, and its solicitor.

But the court heard the claimants had no direct dealings with Mandelli and there was no personal retainer. The judge found that just because Mandelli had drafted the loan documents for the benefit of the claimants as lenders, that did not mean he owed a personal duty to them.

‘I do not accept the claimants’ argument that (in a triangular relationship such as the present) the mere undertaking of a task for an end client can point (even arguably) to the assumption of personal responsibility by the doer of the task to the person for whose ultimate benefit it is carried out, if that is unaccompanied by any specific dealing between them which “crosses the line”,’ the judge said.

Mandelli accepted he had been engaged by AMG but said the claimants’ dealings were with the company and not him. He rejected that any personal responsibility was owed and argued that if the court did find he owed a duty to the claimants, this would cast liability on a ‘vast array’ of those doing administrative work in professional services.

The claimants pointed to a £3,000 payment made by them to Mandelli as evidence of him ‘crossing the line’ to owing them a specific duty. But the judge found this payment was made on the request of AMG and was intended only to cut out a link in the payment chain. The argument that this payment was a sign of a duty to the claimants ‘was founded on the mistaken premise that, because Mr Mandelli was carrying out work for the benefit of the claimants, he undertook to act for them personally’.

Mandelli applied for summary judgment, telling the court he had suffered prejudice reputationally from the continuing existence of the claims. His requirement to disclose this claim had a ‘chilling effect’ on his ability to secure new work, he told the court.

The judge ordered that the claim against Mandelli be dismissed and said there would be a separate judgment on costs. Claims against AMG are being treated separately and have previously been stayed.